Chapter III Labour Contracts and Collective Contracts

Article 16 A labour contract is an agreement that establishes the labour relationship between a laborer and an employing unit and defines the rights and obligations of respective parties.

A labour contract shall be concluded where a labour relationship is to be established.

Article 17 Conclusion and modification of a labour contract shall follow the principles of equality, voluntariness and agreement through consultation, and shall not run counter to the stipulations of laws, administrative rules and regulations.

A labour contract once concluded in accordance with the law shall be legally binding. The parties must fulfill the obligations stipulated in the labour contract.

Article 18 The following labour contracts shall be invalid:

(1) Labour contracts violating laws, administrative rules and regulations; and

(2) Labour contracts concluded by means of fraud or intimidation, etc.

An invalid labour contract shall have no legal effect from the time of its conclusion. Where a part of a labour contract is confirmed as invalid and where the validity of the remaining part is not affected, the remaining part shall remain valid.

The invalidity of a labour contract shall be confirmed by a labour dispute arbitration committee or a people's court.

Article 19 A labour contract shall be concluded in written form and contain the following clauses:

(1) Term of a labour contract;

(2) Work assignment;

(3) Labour protection and working conditions;

(4) Labour remuneration;

(5) Labour discipline;

(6) Conditions for the termination of the labour contract; and

(7) Liabilities for the violation of the labour contract.

Apart from the required clauses specified in the preceding paragraph, a labour contract may contain other clauses agreed upon by the parties through consultation.

Article 20 The term of a labour contract is classified into fixed term, non-fixed term and the completion of a specific assignment as a term.

Where a labourer has worked in the same employing unit for ten consecutive years or more and both parties agree to extend the term of the labour contract, if the labourer requests the conclusion of a labour contract with a non-fixed term, a labour contract with a non-fixed term shall be concluded.

Article 21 A probation period may be specified in a labour contract. The probation period shall not exceed six months.

Article 22 The parties to a labour contract may stipulate in the labour contract matters concerning keeping business secrets of the employing unit.

Article 23 A labour contract shall terminate immediately upon the expiration of its term or the occurrence of the conditions for the termination of the labour contract as agreed upon by the parties.

Article 24 A labour contract may be cancelled by agreement reached between the parties through consultation.

Article 25 If a labourer is under any of the following circumstances, the employing unit may cancel the labour contract with him:

(1) Having been proved not up to the requirements for recruitment during the probation period;

(2) Having seriously violated labour discipline or the rules and regulations of the employing unit;

(3) Having caused great losses to the employing unit through gross neglect of duty or malpractice for personal gains; and

(4) Having been investigated for criminal responsibility in accordance with the law.

Article 26 In any of the following circumstances, the employing unit may cancel the labour contract, however, a written notice shall be given to the labourer concerned 30 days in advance:

(1) Where a labourer is unable to take up his original work or any work specially arranged by the employing unit after completion of the period of his medical treatment for illness or not work-related injury;

(2) Where a labourer is unqualified for his work and remains unqualified even after receiving a training or after readjusting the work post; and

(3) Where the objective conditions taken as the basis for the conclusion of the contract have changed so greatly that the original labour contract cannot be carried out, and no agreement on modification of the labour contract can be reached through consultation by the parties.

Article 27 Where it is really necessary for an employing unit to cut down the number of workforce when it comes to the brink of bankruptcy and undergoes a statutory consolidation or runs deep into difficulties in production and management, the employing unit shall explain the situation to the trade union or all of its staff and workers 30 days in advance, solicit opinions from them and report to the administrative department of labour before it may cut down the number of workforce.

Where the employing unit that cut down the number of its workforce in accordance with this Article is to recruit personnel within six months, it shall give priority in employment to the persons who have been laid off.

Article 28 Where an employing unit cancelled its labour contracts according to the stipulations in Article 24, Article 26 and Article 27 of this Law, it shall make economic compensations in accordance with the relevant provisions of the State.

Article 29 Where a labourer is under any of the following circumstances, the employing unit shall not cancel its labour contract with the labourer by availing itself of the stipulations in Article 26 and Article 27 of this Law:

(1) Being confirmed to have totally or partially lost the ability to work due to occupational diseases or work-related injuries;

(2) Receiving medical treatment for diseases or injuries within the prescribed period of time;

(3) Being a female staff member or worker during her pregnant, puerperal, or breast-feeding period; or

(4) Other circumstances stipulated by laws, administrative rules and regulations.

