Chapter I General Rules

Article 1 This Law is enacted and formulated in order to improve the labor contract system, specify the rights and obligations of both parties to the labor contracts, protect the legitimate rights and interests of the workers and construct and develop a harmonious and steady employment relationship.

Article 2 The establishment of employment relationship between enterprises, individual economic organizations, non-enterprise private entities and other entities (hereinafter referred to as the employers) and the workers thereof, as well as the conclusion, performance, alteration, cancellation or termination of labor contracts shall be governed by this Law.

This Law shall also apply to the state organs, public institutions, social organizations and workers bound up by labor contracts concerning the conclusion, performance, alteration, cancellation or termination of labor contracts.

Article 3 The conclusion of a labor contract shall be subject to the principle of legitimacy, justice, equality, free will, reaching consensus by consultation and good faith.

The labor contracts legally concluded shall have binding force. The obligations as agreed therein shall be observed by employers and workers.

Article 4 Employers shall establish and perfect labor bylaws so as to ensure that workers can enjoy labor rights and perform labor obligations.

Where employers constitute, modify or determine such bylaws or significant matters in direct relation to the real benefits of workers as the remuneration, working time, rest and vacation, work safety and health care, social insurance and welfare, job training, job discipline or quota management, the draft thereof shall be discussed at the workers?congress or by all the workers, which shall bring forward schemes and opinions. The aforesaid bylaws and significant matters shall be determined after equal consultation by employers and labor union or representatives of workers.

During the process of the implementation of the aforesaid bylaws and significant matters, the labor union or the workers is/are entitled to require the employer to modify or improve them by consultations if it/they find them improper.

The employers shall publicize the bylaws and significant matters in direct relation to the real benefits of the workers or inform the workers.

Article 5 The labor administrative department of the people'S government above the county level shall, in collaboration with workers?congresses and the representatives from enterprises, establish and perfect a three-party mechanism for coordinating labor relationship and shall jointly research relevant major issues with respect to labor relationship.

Article 6 The labor union shall assist and direct the workers to conclude and perform labor contracts with the employers and establish a collective negotiation mechanism with employers in order to safeguard the legitimate rights and interests of the workers.

Chapter II Conclusion of Labor Contracts

Article 7 An employer establishes labor relationship with a worker as of the date of using the worker. It shall set up a roll of workers for reference.

Article 8 When hiring the workers, the employer shall faithfully notify them of the job contents, conditions and place, occupational harm, work safety status, remuneration and other information as required by the workers. The employer is entitled to be aware of the basic information of the workers in direct relation to the labor contracts, and the workers shall provide such information authentically.

Article 9 Where a worker is hired, the employer may not detain the identity card or other certificates thereof, nor may it require a guaranty or collect property from the worker under any other reason.

Article 10 To establish a labor relationship, parties shall conclude a labor contract in written form.

Where a labor relationship has already been established without concluding a labor contract in written form at the same time, parties shall conclude a labor contract in written form within one month as of the date of using the worker.

Where a labor contract is concluded by an employer and a worker before the employment, the labor relationship is established as of the date of using the worker.

Article 11 Where any employer fails to conclude a labor contract in written form without specific remuneration stipulated thereof when it starts to use a worker, the remuneration to the new worker shall be consistent with the provisions of the collective contract. If there is no collective contract or such stipulation in the collective contract, it shall follow the principle of equal pay for equal work.

Article 12 Labor contracts are classified into labor contracts with a fixed period, labor contracts without a fixed period and labor contracts with a period to complete the prescribed work.

Article 13 Labor contracts with a fixed period are the labor contracts in which the termination time of the contracts has been stipulated by the employers and workers.

Employers and workers may conclude labor contracts with a fixed period upon consultation.

Article 14 Labor contracts without a fixed period are the labor contracts in which no certain termination time of the contract is stipulated by the employers and workers.

