Contract Law and Chinese Employment Practices

This assignment delves into the complexities of contract law within the context of Chinese employment practices. Students are tasked with examining the existing legal framework governing employment contracts in China, comparing it to international standards, and analyzing its effectiveness in addressing contemporary issues such as crowdsourcing, online platforms, and corporate social responsibility. The assignment emphasizes critical thinking, research, and the application of legal principles to real-world scenarios.

International Employment
Law

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
There are many people who is having a job of some kind and fulling their needs. So,
there are many laws which have been framed in regard to rights of employees. Employment law
is legal legislation where it governs relationship between employer and workers Therefore, it
becomes critical for organisation, if they are having more than one employee, and essential for
them to apply employment law. This regulation has been driven by disputes, not by legislations.
As these involve; discrimination, privacy and workplace information access or wages and
welfares. This law includes workplace contracts, statutes, policies and common law (court law) 1.
This law also consists thousands of state and federal statutes, judicial decisions, administrative
regulations. Besides that, there are also many laws which were legislated as protective labour
legislations. In present report, two jurisdictions of USA and China is explained regarding
employment law. In this, various roles and responsibilities, rights of employees have been
discussed.
TASK
For making an employment contract, it is significant to keep employee safe, provide them
healthy environment to make sure that employers act equitably. There also very sturdy business
cases for taking responsibilities seriously, not least because, if there is a fairly-treated workforce
usually it helps in making more productive team. So, every organisation has to keep in their
mind, follow guidelines, strict towards rules which need not to complicated – can actually make
strengthen their business.
In every country, government have set their own rules and regulations regarding
employment and it is necessary for large or small organisation to follow these laws. For example,
in US authorities, parliaments and government has framed rights and duties of employees. The
1
Spalding, Andrew Brady. "The Irony of International Business Law: US Progressivism,
China’s New Laissez Faire, and Their Impact in the Developing World." (2011).
1

basic aim of labour law is to provide remedy regarding “inequality of bargaining power” among
employees and employers. The department of Labour enforces and administer more than 175
federal laws 2. These ordinances are mandates for implementing laws and through this it cover
many activities of workplace about 9 million employers and 120 million workers. Here are some
following description of laws which has been framed by government of US in regard to workers,
job seekers.
Wages and hours – Fair labour Standards Act, prescribes the standards for wages and
overtime pay. As this act is affect to both public and private employees. As this act is
administering by Wage and Hour Division. This act is applying to those enterprises who are
engage in selling or working upon materials or goods 3. But this act does not cover those
enterprises whose annual dollar is less than 50,000. In addition to this act, it covers domestic
service workers such as housekeepers, day workers, full-time staff and many more.
Workplace and safety – Occupational Safety and Health Act of 1970 is governed by
OSHA. This act defines, “person who are engaged in business affecting commerce and having an
employee, but it does not include political subdivision of state of US. Therefore, this act an
applies to those employers and employees who are belonging from different fields such as;
construction, charity, manufacturing, organised labour and so on. This act does not cover; state
and local government employees (unless and until they are approved by OSHA-state plan), self-
employed person.
Worker’s compensation – If workers are belonging from private or government
companies, then they should contract worker’s compensation programme for their benefits 4. The
office of workers’ compensation programme and department of labour does not have any role in
regard to administration or oversight these agenda.
2 Dickerson, Claire Moore. "Informal-Sector Entrepreneurs, Development and Formal
Law: A Functional Understanding of Business Law." The American Journal of
Comparative Law 59, no. 1 (2011): 179-226.
3
Bagenstos, Samuel R. "Employment Law and Social Equality." Mich. L. Rev. 112
(2013): 225.
4 Cahill, Kevin E., Michael D. Giandrea, and Joseph F. Quinn. "Bridge employment."
(2013).
2

