Laws of the People's Republic of China

Ministry of Labor and Social Security

Order of the Ministry of Labor and Social Security of the People's Republic of China

No. 22

The Provisions on Collective Contracts, which were adopted at the 7th executive meeting of the Ministry of Labor and Social Security, are hereby promulgated and shall come into force as of May 1, 2004.

the Minister of the Ministry of Labor and Social Security Zheng Silin

January 20, 2004

Provisions on Collective Contracts

Chapter I General Provisions

Article 1

With a view to regulating the acts of conducting collective negotiations and concluding collective contracts, protecting the legitimate rights and interests of the workers and the employing entities, the present Provisions are formulated according to the Labor Law of the People's Republic of China and the Trade Union Law of the People's Republic of China.

Article 2

The present Provisions shall apply to the enterprises and the public institutions implementing enterprise-management within the territory of China (hereinafter referred to as the employing entities) that conduct collective negotiations and conclude collective contracts with their respective employees.

Article 3

The term "collective contract" as mentioned in the present Provisions refers to the written agreement concluded between an employing entity and its workers on items such as labor remuneration, working hours, rest and vacations, labor safety and health, professional training and insurance and welfare through collective negotiation according to laws, regulations and rules. The term "special collective contract" as mentioned in the present Provisions refers to the special written agreement concluded between an employing entity and its workers on a specific item according to laws, regulations and rules.

Article 4

When signing a collective contract or a special collective contract and determining the related matters, the employing entity and its workers shall adopt the way of collective negotiation which shall be conducted mainly in the form of negotiation meeting.

Article 5

When conducting a collective negotiation or signing a collective contract or a special collective contract, the parties concerned shall adhere to the following principles:

(1)

abiding by laws, regulations and rules and relevant provisions of the state;

(2)

respecting each other and negotiating equally;

(3)

keeping honest and good faith, conducting fair cooperation;

(4)

taking into consideration the legitimate rights and interests of both parties simultaneously;

(5)

not taking extreme actions.

Article 6

The collective contract or special collective contract that accord with the present Provisions shall have legal binding force on the employing entity and all of its employees.

The standards for working conditions and labor remuneration as provided for in the labor contract signed by an employing entity and an employee shall not be lower than those in the collective contract or special collective contract.

Article 7

The administrative departments of labor and social security at (or above) the level of county shall, within their respective administrative areas, conduct supervision over the conditions of the collective negotiations, the signing and fulfillment of collective contracts of the employing entities and their respective employees, and shall be responsible for the examination of the collective contracts or special collective contracts.

Chapter II Content of Collective Negotiation

Article 8

Both parties to the collective negotiation may conduct collective negotiation on some or one of the following matters, and sign a collective contract or special collective contract:

(1)

labor remuneration;

(2)

working hours;

(3)

rest and vacations;

(4)

labor safety and health;

(5)

additional insurance and welfare;

(6)

special protection for female employees and minors;

(7)

trainings of professional skills;

(8)

management of labor contracts;

(9)

rewards and punishments;

(10)

staff reduction;

(11)

the term of collective contract;

(12)

procedures for modifying or canceling the collective contract;

(13)

settlement of disputes, which arise in fulfilling the collective contract, through negotiation;

(14)

liabilities for breach of collective contracts;

(15)

other matters agreed on by both parties through negotiation.

Article 9

The labor remuneration shall mainly include:

(1)

the level of wages, the wage distribution system, the wage standards and the wage distribution method of an employing entity;

(2)

the measures for wage payment;

(3)

the overtime wages and the standards on allowances or subsidies and the measures for distribution of premium;

(4)

the measures for the adjustment of wages;

(5)

the wages and treatments during the probation period, sick leaves or private affair leaves;

(6)

the measures for paying the wages (subsistence allowance) to the employees under special circumstances;

(7)

other measures for distributing labor remuneration.

Article 10

The working hours shall mainly include:

(1)

the system of working hours;

(2)

the measures for overtime work;

(3)

the working hours for special jobs;

(4)

the standard for labor quota.

Article 11

The rest and vocations shall mainly include:

(1)

the measures for the daily rest time, weekly rest days arrangement and annual vocations;

(2)

the rest time and vocations for employees who are unable to implement the standard working hours;s

(3)

other vocations.

Article 12

The labor safety and health shall mainly include:

(1)

the labor safety and health responsibility system;

(2)

the working conditions and safety technologies and measures;

(3)

the procedures for safe operation;

(4)

the standard for distributing labor protection appliances;

(5)

regular health examinations and occupation health examinations.

