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Jiangsu Will Have New Labor Contract Rules as of 1 May 2013


On 15 January 2013, the Jiangsu Provisional People’s Congress issued new Labor Contract Rules of Jiangsu Province (“New Rules”). The New Rules will become effective on 1 May 2013. They replace the old ones which were issued ten years ago. These are the first labor contract rules issued by a local government after the PRC Labor Contract Law became effective on 1 January 2008. They indicate to some extent, the direction of the development of the PRC labor law. As a result of these changes, the application of the PRC Labor Contract Law in Jiangsu Province will be modified to a certain extent. Enterprises located in Jiangsu Province shall pay attention to the following changes:

  1. The PRC Labor Contract Law requires the employer to inform the employee about the occupational hazards which the employee might encounter at his work position before the conclusion of the employment contract. In addition to the above, the New Rules now require the employer to notify the employee about relevant protection measures or benefits and stipulate them in the employment contract.

  2. It is no longer mandatory in the Jiangsu Province for the employment contract to be concluded in Chinese. The contract can be drawn up in such languages as agreed by the parties. However, if the employment contract is written in both Chinese and a foreign language, and there are discrepancies between the two, the Chinese version shall prevail.

  3. If an employee, who is in his or her probation period, suffers from an illness or non-work-related injury and is within the statutory medical treatment period, the probation period can be suspended.

  4. In the old Labor Contract Rules of Jiangsu Province, the employer and the employee can agree on a prior notice period of more than 30 days for the termination of the employment contract by the employee. The New Rules reiterate such regulations. For instance in Jiangsu, the employer can agree with an employee who is subject to a confidentiality obligation to include a longer prior notice period of up to six months. Furthermore, the employer and employee may agree to change his or her work position or adjust the remuneration during the prior notice period.

  5. According to the PRC Labor Contract Law, if an employee proposes or agrees to renew the employment contract, the employer must conclude an indefinite term contract with the employee in the following situations:
    – if the employee has consecutively concluded fixed term contracts with the employer twice starting from 1 January 2008 or
    – if the employee has worked consecutively for the employer for ten years or more.
    An exception to this rule arises if the employee proposes to conclude a fixed term contract or if a termination clause has been satisfied.

    The New Rules reiterate the above provisions and further require the employer to inform the employee in writing about his or her entitlement to conclude an indefinite term employment contract, 30 days before the expiration of the fixed term contract. However for this obligation to arise, the employee must have fulfilled the statutory conditions of concluding an indefinite term contract.

  6. The employer is obliged to pay high-temperature subsidies or work position subsidies to employees in accordance with the national or local standard if they work in weather conditions with natural temperatures of 35 ͦ C or above or in a high temperature or humidity environment.

  7. The employment contract of an employee can be suspended under the following circumstances:
    (1) The employer and the employee agree to suspend the contract by reaching a mutual
    (2) The personal freedom of an employee is restricted due to a suspected crime;
    (3) The employment contract cannot be performed temporarily due to force majeure; or
    (4) Other circumstances as stipulated by laws and regulations.

    During such suspension, the employment relationship of the employee shall continue to exist. However, the employer is not obliged to pay salaries and social insurance contributions to the employee. Furthermore the suspended period will be excluded from the service period of the employee when calculating statutory severance payments.

  8. Where the employment contract of an employee is unilaterally terminated by the employer, the employer must notify the trade union in advance about the reasons for termination. If an enterprise has not established a trade union, it shall notify the trade union of the location where the enterprise is located.

  9. Any rules, regulations and major issues directly relating to the interests of the employees, as formulated, changed or decided by the enterprise can be notified to the employees by means of public notification such as posting in a public area, delivering in written form, notifying by emails or making publication on internal websites.

  10. Interns shall not be arranged to work for an enterprise for an accumulative period of more than 12 months. During the internship, interns shall work no more than 8 hours per day or 40 hours per week and shall receive compensation no less than the minimum monthly salary as announced by the local government.
China Insight - Employment & Pensions
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Jeanette Yu