Employee Benefit Security – Employee Retirement Income Security Act is regulated by
employers who are offering welfare or pension benefits plans to their employees. It is essential
for any employer to provide or protect health of employees from dangerous activities.
In U.S., employees are having right to dismiss from organisation for any reason or no reason at
all. Some reasons may be seeming as; “unjust” or “unfair” which gives them right to leave job
with or without giving reasons 5. If there is not contract with employees about exact time should
there, if there is no actual time for paying amount time which are to be paid for employed, then
they can dismiss employment contract “at will employee”. In U.S. employees are divided into
two categories;
1. At will employees – In this, workers or staff are fired for any reason or no reason. The
employees are having right to leave their job at any point of time without giving any
notice period to organisation.
2. Just cause employees – In this, they are getting dismissed for not executing their job
duties in appropriate manner or non-arbitrary reason which is related to violation of
policy at workplace.
Here is some limitation of “employment at will” which deals with case laws. Some
drawbacks are;
Contract – The contract has been framed by organisation with employers and in that
agreement time period of work is stating, then in this case employment cannot get dismiss until
and unless he/she completed their time duration of work.
Membership of Union – Union members are not included in 'at will employees” of
limitation. if employee is member of labour union, then are covered in collective bargaining
agreement which are negotiating between union representatives and employers.
Collective bargaining agreement is a general provision which allow employee to get
dismissal only for just in cause.
There is also some exception of “employment at will” on which employee can get relief
from rules and regulations which are framed by whether organisation or government regarding
their work.
5 Sullivan, Charles A. "Mastering the Faithless Servant: Reconciling Employment Law,
Contract Law, and Fiduciary Duty." Wis. L. Rev. (2011): 777.
3

Discrimination – It has become illegal activity, to terminate any employee on the basis of
religion, caste, national, colour or disability 6. These are important factor of anti-discrimination
of employment at will. Any organisation cannot terminate any employee on the basis of anti-
discrimination.
Public-policy exception – The exception of employee would be considered as
“wrongfully discharged”. Here are some examples of dismissal under public-policy exception; if
employee has refuse to break law under the request of employer or worker is getting fired in
regard to filling worker’s compensation claim after being injured at time of job.
There are certain policies which are developed proper standards procedures and
governing both voluntary and involuntary termination of employment by employer 7. While
adopting these policies and procedures, it will help to organisation to reduce risk if litigation by
workers. But it will help in to ensure about employer’s compliances with state and federal laws
which are related with termination of employment. Voluntary termination occurs when employee
retires or resigns. In these cases, primary concern of employer’s is to assure about that employee
is having significant information to obtain benefits for which he/she is entitled. For example,
disability, retirement benefits and many more. Sometimes, employer may force to employee to
resign from organisation rather than taking any initiative to terminate them. When employee has
been found with resignation or retirement is not voluntary then it occurs the situation of
constructive discharge. Then, in this case hostile working environment is created at workplace.
Constructive discharge is defined in state law which differs from state to state 8.
However, it is responsibility of employers that they should be aware about potential liability of
employees. Through this, they can expose employer liability for wrongful termination. Whereas
involuntary termination, this typically takes 2 forms. First, employers have to dismiss workers
from time to time while looking for their poor performance or to measure disciplinary. Secondly,
employers have to undertake lay off employees and undertake a reduction in force. In
disciplinary termination, US follow traditional doctrine i.e. “employment at will” and employers
are free to discharge worker for any cause which are not expressly prohibited by law. Reduction
6 DeMott, Deborah A. "Investing in Work: Wilkes as an Employment Law Case." W.
New Eng. L. Rev. 33 (2011): 497.
7 Hass, Douglas A. "Could the American Psychiatric Association cause you headaches?
The dangerous interaction between the DSM-5 and employment law." (2013).
8 Felstiner, Alek. "Working the crowd: employment and labor law in the crowdsourcing
industry." (2011).
4

in force, employers should cautiously discover all options before determining to implement RIF.
If there is a negative impact or potential cost, then RIF may trigger. If employer identified that
RIF is significant, then it is responsibility of employers to implement all essential steps where no
violation has been arising in employment discrimination.
Following are termination procedure which has to be follow by small and large
companies in U.S.
Resignation or retirement – Employee have to give in writing about their intention to
resign or retire which indicate the purpose of date of termination. The notice should be submitted
with the help of employee’s immediate supervisor. Employees who are resigning that are invited
to participate in exit survey which are conducted by human resource person. Following four
categories delegates about time period of notice and forward them to HR for taking further
actions.
Employee Category Period of notice by employee
Professional 5 weeks
Uniprep/foundation/English language teaching 5 weeks
Academic employees 4 months
All casual employees 1 hour
Death of employee – The information has been received by organisation about employee
has died, then HR person will calculate his/her outstanding salary and leave entitlements from
last working day.
Abandonment of employment – If employee has become failure and does not inform to
organisation with any of reason that he/she was absent for a period of more than 10 working
days, then it will be considered as abandonment of employment. For this, employee will be
deemed to resigned from organisation.
Termination due to unsatisfactory performance – In organisation, employees can be
terminated due to performing their duties unsatisfactory. If some roles and responsibilities are
given to employees and they are not performing well, then higher authority is having right to
terminate them on the basis of their performance.
Employees are having so many opportunities or remedies regarding termination of their
employment. Remedies for employment discrimination; is type of relief which depend upon
5

