Regulations of Shenzhen Special Economic              

Zone on Labor Contract

 (Originally adopted at the twenty-fourth meeting of the Standing Committee of the first Shenzhen Municipal People' s Congress on August 4, 1994. Revised at the sixteenth meeting of the Standing Committee of the second Shenzhen Municipal People' s Congress on July 15,1997).

Chapter¢ñ General Provision

Article 1 These regulations are formulated in order to protect the lawful rights and interests of the employing unit and the employers, standardize the employing conducts of the employing unit, maintain the order of the labor market of Shenzhen Special Economic Zone (hereinafter referring to as "Special Zone" ), and promote the development of economy, these regulations are formulated.

Article 2  "Labor Contract" is an agreement that establishs the labor relationship between an employee and a employing unit, and defines the rights and liabilities of respective party.  

Article 3  "Employee" in these regulations means the person who recruited by the units in Special Zone, excluding civil servants and the persons whose treatment  is based on the civil servants' . "Employer" in these regulations means the enterprises, institutions, social groups and personal business organizations in Special Zone that need to recruit an employee.

Article 4 When concluding labor contracts, the parties shall abide by the provisions of laws and the administrative regulations, and shall observe the principles of equality, voluntariness, and reaching unanimity through consultation.

Article 5 A labor contract, once concluded in accordance with law, shall be legally binding and the parties shall conduct strict performance.

Article 6 The regulation shall be implemented and supervised by labor management department of Shenzhen municipal (hereinafter referring to as labor management department).

 Chapter ¢ò   Conclusion and Performance of Labor Contracts

Article 7 A labor contract shall be concluded where a labor relationship is to be established.

A labor contract shall be concluded in written form, and shall be held by both of the parties respectively.

The labor department shall order the employing units to conclude a labor contract in a certain period if labor contract fails to be concluded within 30 days after the employing unit recruits an employee. If the employing unit refuses to do, the labor department shall impose on it a fine of 50 yuan for each person who have not concluded a labor contract with. If damages have caused to the labor for failing to conclude labor contracts due to the employing unit, the employing unit shall be liable for compensation.

If the employers refuses to render the employees to hold the labor contract, the labor department shall conduct them according to the provisions of the preceding paragraph.

Article 8 A labor contract shall be established as soon as the employing unit and employee reach unanimity about contract clauses through consultation and both sign on the contract.

Article 9 The following clauses shall be contained in a labor contract:

    (1) Production(work) assignment;

    (2) Term of a labor contract;

    (3) Labor protection and working conditions;

    (4) Labor discipline;

    (5) Labor remuneration, method and time of payment;

    (7) Social insurance and welfare;

    (8) Conditions for the termination of the a labor contract; and

    (9) Liabilities for breach of contract.

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

Article 10 The employing unit and the employee shall determine the term of the labor contract in line with one of the following methods:

(1) Being fixed term;

(2) Being non-fixed term; and

(3) Deeming the completion of a specific assignment as a term.

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

Where the employee whose domicile is Shenzhen, has worked in the same employing unit for five years or more, and whose consecutive working time has exceeded twenty-five years for male or twenty years for female, if he request the conclusion of a labor contract with non-fixed term, a contract with non-fixed term shall be concluded.

Article 11 The employing unit and the employee may specify a probation period, which shall not exceed three months in a labor contract. The probation period may be prolonged if there are special requirements for technique or business, but the probation period shall not exceed six months.

Article 12 The parties to a labor contract may stipulate in the labor contract matters concerning keeping business secrets of the employing unit.

If the employee causes economic damages of the employing unit in violation of the secret matters in a labor contract, he shall be liable for compensation for the damages of the employing unit.

Article 13 As respect to a labor contract with fixed term, if both of the employing unit and the employee agree to continue the labor relationship at the expiration of the labor contract, they shall resign a labor contract 30 days before the termination of the former labor contract according to these regulations.

   Where the employing unit continues to employ the employees without resigning a new, or refuses to render the employee to hold the labor contract after the labor contract expires, labor management department shall order it to make corrections in a limited period; if the employing unit refuses to correct, the labor department shall impose a fine of 50 yuan for each person who have not resigned a contract with.

Article 14 The following labor contracts shall be invalid:

  (1) Labor contracts violating laws and administrative regulation; and

  (2) Labor contracts concluded by means of fraud or intimidation,ect.

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

The invalidity of a labor contract shall be confirmed by a labor disputearbitration committee or a people' s court.

    Article 15 The party at fault shall be liable for compensation to the other party for the damages caused by the invalid contracts or part of the invalid clauses in a labor contract of the other party.

Article 16. Where the invalid clauses in a labor contract have been modified by the parties through consultation and sustained by the labor management department, the parties shall make performance.