Article 13

The additional insurances and welfares shall mainly include:

(1)

the types and scopes of the additional insurances;

(2)

the basic welfare system and welfare facilities;

(3)

the extension of medical leaves and the treatments;

(4)

the welfare system to the relatives of the employees.

Article 14

The special protection of female employees and minors shall mainly include:

(1)

the work that shall not be assigned to female employees and minors;

(2)

the labor protection for female employees during periods of emmenia, pregnancy, confinement and breast feeding;

(3)

the regular health examination for female employees and minors;

(4)

the employment and registration system of minors.

Article 15

The training of professional skills shall mainly include:

(1)

the programming of professional skill trainings and the annual plan;

(2)

the extracting and use of fees for the training of professional skills;

(3)

the measures for guaranteeing and perfecting the training of professional skill.

Article 16

The management of labor contracts shall mainly include:

(1)

the date when a labor contract is concluded;

(2)

the conditions for determining the duration of a labor contract;

(3)

the general principles for modifying, canceling and renewing a labor contract, and the conditions for terminating a labor contract without fixed time limit;

(4)

the conditions and time limit for the probation.

Article 17

The rewards and punishments shall mainly include:

(1)

the labor disciplines;

(2)

the performance evaluation, reward and punishment system;

(3)

the reward and punishment procedures;

Article 18

The staff reduction shall mainly include:

(1)

the program for staff reduction;

(2)

the procedures for staff reduction;

(3)

the implementing measures for staff reduction and the compensation standards;

Chapter III Representatives of Collective Negotiation

Article 19

The term "representatives of collective negotiation" (hereinafter referred to as representatives) as mentioned in the present Provisions refers to people who are elected according to legal procedures and are entitled to take part in the collective negotiation on behalf of the interests of their own party.

Both parties to a collective negotiation shall have the same number of representatives. Each party shall have at least 3 representatives and assign one of them as the chief representative.

Article 20

The representatives of collective negotiation on behalf of the employees shall be designated by the labor union of the entity. In the case of absence of a labor union, they shall be subject to the democratic recommendation by the employees of this entity and shall be subject to the consent by at least half of the employees.

The chief representative on behalf of the employees shall be the chairman of the labor union of this entity. The chairman of the labor union may entrust in written form another representative to take the position of the chief representative. In the case of absence of the chairman of the labor union, the chief representative shall be the major person in charge of the labor union. In the case of absence of the labor union, the chief representative on behalf of the employees shall be elected through democratic recommendation by the representatives.

Article 21

The representatives on behalf of the employing entity shall be designated by the legal representative of this entity, and the chief representative shall be the legal representative of this entity or another manager entrusted by him in written form.

Article 22

The time limit for representatives to perform their responsibilities shall be determined by the parties they represent.

Article 23

The chief representative of each party of collective negotiation may entrust in written form some professionals outside the entity as representatives, and the number of entrusted persons shall not exceed one third of the representatives from this entity.

The chief representative shall not be a person outside the entity.

Article 24

No person may concurrently act as a representative of the employing entity and a representative of the employees.

Article 25

The representatives shall perform the following duties:

(1)

to participate in the collective negotiation;

(2)

to accept the inquiries of the persons of the party represented by them, and timely announce the information on the negotiation to the persons of the party represented by them and ask them for advices;

(3)

to supply the information and materials related to the collective negotiation;

(4)

to take part in the settlement of the disputes under collective negotiation on behalf of the party represented by them;

(5)

to conduct supervision over the fulfillment of the collective contract or special collective contract;

(6)

other duties as provided for in the laws, regulations and rules.

Article 26

The representatives shall protect the normal production or work order of the entity, and shall not have any acts of threatening, buying over or cheating.

The representatives shall keep confidential the commercial secrets of the employing entity that they have learned in the course of collective negotiation.

Article 27

The representatives inside an enterprise who have participated in the collective negotiation shall be deemed as having provided normal labor.

Article 28

Where the labor contract of a representative expires during the period of his performing the duties as a representative, it shall automatically extend to the date when he fulfills his duties,And the employing entity shall not cancel the labor contract unless he is under any of the following circumstances:

(1)

having seriously violated the labor disciplines or the provisions and rules formulated by the employing entity pursuant to law;

(2)

having seriously neglected his duties or seeking private interests, which leads to serious impairment to the interests of the employing entity;

(3)

being subject to criminal liabilities.

During the period of a person' performing of the duties as a representative, the employing entity shall not change his post without justifiable reasons.

Article 29

Where there is any dispute between a representative of the employees and the employing entity due to the matters as provided for in Articles 27 and 28, an application for arbitration may be filed to the local arbitration commission for labor disputes.