Employers and workers may conclude labor contracts without a fixed period upon consensus by consultation. In the case of any of the following circumstances, if the worker proposes or agrees to renew or conclude a labor contract, a labor contract without a fixed period shall be concluded except that the worker proposes to conclude a labor contract with a fixed period:

(1) The worker has worked for an uninterrupted term of 10 years for the employer;

(2) The worker has worked for an uninterrupted term of 10 years for the employer and he reaches the age which is less than 10 years up to the statutory retirement age when the employer initially performs the labor contract system or when a restructuring state-owned enterprise re-concludes the labor contract; or

(3) The labor contract is to be renewed after the labor contract with a fixed period has been concluded twice continuously, and the worker is not under any of the circumstances as prescribed in Article 39 and Subparagraphs (1) and (2) of Article 40 in this Law.

In case any employer fails to sign a labor contract in written form with a worker after one year as of the date of using him, it shall be regarded that the employer and the worker has concluded a labor contract without a fixed period.

Article 15 Labor contracts with a period to complete the prescribed work are the labor contracts in which the period of the contract shall be stipulated upon the completion of the prescribed work by the employers and workers.

Employers and workers may conclude labor contracts with a period to complete the prescribed work upon consensus by consultation.

Article 16 A labor contract shall be concluded upon consensus by consultation of the employer and the employee, and it shall become effective upon the signatures or seals on the text of the labor contract by the employer and the worker.

The employer and the worker shall hold one copy of the text of the labor contract respectively.

Article 17 A labor contract shall contain the clauses as follows:

(1) The employer'S name, residence and legal representative or major principal;

(2) The worker'S name, residence and number of identity card or any other valid identity certificate;

(3) The time limit for the labor contract;

(4) The work contents and place;

(5) The work time, rest and vocation;

(6) The remunerations;

(7) The social security;

(8) The labor protection, work conditions and protection against and prevention of occupational harm; and

(9) Other matters that shall be incorporated in the labor contract according to any law or regulation.

Except for the essential clauses as specified in the preceding paragraph, the probation period, training, confidentiality, supplementary insurances, fringe benefit as well as other items may be stipulated in the labor contract by the employer and the worker upon consensus.

Article 18 In the case of any dispute due to any unspecified remunerations, work conditions and other criterions in the labor contracts, employers and workers may have another negotiation. If there is no agreement upon the negotiations, the provisions of the collective contracts shall be observed. If there is no collective contract or no such stipulation relating to the remuneration, the principle of equal pay for equal work shall be followed. If there is no collective contract or such stipulation concerning the work conditions and other criterions in the collective contract, the relevant provisions of the state shall be abided by.

Article 19 Where the term of a labor contract is above three months but less than one year, the probation period thereof shall not be more than one month. Where the term of a labor contract is above one year but less than three years, the probation period thereof shall be less than two months. With respect to a labor contract with a fixed period of above three years or without a fixed period, the probation period thereof shall not be in excess of six months.

An employer can only stipulate one probation period with a same worker.

No probation period may be stipulated in a labor contract with a period to complete the prescribed work or a labor contract with a fixed period of less than three months.

The probation period shall be contained in the term of labor contracts. If only the probation period is stipulated in a labor contract, it shall be untenable and the said period shall be the term of the labor contract.

Article 20 During the probation period, the salary of a worker shall not be lower than the minimum salary for the same post of the same employer or not lower than 80 percent of the wage as stipulated in the labor contract, nor may it be lower than the minimum wage of the locality where the entity is situated.

Article 21 During the probation period, unless the worker is under any of the circumstances as prescribed in Article 39 and Subparagraphs (1) and (2) of Article 40 of this Law, the employer shall not terminate the labor contract. If the employer terminates the labor contract during the probation period, it shall make an explanation to the worker.

Article 22 Where an employer pays special training expenses exclusively for a worker for special technical training, it may conclude an agreement with the worker concerning the service period.

Where any worker is in violation of the service period stipulation, he shall pay the employer a penalty for breach of contract as stipulated. The amount of penalty for breach of contract shall not be in excess of the training fees as provided by the employer. The penalty for breach of contract that the worker pays as required by the employer shall be no more than the training expenses amortized in the service period unperformed.

In the case of any stipulated service period between the employer and the worker, it shall not influence the increase of the remuneration of the worker during the service period under the normal wage adjustment mechanism.

Article 23 Employers and workers may stipulate such issues as keeping confidential the business secrets and intellectual property rights of the employers in the labor contract.