Article 30 Where an employing unit cancelled its labour contract and the trade union considers it inappropriate, the trade union shall have the right to put forward its opinions. If the employing unit violated the law, rules or regulations or labour contracts, the trade union shall have the right to request that the matter be handled anew. Where the labourer applies for arbitration or institutes a lawsuit, the trade union shall render him support and assistance in accordance with the law.

Article 31 If a labourer is to cancel his labour contract, he shall give a written notice to the employing unit 30 days in advance.

Article 32 A labourer may, in any of the following circumstances, notify at any time the employing unit of his cancelation of the labour contract:

(1) Within the probation period;

(2) Where the employing unit forces the labourer to work by means of violence, intimidation or illegal restriction of personal freedom; or

(3) Failure on the part of the employing unit to pay labour remuneration or to provide working conditions as agreed upon in the labour contract.

Article 33 The staff and workers of an enterprise as one party may conclude a collective contract with the enterprise on matters relating to labour remuneration, working hours, rest and vacations, occupational safety and health, insurance and welfare. The draft collective contract shall be submitted to the congress of the staff and workers or to all the staff and workers for discussion and adoption.

A collective contract shall be concluded by the trade union on behalf of the staff and workers with the enterprise; in an enterprise where the trade union has not yet been set up, such contract shall be concluded by the representatives elected by the staff and workers with the enterprise.

Article 34 Upon conclusion of a collective contract, it shall be submitted to the administrative department of labour. If no objections have been raised by the administrative department of labour within 15 days from the date of receipt of the text of the contract, the collective contract shall go into effect automatically.

Article 35 A collective contract concluded in accordance with the law shall be binding on both the enterprise and all of its staff and workers. The standards of working conditions and labour remuneration agreed upon in labour contracts concluded between individual labourers and the enterprise shall not be lower than those stipulated in the collective contract.

Chapter IV Working Hours, Rest and Vacations

Article 36 The State shall practise a working hour system wherein labourers shall work for no more than eight hours a day and no more than 44 hours a week on the average.

Article 37 In case of labourers working on the basis of piecework, the employing unit shall rationally fix quotas of work and standards of piecework remuneration in accordance with the working hour system stipulated in Article 36 of this Law.

Article 38 The employing unit shall guarantee that its staff and workers have at least one day off in a week.

Article 39 Where an enterprise can not follow the stipulations in Article 36 and Article 38 of this Law due to the special nature of its production, it may, with the approval of the administrative department of labour, adopt other rules on working hours and rest.

Article 40 The employing unit shall, during the following festivals, arrange holidays for its labourers in accordance with the law:

(1) The New Year's Day;

(2) The Spring Festival;

(3) The International Labour Day;

(4) The National Day; and

(5) Other holidays provided by laws, rules and regulations.

Article 41 The employing unit may extend working hours as necessitated by its production or business operation after consultation with the trade union and labourers, but the extended working hour per day shall generally not exceed one hour; if such extension is needed for special reasons, under the condition that the health of labourers is guaranteed, the extended hours shall not exceed three hours per day. However, the total extension in a month shall not exceed thirty six hours.

Article 42 Under any of the following circumstances, the extension of working hours shall not be subject to restriction of the provisions of Article 41 of this Law :

(1) Where in the event of natural disasters, accidents or for other reasons, the life and health of labourers or the safety of property is in peril, and urgent dealing is needed;

(2) Where in the event of breakdown of production equipment, transportation lines or public facilities, production and public interests are affected; and rush repair must be done without any delay; or (3) Other circumstances stipulated by laws, administrative rules and regulations.

Article 43 The employing unit shall not extend working hours of labourers in violation of the provisions of this Law.

Article 44 Under any of the following circumstances, the employing unit shall, according to the following standards, pay labourers remunerations that are higher than those for normal working hours:

(1) To pay no less than 150 per cent of the normal wages if an extension of working hours is arranged;

(2) To pay no less than 200 per cent of the normal wages if work is arranged on off days and no make-up off days can be arranged; or

(3) To pay no less than 300 per cent of the normal wages if work is arranged on statutory holidays.

Article 45 The State shall practise a system of annual vacation with pay.

Labourers who have worked for one successive year or more shall be entitled to an annual vacation with pay. The specific measures therefore shall be formulated by the State Council.