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101 Labour Contracts: Revocation and Termination

After a labour contract is concluded, both parties may revoke it if they reach an agreement on the matter through a joint consultation. Let’s look at the different scenarios in which a contract can be revoked or terminated.

1. The employee revokes the labour contract.

If a worker wants to revoke their labour contract, he or she must provide a written notification to the employer at least 30 days in advance or 3 days in advance if it’s during the probation period.

The employee has the right to have the labour contract revoked if the employer organisation:

  1. fails to provide occupational protection or working conditions as agreed in the labour contract.
  2. fails to pay the labour remuneration on time and in full.
  3. fails to pay the social insurance premiums for the worker in conformity with law.
  4. has rules and regulations that violate laws or regulations, thereby damaging the worker’s rights and interests.
  5. invalidates the labour contract.

2. The employer revokes the labour contract.

The employer may revoke the labour contract if the employee:

  1. is unqualified for the job during the probation period.
  2. violates the rules and regulations of the employer.
  3. causes huge losses to the employer due to gross dereliction of duty or malpractices for personal benefits.
  4. simultaneously establishes a labour relationship with another employer, which seriously impacts carrying out professional duties of the original employer.
  5. invalidates the labour contract.
  6. is being investigated for criminal responsibility in adherence to law.

In one of the following circumstances, an employer organisation may revoke the labour contract, if it notifies the employee in writing 30 days in advance or after paying him an extra one month salary:

  1. The employee cannot complete his original work or any other work assigned by the employer after medical treatment for illness or for injury incurred when not at work.
  2. The employee is incompetent for the job and remains incompetent after being trained or being assigned to another job.
  3. The original labour contract cannot be executed due to objective reasons and, after consultation between both parties, no consensus is reached on modifying the labour contract.

When the employer has to reduce staff due to economic reasons, such as undergoing reorganisation, encountering serious difficulty in production and management, or when the original labour contract cannot be executed due to objective economic reasons, the employer may revoke the labour contract.

3. Terminating a labour contract.

A labour contract may be terminated when:

  1. the term of the contract expires.
  2. the employee concerned begins to enjoy the benefits of the basic old-age insurance pension in accordance with law
  3. the employee concerned dies, or is declared dead or missing by the state
  4. the employer is declared bankrupt in accordance with law
  5. the business license of the employing unit is revoked, the employing unit is forced to close down or to dissolve, or it decides to dissolve on an earlier date.

When revoking a labour contract, the employing unit may have to compensate the worker concerned accordingly. To learn about the these compensation details and more, feel free to read INS Global’s comprehensive guide.

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DATE October 17, 2019
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