discrimination action which will effect on victim 9. Let’s take an example, if any employee is not
selected or got promotion for job because of discrimination, then remedy may include to pay
back amount or placement them in different sectors. It is also responsibility of employer to stop
discriminatory practices and take necessary steps so that they can prevent discrimination in
future.
Remedies may also include compensatory and punitive damage which are available to
employees. These remedies are available when there is an intentional discrimination is there
which is based on person's race, religion, caste or any genetic information. Compensatory
damages are paid out of pocket expenses which is caused on the basis of discrimination. Whereas
punitive damages are awarded to give punishment to employer who has committed a reckless or
malicious act at work place 10. Following are some compensation amount which can be recover
by employees from punitive or compensatory damages. These amounts are also varying upon
size of employer in companies.
For employers with 15-100 worker $50,000
For employers with 101-200 employees $100,000
Employers with 201-500 employees $ 200,000
More than 500 employees $ 300,000
In perspective of laws and legislations in regard to employment act, it can be said that
there are various case laws which has been framed in this context. In accordance with decided
case law of, “Pendleton v Derbyshire County Council and another (EAT)” it was held that
termination of a teacher(plaintiff) who belongs from Christian religion due to her denial to
repudiate her marriage with a convicted intimacy offender was considered as a religious
discrimination. It is considered as a most famous case of employment in aspect of USA, in which
employer has dismissed an innocent employee, who was working with some children just
because of a wrong doing of a third-party.
9 Ayres, Ian, and Alan Schwartz. "The no-reading problem in consumer contract
law." Stan. L. Rev. 66 (2014): 545.
10 Ben-Shahar, Omri, and Eric A. Posner. "The right to withdraw in contract law." The
Journal of Legal Studies 40, no. 1 (2011): 115-148.
6

Above, there is a discussion about employment law of US has been done. Now, following
description will take place of China. Here, reader will also come to know about various laws of
different countries.
Employment law in China emphasis on labour contract law which making so many
amendments and regulations. The relationship of employment is extremely important in society.
As it directly, relates functioning of business and help to organisation to run their activities in
smooth manner 11. Therefore, issues regarding negotiation procedures, protection from
discrimination, working hours, employment contract are highly important at the time of
formation of employment law. Along with this, it is essential to observed these regulations which
help in the development of economic growth.
In China, Labour Law of People's Republic of China, is effective since 1995 and Labour
Contract Law of People's Republic of China, is effective since 2008. These both laws are
providing primary sources to employees and their rights also. . However, in order to motivate
and maintain healthy business environment, then it is essential to make continuous improvement
in laws of China. The following are applicable employment laws which are mandatory for
organisation to follow guidelines.
 Employment promotion Law
 Work Safety Law
 Implementing regulation in regards to people's republic of China on employment
contract. Opinion on several questions regarding implementation of labour law.
Labour law and Labour Contract Law – This provision is related with labour regulations which
includes dispute resolutions, wages guidelines labour contracts and many more. As per provision
of article 1, this law is formulated in order to protect legitimate interest and rights of labourers,
also establishing and safeguarding labour system 12. It also helps in social progress and
promoting economic development. As is there also, supplementary law in regard to this
provision which is article 106. In this article, this provides provinces of government,
11 Serrat, Josep Maria Bech. "Quality of hotel service and consumer protection: A
European contract law approach." Tourism Management 32, no. 2 (2011): 277-287.
12 Bar-Gill, Oren, and Omri Ben-Shahar. "Regulatory techniques in consumer protection:
A critique of European consumer contract law." (2012).
7