Chapter ¢ó  Modification, Cancellation and Termination

of Labor Contracts

   Article 17 The parties may modify or cancel a labor contract if they have reached a consensus through consultation.

   Article 18 The employing unit may cancel the labor contract with him at any time if an employee is under any of the following circumstances:

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

(2) Having seriously violated labor discipline or the rules and regulations of the employing unit and affected working and production;

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

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

(5) Other circumstances stipulated in laws and administrative regulations.

  Article 19 The employing unit may cancel the labor contract under any of the following circumstances, however, a written notice shall be given to the employee concerned 30days in advance:

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

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

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

 If the employing unit cancels a labor contract in accordance with the preceding paragraph without notifying the employee 30 days in advance, it shall pay to the employee the mount of one month of the average wage of this year as sum of indemnity.

   Article 20 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 employees 30days in advance, solicit opinions from them and report to the administrative department of labor 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 21 Where an employing unit cancelled its labor 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 labor contracts, the trade union shall have the right to request that the matter be handled anew.

Where the employee applies for arbitration or institutes a lawsuit, the trade union shall render him support and assistance in accordance with the law.

 Article 22 Where an employee is under any of the following circumstances, the employing unit shall not cancel its labor contract with the labor by availing itself of the provisions in Article 19 and Article 20:

      (1) The employees having suffered occupational diseases or work-related injuries, and being confirmed to have capacity to work in the former unit after completion of his medical treatment by Municipal Committee on Medical Appraisal of Labor Fitness. 

(2) The employees having received medical treatment for diseases or injuries within the prescribed period of time;

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

      (4) Other circumstances stipulated by laws of administrative regulations.

   Article 23 The employing unit shall not cancel a labor contract for the change of the legal representative within duration of validity of the contract.

Article 24 If an employee is to cancel his labor contract, he shall give a written notice to the employing unit 30 days in advance.

Article 25 The employees may notify at any time the employing unit of his cancellation of the labor contract under any of the following circumstances:

(1) Within the probation period;

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

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

(4) Other circumstances stipulated in laws and regulations.

   Article 26 If the employing unit cancels a labor contract unilaterally in violation of these regulations, which results in losses to the employees, it shall compensate for the losses.

The employees shall compensate for the losses of the employing unit caused by his unilateral leave-off from his position in violation of these regulations.

      The employing unit shall bear the joint and several liability for compensation by law if it recruits an employee who has not rescinded the former contract yet, which causes economic losses to the original employing unit.

Article 27 A labor contract shall terminate by the self for any of the following circumstances:

      (1) If the employing unit is declared bankrupt in accordance with the laws;

      (2) If the employer is dissolved or revoked by law; and

      (3) If the employee dies.

Article 28 A labor contract shall terminate as soon as the term of the contract expires or the conditions of termination agreed upon by the parties arises. If a female employee is during her pregnant, puerperal, or breast-feeding period at the expiration of a labor contract, the term of the labor contract shall be extended to the end of the breast-feeding period.

Article 29 The employees have right to request the employing unit to provide certification about the items such as his working seniority, profession commodities, position, wage standard and social insurance in the unit after the cancellation or termination of the labor contract. And the employing unit shall not refuse the requestion.

Article 30 If a labor contract is cancelled under any of the following circumstance, the employing unit shall pay economic compensations to the employee:

(1)   Both of the parties reach unanimity about cancellation of a labor contract through consultation on basis of the request of the employing unit;

(2) The employing unit cancels a labor contract according to Article 19 item(1) or Article 20 item (1)of these regulations; and

     (3) A labor contract is cancelled according to Article 25 item (2), (3), (4)of these regulations.

Article 31 The calculation of the economic compensations shall based on the continuous working seniority of an employee in the same unit: the employees shall be given one month of wage per month for continuous working of one year or more; if the seniority is less than one year, it shall be deemed as one year; if it is less than half of a year, half month wage per month shall be given. The economic compensation shall not beyond twelve-month wage Where a labor contract is cancelled in accordance with Article 19 item(1)??????or Article 30 item (1) ??????of these regulations, the economic compensations shall not exceed twelve months of wage per month.

Wage-per-month mentioned in the preceding paragraph is calculated as the average wage of the three months wages before the cancellation of the contract of the employee.

Chapter ¢ô Settlement of the Labor Disputes

Article 32 If a labor dispute arises between the employing unit and an employee, it shall be handled in accordance with the national regulations on labor disputes of ernterprises.

Chapter ¢õ      Supplementary Provisions

Article 33 These regulations shall be applied to where the residents of Hong kong, Macao, Taiwan and foreign inhabitants employed in Special Zone concludes a labor contract with an employing unit.

Article 34 The detailed implementing rules are to be formulated by the Municipal Government in accordance with these regulations.

Article 35 These regulations shall take effect as of July 15,1997.

(Translated by Xu Lingling)