With respect to a worker who has the obligation of keeping secrets, the employer may stipulate non-competition clauses with the worker in the labor contract or in the confidentiality agreement and stipulate that economic compensations shall be given to the worker by month within the non-competition period after the labor contract is cancelled or terminated. Where the worker is in violation of the stipulation on non-competition, he shall pay a penalty for breach of contract to the employer.

Article 24 The personnel under non-competition shall be limited to senior mangers, senior technicians and other personnel who have the obligation to keep secrets in the entity. The range, geographical scope and time limit for non-competition shall be stipulated by the employer and the worker. The stipulation relating to non-competition shall not violate any law or regulation.

After the cancellation or termination of a labor contract, the period of non-competition for any of the persons referred to in the preceding paragraph to work for any other employer producing or engaging in products of the same category or conducting business of the same category as this employer shall not be more than two years.

Article 25 Except for the circumstances as prescribed in Articles 22 and 23 of this Law, the employer shall not stipulate in the labor contract that the worker shall pay the penalty for breach of contract.

Article 26 The following labor contracts are invalid or are partially invalid if:

(1) Any party concludes or modifies, by way of deception or coercion or taking advantage of the other party'S difficulties, makes the other party to conclude or to make an amendment of a labor contract that is contrary to that party'S true will;

(2) Any employer exempts its legal liability thereof or denies the worker'S rights; or

(3) Any violation of mandatory provisions of laws or administrative regulations occurs.

In the case of any dispute relating to the invalid or partially invalid labor contract, the labor dispute arbitration institution or the people'S court shall be responsible for the confirmation.

Article 27 In case the invalidity of any part of a labor contract does not affect the validity of the other parts thereof, the other parts shall still remain valid.

Article 28 Where a labor contract is confirmed as invalid, if the worker has already worked for the employer, the employer shall pay remunerations to the worker. The amount of remunerations shall be determined according to the remuneration to the workers taking up the same or similar posts of this entity by analogy.

Chapter III Performance and Alteration of Labor Contracts

Article 29 Employers and workers shall fully perform their obligations respectively in accordance with the stipulations in the labor contracts.

Article 30 An employer shall pay the workers thereof the full amount of remunerations in a timely manner in accordance with the contractual stipulations and the provisions of the state.

In case any employer postpones or fails to pay the full amount of remunerations, workers may apply to the local people'S court for an order of payment and the people'S court shall issue an order of payment according to law.

Article 31 Employers shall strictly perform the criterion on labor quota, and may not force any worker to work overtime or do so in a disguised form. As for the employer that arranges overtime work, it shall pay the worker for the overtime work in accordance with the relevant provisions of the state.

Article 32 Where any worker refuses to perform dangerous operations due to the illicit command or forcibly order of the manager of the employer, he may not be deemed to be in violation of the labor contract.

Workers are entitled to criticize, expose to the authorities or bring a lawsuit against the employer if the employer'S work conditions may endanger their life safety and health.

Article 33 Alterations of the name, legal representative, key principal or investor of any employer may not influence the performance of the labor contracts.

Article 34 In the case of merger or split-up of the employer, the original labor contracts thereof shall still remain valid. Such labor contracts shall be performed by the employer succeeding to the rights and obligations of the aforesaid employer.

Article 35 Employers and workers may alter the contents as stipulated in the labor contract upon consensus by consultation. The alterations to the labor contracts shall be made in written form.

The employer and the worker shall hold one copy of the altered labor contract respectively.

Chapter IV Cancellation and Termination of Labor Contracts

Article 36 An employer and a worker may cancel the labor contract upon consensus by consultation.

Article 37 A worker may cancel the labor contract if he informs the employer in written form 30 days in advance. During the probation period, a worker may cancel the labor contract if he informs the employer three days in advance.

Article 38 In the case of any of the following circumstances occurring to an employer, a worker may cancel the labor contract:

(1) It fails to provide labor protection or work conditions as stipulated in the labor contract;

(2) It fails to pay the full amount of remunerations in a timely manner;

(3) It fails to pay social security premiums for the workers according to law;

(4) The bylaws thereof are inconsistent with any law or regulation and damage the rights and interests of the workers;

(5) A labor contract is invalid due to the circumstance referred to in Paragraph 1 of Article 26 of this Law; or

(6) Any other circumstance as prescribed by law or administrative regulation under which the labor contract may be cancelled.

