HR Management for Resumption of Work in Shanghai

After the entire city has been locked down for a month, the epidemic situation of Omicron Virus in Shanghai is in remission. The government advocates companies resume work. However, according to the current controlling policies of Shanghai, people will be released from the lock-down gradually depending on the epidemic situation in their residential communities. This means that during a certain period, even if a company resumes work, not every employee is able to come back to work yet. Also, according to the Guidelines on Epidemic Prevention and Control of Industrial Enterprises of Shanghai for Resumption of Work (2^nd version) (“Work Resumption Guidelines”), companies shall undertake epidemic prevention and control responsibilities and take relevant measures. Therefore, after resumption of work of the company, there are many challenges to HR management regarding the arrangement of employees coming back to work. 

Based on the HR polices for the epidemic issued both at the State level and in Shanghai in 2020, the Shanghai Human Resources and Social Security Bureau issued the Work Guide on Further Harmony and Stabilization of Current Labor Relationships (Hu Ren She Guan [2022] No. 89) and together with the Shanghai High People’s Court, the Answers to the Questions Regarding Handling Epidemic Related Labor Disputes on 26 and 28 April 2022 and took effect on the same day. The two regulations (hereinafter collectively referred to “New COVID Policies”) provide clearer guidelines on handling the employment relationship with employees during the epidemic period in Shanghai. 

1. Arrangement of employees coming back to work

According to the Work Resumption Guidelines, after getting permission from the competent epidemic prevention and control authority, companies may resume their production/operations. Legally speaking, after the resumption of work of the company, all the employees are obliged to come back to work. However, subject to different levels of quarantine and controlling measures, not all employees are able to come back to work immediately. Further, taking into consideration of the epidemic prevention and control responsibilities, companies may not want all the employees come back to work if the infection risks are high. Therefore, companies can decide on how to arrange the employees’ coming back to work as follows: (i) for the employees the company requires to come back to work, they must do so except if an employee can provide evidence such as a home-based health supervision certificate issued by the competent neighborhood committee to prove that he/she is not able to come back to work because he/she is under quarantine due to infection or is a close contact or subject to lock-down measures; (ii) for the employees for whom in the opinion of the company is not necessary to come back to office for work, the company can continue to arrange them to work from home; and (iii) for the employees who are neither able to come back to office due to lock-down measures nor able to work from home, the company can arrange them to take annual leave or other leave entitlement first and then arrange them to suspend work.

According to the New COVID Policies, if a company is not able to conclude or renew an employment contract in writing due to the epidemic, upon negotiation between the parties, the company may conclude or renew the employment contract with the employee in digital form or postpone the time of conclusion or renewal of contract. The company will not be required to pay double salary if it fails to duly conclude or renew a written contract according to law due to the epidemic. Further, if an employee refuses to follow the work arrangement of the company, unilaterally terminates the employment contract for the reason that the company fails to provide work conditions according to the contract, the company will not be required to pay statutory severance payments according to law as long as the company proves that it has made proper work arrangements and did not infringe the legal interests of the employee.     

The New COVID Policies also clarify that if an employee’s employment contract expires during the period when the employee is under quarantine or medical supervision period, or subject to lock-down measures, the expiry date of such contract shall be extended until when the quarantine or medical supervision period has been ended or the lock-down measures have been released.

2. Employees’ salary payment

According to the New COVID Policies, after the resumption of work, companies can pay salaries to the employees depending on their work status

The New COVID Policies do not provide the standard of living allowance. According to the current judicial practice in Shanghai, the living allowance can be RMB 2,072 per month, which is 80% of the minimum wage.  

According to the HR polices for the epidemic issued both at the State level and in Shanghai in 2020 as well as the New COVID Policies, during the epidemic period, if a company does not have sufficient orders or encounters economic difficulties, the company may consider to, upon consultation with the employees, reduce the salaries of employees by shorting working hours or arranging employees to work in turn. If a company has difficulties in paying salaries, upon the consent of the trade union or employees’ representatives based on consultation, the company can delay the salary payment, but normally for no more than one month. 

According to the New COVID Policies, the labor arbitration commission or court shall exercise prudence, if requiring a company, especially a small and micro size company, to pay statutory severance payments in case any employee unilaterally terminates the employment contract because the company temporarily underpaid the salaries or social insurance contributions caused by suspension of work or suffering from economic difficulties.  

3. Conducting collective consultation with employees

During the epidemic period, the Shanghai government encourages companies to consult with the employees about all HR related issues to reach a mutual understanding and that both parties can share responsibilities and overcome difficulties together. For this purpose, the New COVID Policies provide for simplified collective consultation procedures for companies. I.e., a company may make proposals on relevant rules and regulations or important matters that are directly related to the personal interests of employees, such as suspension of work, adjustment of remuneration, adjustment of working methods and working hours, shift and rest, etc., and consult with the trade union or employees’ representatives through email, internal OA system, WeChat group, etc. As long as the decision of the company is made based on equal consultation and has been announced to all employees, it shall be deemed as that the company has conducted the collective consultation procedures. As a result, such decision of the company is valid and legally binding on all employees.

Please note that by following such special collective consultation procedures, companies can make decisions on adjustment of remuneration, adjustment of working methods and working hours, shift and rest, and etc. during the epidemic period, which used to be not possible under the law in the past. Such special collective consultation procedures can also be adopted, if a company sets up relevant internal rules and regulations during the epidemic period, for example, regarding the compliance with the epidemic prevention and controlling measures as required by the government or by the company itself, which are necessary to ensure the healthy and safe working environment of the company.        

Conclusion

During the epidemic period, the Shanghai government makes efforts on making a balance between the interests of both the company and the employees. The New COVID Policies, to some extent, expand the companies’ autonomous right in making decisions on employment related issues. This will help companies to overcome difficulties in handling the employment relationship with the employees during the epidemic period.