municipalities to implement measures of labour contract and there are various regulations in
order to provide better guidance on labour law. The promulgation of law was impressive on the
part of Chinese government which also cater in market economy. However, these regulations
contain many issues such lack of effective and efficient enforcement at local level, lack of
knowledge, which results in abuses of employment rights. Therefore, employment concern
which includes overtime of workload without giving any extra payment, unsafe of working
conditions which can also contribute in high level of labour unrest in China.
Article 14, employee proposes or agrees to conclude about labour law 13. There are
following circumstances which is concluded from fixed-term of labour contract.
 The employees have to worked for employers for 10 full consecutive years.
 The employee has worked for 10 full successive years and attained the age which is less
than 10 years up to statutory requirements age.
 It is mandatory to renewed labour contract after every two fixed-term and employee does
not required to apply these law under any circumstances which are covered under article
39 (1) and (2), this article states that employer may dissolve labour contract where
employee does not meet the recruitment conditions during their probation period 14. The
employees have also violated any rules and procedures of employer. Whereas, in article
40, it is related with provision for circumstances in which employer may dissolve labour
contract before giving a 30 days’ notice period. But, if employer fails to sign labour
contract in written from the date when their work has been beginning or after lapse of one
full year, then it shall be deemed as there is a labour contract between employer and
employees without fixing any time period.
Under labour law of China, terminating of employee will take place when they have
completed their probation period. While terminating any employees are required some good
cause or severance payment. As it is important for employer of China to show that their
termination is based on unilateral statutory grounds 15. Labour contract of China, permits to
13 Noronha, Carlos, and et. al., "Corporate social responsibility reporting in China: An
overview and comparison with major trends." Corporate Social Responsibility and
Environmental Management 20, no. 1 (2013): 29-42.
14 Vogenauer, Stefan. "Regulatory competition through choice of contract law and choice
of forum in Europe: Theory and evidence." Eur. Rev. Private L. 21 (2013): 13.
15 Zhu, Ying, Malcolm Warner, and Tongqing Feng. "Employment relations “with
Chinese characteristics”: The role of trade unions in China." International Labour
Review 150, no. 1‐2 (2011): 127-143.
8

employer to unilaterally terminate labour contract without giving any economic compensation or
notice under any of the one following circumstances:
 Employee have breached the rules and regulations which are made by employers.
 Employee is not satisfying with the conditions which are made at the time of employment
during probation period.
 Workers or staff has committed any serious dereliction in regard to perform their duty
and which is causing substantial damage to employer.
 If employee is having an employment relationship with another employer which impact
upon on their tasks and after that, he or she refuses to terminate such employment
relationship with another.
 The employee is taking advantage of employer’s pitfalls or using coercion which is
causing an act for employer to make amendment in labour contract.
 Criminal liability has been imposed against employees.
Employment law provides economic compensation for regulating all those rules and
regulations which are framed by government of China 16. These compensations must be paid by
employee under following circumstances.
1. Employee has dissolve labour contract in regard to article 38.
2. If worker or staff proposes to dissolve labour contract and reaches an agreement of
dissolution of employee with the help of negotiations.
3. The employer has dissolve this act in accordance with article 41.
4. As per article 44 (iv), labour contract has been terminated which states that, employee
can terminate bond if employer is declared as bankrupt, and (v), contract may also
terminate, if business license has been revoked in order to close down their business.
5. Any circumstances which has been prescribed by other administration regulation or laws.
Below mentioned circumstances, employer may terminate employee. But it is essential
for worker or staff either to give written notice of 30 days or pay additional economic
compensation which is equal to the one month of employee salary:
 Employee is insane or incapable in performing their job.
16 Sullivan, Charles A. "Mastering the Faithless Servant: Reconciling Employment Law,
Contract Law, and Fiduciary Duty." Wis. L. Rev. (2011): 777.
9

 The employee had become injured or ill at the time of doing their work, and for this
he/she is not able to hold their original position on regular basis and upon this medical
treatment has been prescribed.
 If there is major change in objectives which is relied upon the signing of labour contract,
which also hinders in fulfilment of original contract.
If China employees are wrongfully terminated, then they have right to demand for
reinstatement of their position and required to give job back 17. Besides this, if employee does not
want to continue working with employer or performing their roles and responsibilities according
to labour law, then it is essential for employers to pay damages which is equal to double of
economic compensation. These above acts are different from U.S. employment law system.
There are two type of employee terminations in China i.e. termination upon expiration
and early termination. In early termination, there is no concept about “at will” which exist in
other countries. In these cases, employers may dismiss employees in accordance with certain
circumstances which are covered in stipulated laws and regulations. Otherwise, termination will
be considered as deemed unlawful. But in termination upon expiration, there are two cases which
are included in this, first fixed-term employment contract. In this employer does not have any
right to renew contract upon expiration 18. However, employer have to pay economic
compensation. But according to Chinese labour law, expiration of second fixed-term contract,
employee have to made a request on open-ended employment contract and they do not have any
other option to admit such appeal. However, these laws are not uniformly applied in several
cities. This becomes choice of employer to refuse to renew the contract after expiration of fixed-
term.
On other hand, in China, there is a case law of Dezan Shira&Associates, Shanghai,
manager of cited firm is fired during at the time of duration of employment. He was convicted as
offence and engaged in conflicts of interests within organisation without giving any prior notice.
This can also be considered as serious violations which has been done by manager.
17 Smits, Jan M., ed. Contract law: a comparative introduction. Edward Elgar Publishing,
2017.
18 Stockmann, Daniela, and Mary E. Gallagher. "Remote control: How the media sustain
authoritarian rule in China." Comparative Political Studies 44, no. 4 (2011): 436-467.
10