Where any worker is forced to work by violence, threat or illegally limiting his personal freedom, or is forced to perform dangerous operations which may endanger his personal safety under illicitly commands or forces of the employer, the worker may immediately cancel the labor contract without informing the employer in advance.

Article 39 In the case of any of the following circumstances occurring to a worker, the employer may cancel the labor contract:

(1) He has been proved not to satisfy the recruitment requirements during the probation period;

(2) He is in serious violation of the bylaws of the employer;

(3) He causes any severe damages to the employer due to his grave negligence to duties or seeking private benefits;

(4) He establishes a labor relationship with other employers at the same time and may seriously influence his completion of the work in this entity, or he refuses to make a correction after the employer has pointed it out;

(5) The labor contract is invalidated due to the circumstance referred to in Subparagraph (1), Paragraph 1, Article 26 of this Law; or

(6) He is subject to criminal liabilities according to law.

Article 40 In the case of any of the following circumstances, the employer may cancel the labor contract after it notifies the worker himself in written form 30 days in advance or after it pays the worker an extra month'S salary:

(1) The worker falls ill or is injured for a non-work-related reason, and is not able to bear the original post after the expiration of the medical treatment period as prescribed, nor can he assume any other position as arranged by the employer;

(2) The worker is incapable of doing his job and remains so upon training or upon adjustment to his post; or

(3) The objective circumstance on which the conclusion of the labor contract is based has changed significantly, which results in that the labor contract is unable to be performed and no agreement concerning the modification of contents of the labor contract is reached after consultation between the employer and the worker.

Article 41 In the case of any of the following circumstances, if the employer needs to cut down above 20 workers, or if it needs to cut down less than 20 workers but the number accounts for 10 percent or above of the total number of the workers, the employer shall make an explanation to the labor union or to all workers 30 days in advance. After it has solicited the opinions of the labor union or the workers, it may have the reduction after reporting the plan to the labor administrative department:

(1) It is under revitalization in accordance with the Enterprise Bankruptcy Law;

(2) Serious problems in production and business operation occur;

(3) The enterprise has changed products, made significant technological renovation or adjusted the form of business operation, and still needs to have reduction after the labor contracts are altered; or

(4) The objective economic circumstance, on which the labor contract is based, has altered significantly and it is unable to perform the labor contract.

Priority shall be given to the following workers when the employer has a reduction:

(1) Those who have concluded labor contracts with a long fixed period;

(2) Those who have concluded labor contracts without a fixed period; and

(3) Those whose family has no other workers and have seniors or minors to support.

If any employer that cuts down the number of workers according to Paragraph 1 of this Article intends to hire new workers within six months after the reduction, it shall inform the workers cut down and shall give priority to the workers cut down under equal conditions.

Article 42 In the case of any of the following circumstances occurring to a worker, the employer may not cancel the labor contract in accordance with Articles 40 and 41 of this Law:

(1) Any worker who conducts operations exposing him to occupational disease hazards has not gone through an occupational health check before leaving his post, or is suspected of having an occupational disease and is under diagnoses or medical observation;

(2) Any worker who has occupational disease or was injured at work has lost or partially lost his capacity to work as confirmed during his employment with the employer;

(3) Any worker is suffering from illness or is injured not at work, and the period of medical treatment as prescribed therefore has not expired;

(4) Any female worker is in her pregnancy, confinement or lactation period;

(5) Any worker has been working for the employer for more than 15 years continuously and it is less than five years away from his legal retirement age; or

(6) Other circumstances as prescribed by laws or administrative regulations.

Article 43 Any employer that cancels a labor contract unilaterally shall notify the labor union with relevant explanations in advance. In case the employer is in violation of any law, administrative regulation or stipulation of the labor contract, the labor union is entitled to require the employer to make a correction. The employer shall take the opinions of the labor union into account and notify the labor union concerning the relevant results in written form.

Article 44 In the case of any of the following circumstances, labor contracts shall be terminated:

(1) The term of the labor contract expires;

(2) The worker has begun to enjoy the basic endowment insurance treatment;

(3) The worker is deceased, or is dead or missing as announced by the people'S court;

(4) The employer is announced bankrupt according to law;

(5) The employer is revoked of business license thereof, ordered to close down, discharged, or it determines to dismiss before the schedule; or