Article 30

The labor union may change the representatives of the employees. In the case of absence of the labor union, the representatives of the employees may be changed upon the consent of at least half of the employees.

The legal representative of the employing entity may change the representatives of the employing entity.

Article 31

Where there is any absence of a representative due to change, resignation or any other force majeure, a new representative shall be elected within 15 days from the day when the absence occurs according to the present Provisions.

Chapter IV Procedures for Collective Negotiation

Article 32

Either party of the collective negotiation may make a written request for collective negotiation to the other party on signing a collective contract or special collective contract and the related matters.

Where a party makes a request for collective negotiation, the other party shall give it a written reply within 20 days from the day when it receives the request, and shall not refuse to conduct collective negotiation without justifiable reasons.

Article 33

The representatives shall make the following preparations before the negotiation:

(1)

to get familiar with the laws, regulations, rules and systems related to the collective negotiation;

(2)

to learn the information and materials related to the collective negotiation, collect the opinions of the employing entity and the employees on the collective negotiation;

(3)

to determine the matters under collective negotiation, which may be drafted by the party that makes a request for collective negotiation or may be jointly drafted by the representatives assigned by both parties;

(4)

to determine the time and place of the collective negotiation;

(5)

to jointly determine a non-negotiation representative as the note-keeper of the collective negotiation. The note-keeper shall keep neutral and impartial and keep the secrets of both parties of the collective negotiation.

Article 34

The meeting of collective negotiation shall be hosted by the chief representatives of both parties in turn, who shall accord with the following procedures:

(1)

Announcing the agenda and disciplines of the meeting;

(2)

The chief representative of a party sets forth the specific content and requests for the collective negotiation, and the chief representative of the other party makes corresponding responses;

(3)

Both parties state their respective opinions on the matters under negotiation, and fully discuss them;

(4)

The chief representatives of both parties sum up the opinions. Where an agreement is reached, a draft collective contract or a draft special collective draft shall be formed, and shall be signed by the chief representatives of both parties.

Article 35

Where no agreement is reached or any unexpected issue arises, the negotiation may be suspended upon mutual agreement. The time limit for the suspension and the time, place and content of next negotiation shall be determined by both parties upon mutual agreement.

Chapter V The Conclusion, Modification, Cancellation and Termination of Collective Contracts

Article 36

The draft of a collective contract or of a special collective contract agreed on by the representatives of both parties shall be submitted to the employees representative assembly or all the employees for discussion.

When the employees representative assembly or all the employees discuss the draft of a collective contract or the draft of a special collective contract, at least two thirds of the members of the employees representative assembly or of all the employees shall be present. The draft of the collective contract or the draft of the special collective contract shall not be adopted unless it is agreed upon by at least half of the members of the employees representative assembly or of all the employees.

Article 37

The draft of a collective contract or the draft of a special collective contract adopted at the employees representative assembly or the employees assembly shall be signed by the chief representatives of both parties of the collective negotiation.

Article 38

In general, the period of validity of a collective contract or a special collective contract shall be 1 to 3 years, which shall be terminated at its expiration or under the conditions for termination as agreed on by both parties.

Within 3 months prior to the expiration of a collective contract or a special collective contract, either party may request the other party to sign a new contract or renew the contract.

Article 39

Where both parties reach an agreement, a collective contract or a special collective contract may be modified or cancelled.

Article 40

A collective contract or a special collective contract may be modified or cancelled under any of the following circumstances:

(1)

It is unable to perform the collective contract or the special collective contract for the employing entity is merged, dissolved or bankrupt;

(2)

It is unable to perform the collective contract or the special collective contract or part of the said contract in due to force majeure;

(3)

The conditions for modifying or canceling the collective contract or the special collective contract arises;

(4)

Other circumstances as stipulated in the laws, regulations and rules.

Article 41

The procedures for the collective negotiation as stipulated in the present Provisions shall apply to the modification or cancellation of a collective contract or a special collective contract.

Chapter VI Examination on Collective Contracts

Article 42

After a collective contract or a special collective contract is signed or modified, the employing entity shall submit the text in triplicate to the administrative department of labor and social security within 10 days as of the day when the chief representatives sign the contract.

The administrative department of labor and social security shall check in the submitted collective contract or special collective contract.

Article 43

The examination on collective contracts or special collective contracts shall adopt territorial administration, and the specific scope of administration shall be specified by the administrative department of labor and social security at the provincial level.

