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Labor Contract Law of China: Special Dispositions to Know

There are many special dispositions of the Labor Contract Law of China in regard to collective contracts, labor dispatch and part-time employment. To learn about these special dispositions will give you a deep understanding of the Labor Contract Law.

Collective Contracts

Through equal negotiation, the employees as one party and the employing unit as the another may make a collective contract on matters relating to labor remuneration, working hours, welfare benefits, etc. 

The trade union on behalf of the employees will conclude the collective contract with the employing unit.

Besides the general collective contract, there are special collective contracts with respect to occupational safety and health, protection of the rights and interests of female employees, wage adjustment mechanism, etc. and region-wide or industry-wide collective contracts related to construction, mining and catering service industries.

The rates for labor remuneration and the standards for working conditions, etc. specified in a collective contract shall not be lower than the minimum rates and standards stipulated by the local People’s government. The rates for labor remuneration and standards for working conditions, etc. specified in the labor contract between an employing unit and a worker shall not be lower than those stipulated in the collective contract.

2. Labor Dispatch

A labor-dispatching unit shall be established in adherence to the relevant provisions in the Companies Law, and its registered capital shall be not less than RMB 500,000 yuan.

No employing unit may establish labor-dispatching units to dispatch workers to its own unit or to its subordinate units.

A labor contract on dispatch shall be for a fixed period of at least 2 years and the labor remuneration shall be paid on a monthly basis by the labor-dispatching unit. 

The labor-dispatching unit shall not dock the labor remuneration paid to the workers by the unit that receives the dispatched workers (receiving unit).

The receiving unit shall perform the obligations such as providing the necessary working conditions and occupational protection, overtime pay and performance bonuses, and necessary training. And it may not re-dispatch the workers to another employing unit.

Dispatched workers shall enjoy the right of equal pay for equal work as the workers of the receiving unit do.

Part-Time Employment

Part-time employment means that the worker’s remuneration is mainly calculated by the hour and the worker works for less than 4 hours per day in average and not more than 24 hours in total per week for the same employing unit.

The worker and the employing unit may conclude an oral part-time employment agreement. The worker may conclude a labor contract with more than one employing units, but the labor contract concluded later may not impact the performance of the one concluded earlier.

Either party may notify the other party at any time to terminate the employment, while in such a case no financial compensation shall be paid by the employing unit.

The hourly remuneration rate for part-time employment shall not be lower than the minimum hourly wage rate specified by the local People’s government, and the labor remuneration settlement and payment cycle for part-time employment may not be over 15 days.

There are more complex details about these special dispositions and it’s very easy for a foreign company in China to violate the Chinese Labor Contract Law if it doesn’t pay attention to them. INS provides a comprehensive guide to interpret the details and help you understand the special dispositions thoroughly.

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DATE November 7, 2019
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