CONCLUSION
From the above report, it can be concluded that each and every country in this world has
its own acts and legislations in regard to employment act. In this report, employment laws have
been formed in context of China and US has been discussed. Along with this evaluation of these
laws in regard to different countries has been done which give power to employees to fight for
their rights. Further, remedies are also available to employees when termination takes place. If
termination takes place, then it is responsibility of both employer and employees to follow all
guidelines which has been framed by government.
REFERENCES
Books and journals
Ayres, Ian, and Alan Schwartz. "The no-reading problem in consumer contract law." Stan. L.
Rev. 66 (2014): 545.
Bagenstos, Samuel R. "Employment Law and Social Equality." Mich. L. Rev. 112 (2013): 225.
Bar-Gill, Oren, and Omri Ben-Shahar. "Regulatory techniques in consumer protection: A
critique of European consumer contract law." (2012).
Ben-Shahar, Omri, and Eric A. Posner. "The right to withdraw in contract law." The Journal of
Legal Studies 40, no. 1 (2011): 115-148.
Cahill, Kevin E., Michael D. Giandrea, and Joseph F. Quinn. "Bridge employment." (2013).
11

DeMott, Deborah A. "Investing in Work: Wilkes as an Employment Law Case." W. New Eng. L.
Rev. 33 (2011): 497.
Dickerson, Claire Moore. "Informal-Sector Entrepreneurs, Development and Formal Law: A
Functional Understanding of Business Law." The American Journal of Comparative
Law 59, no. 1 (2011): 179-226.
Felstiner, Alek. "Working the crowd: employment and labor law in the crowdsourcing industry."
(2011).
Hass, Douglas A. "Could the American Psychiatric Association cause you headaches? The
dangerous interaction between the DSM-5 and employment law." (2013).
Noronha, Carlos, and et. al., "Corporate social responsibility reporting in China: An overview
and comparison with major trends." Corporate Social Responsibility and Environmental
Management 20, no. 1 (2013): 29-42.
Serrat, Josep Maria Bech. "Quality of hotel service and consumer protection: A European
contract law approach." Tourism Management 32, no. 2 (2011): 277-287.
Smits, Jan M., ed. Contract law: a comparative introduction. Edward Elgar Publishing, 2017.
Spalding, Andrew Brady. "The Irony of International Business Law: US Progressivism, China’s
New Laissez Faire, and Their Impact in the Developing World." (2011).
Stockmann, Daniela, and Mary E. Gallagher. "Remote control: How the media sustain
authoritarian rule in China." Comparative Political Studies 44, no. 4 (2011): 436-467.
Sullivan, Charles A. "Mastering the Faithless Servant: Reconciling Employment Law, Contract
Law, and Fiduciary Duty." Wis. L. Rev. (2011): 777.
Sullivan, Charles A. "Mastering the Faithless Servant: Reconciling Employment Law, Contract
Law, and Fiduciary Duty." Wis. L. Rev. (2011): 777.
Vogenauer, Stefan. "Regulatory competition through choice of contract law and choice of forum
in Europe: Theory and evidence." Eur. Rev. Private L. 21 (2013): 13.
Zhu, Ying, Malcolm Warner, and Tongqing Feng. "Employment relations “with Chinese
characteristics”: The role of trade unions in China." International Labour Review 150,
no. 1‐2 (2011): 127-143.
Online
China Employment Law. 2017. [Online]. Available through: <https://www.hg.org/article.asp?
id=38188>. [Accessed on 3rd July 2017].
Terminating China Employees: The Basics. 2017. [Online]. Available through:
<http://www.chinalawblog.com/2015/04/terminating-china-employees-the-basics.html>.
[Accessed on 3rd July 2017].
Termination. 2012. [Online]. Available through:
<https://www.dol.gov/general/topic/termination>. [Accessed on 3rd July 2017].
12