Topic: China

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Transfer of employees in China

When structuring an acquisition or disposal of a business in China, the transfer of employees is one of the key points that the parties need to consider. Under PRC law, if an acquisition or disposal is structured as a share deal, so that  the buyer acquires the equity in the target company, the employees of … Continue reading

Social Insurance in China

Having developed over decades, the social insurance scheme in China has been gradually unified nationwide and is now primarily regulated by the PRC Social Insurance Law (SIL), which came into effect in 2011. Prior to the SIL, the social insurance scheme in China was regulated by various administrative regulations. The SIL consolidated the social insurance … Continue reading

Working Hours and Annual Leave in China

Working Hours PRC law recognises three categories of working hour systems: (i) the Standard Working Hour System; (ii) the Flexible Working Hour System; and (iii) the Comprehensive Working Hour System.  Each system varies in its applicability to employment positions and industries within the PRC. The Standard Working Hour System provides that an employee may work … Continue reading

Termination of an Employment Contract in China

PRC law has stringent restrictions on the termination of employment contracts. Generally, an employment contract can be terminated by mutual agreement between the employer and the employee. In the absence of the employee’s consent, PRC law provides very limited grounds for termination of an employment contract by the employer. There are two categories of statutory … Continue reading

Dispatching Arrangement in China

A labour dispatching arrangement in the People’s Republic of China (PRC) is essentially a method for indirectly engaging staff via an employment agency (commonly termed a dispatching agent). It is regulated by the PRC Employment Contract Law (the ECL).    A typical dispatching arrangement involves three parties (i.e. the employee, the dispatching agent and the employing … Continue reading

Restrictive Covenants in China

Restrictive covenants imposed on employees in the People’s Republic of China (PRC) are normally in the form of non-compete and non-solicitation obligations. PRC law sets out some general principles on non-compete obligations but is silent on non-solicitation obligations which are therefore generally subject to the mutual agreement of the parties concerned. As a general principle … Continue reading
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