The collective contracts of enterprises under the Central Government and those of the employing entities of trans-province, trans-autonomous region or trans-municipality directly under the Central Government shall be submitted to the administrative department of labor and social security at the provincial level as specified by the Ministry of Labor and Social Security.

Article 44

The administrative department of labor and social security shall examine the validity of a collective contract or a special collective contract submitted to it in light of the following items:

(1)

whether the qualifications of subjects of both parties of the collective negotiation are in line with laws, regulations and rules;

(2)

whether the procedures for collective negotiation is in violation of laws, regulations and rules;

(3)

whether the content of the collective contract or the special collective contract is contrary to the provisions of the state.

Article 45

Where the administrative department of labor and social security has any objection to a collective contract or a special collective contract, it shall serve the Examination Opinion to the negotiation representatives of both parties within 15 days as of the day when it receives the text. The Examination Opinion shall specify the following contents:

(1)

the names, addresses of both parties of the collective contract or special collective contract;

(2)

the date on which the administrative department of labor and social security receives the collective contract or the special collective contract;

(3)

the examination opinions;

(4)

the date on which the examination opinions are formed.

The Examination Opinion shall be affixed with the seal of the administrative department of labor and social security.

Article 46

Where the employing entity and its employees conclude a new collective contract or a new special collective contract after collective negotiation on the objections put forward by the administrative department of labor and social security, the employing entity shall submit the new contract to the administrative department of labor and social security for examination pursuant to Article 42 of the present Provisions.

Article 47

Where the administrative department of labor and social security raises no objection within 15 days as of the day when it receives the text, the collective contract or special collective contract shall go into effect forthwith.

Article 48

The valid collective contract or special collective contract shall be timely announced by the negotiation representatives to all of the members they are on behalf of in a proper form as of the day when the contract go into effect.

Chapter VII Mediation and Settlement of Disputes in Collective Negotiation

Article 49

Where both parties fail to settle the disputes arising during a collective negotiation through negotiation, either party or both parties may file a written application to the administrative department of labor and social security for mediation and settlement. Where no application is filed, the administrative department of labor and social security may mediate and settle the disputes when it deems necessary.

Article 50

The administrative department of labor and social security shall organize people of the labor union at the same level and the enterprise organization to jointly mediate and settle the disputes arising during a collective negotiation.

Article 51

The disputes arising during a collective negotiation shall be under territorial administration, and the specific scope of administration shall be provided for by the administrative department of labor and social security.

With regard to disputes arising during a collective negotiation of an enterprise under the Central Government or an employing entity of trans-province, trans-autonomous region or trans-municipality directly under the Central Government, the administrative department of labor and social security at the provincial level designated by the Ministry of Labor and Social Security shall organize people of the labor union at the same level and the enterprise organization to mediate and settle the disputes, and the Ministry of Labor and Social Security may organize relevant parties to mediate and settle as well when necessary.

Article 52

The mediation and settlement of the disputes arising during a collective negotiation shall be completed within 30 days as of the day when an application for mediation and settlement is received. If it hasn't been finished within the time limit, the time limit may be extended appropriately, but the extended time shall not exceed 15 days.

Article 53

The mediation and settlement of the disputes arising during a collective negotiation shall proceed as follows:

(1)

to accept an application for mediation and settlement;

(2)

to investigate into and learn the information on the disputes;

(3)

to discuss and formulate a program on mediation and settlement of the disputes;

(4)

to mediate and settle the disputes;

(5)

to make a Mediation and Settlement Agreement.

Article 54

The Mediation and Settlement Agreement shall include the application for mediation and settlement, the facts of disputes and mediation results. Where both parties fail to reach an agreement on some of the matters being negotiated, it shall specify the relevant matters to be negotiated continuously. The Mediation and Settlement Agreement shall come into force after being affixed with the signatures or seals of the persons responsible for the mediation and settlement of the disputes arising during the collective negotiation and the chief representatives of both disputing parties. Both disputing parties shall accord with the Mediation and Settlement Agreement after it takes effect.

Chapter VIII Supplementary Provisions

Article 55

Where the parties concerned fail to settle through consultation the dispute arising when fulfilling a collective contract, they may file an application to the arbitration commission for labor disputes pursuant to law.

Article 56

Where an employing entity refuses, without any justifiable reason, the request for the collective negotiation made by the trade union or the representatives of the employees, it shall be punished according to the Trade Union Law and other relevant laws and regulations.

Article 57

The present Provisions shall go into effect as of May 1, 2004, and the Provisions on Collective Contracts promulgated by the former Ministry of Labor on December 5, 1994 shall be abolished simultaneously.