Page 100 - DMGT516_LABOUR_LEGISLATIONS

Unit 4: Contract Labour (Regulation and Abolition) Act, 1986

Trade Union Notes

The trade union in the foreign invested enterprise may represent staff and workers in the
negotiation with the enterprise on terms of payments, working time, off-days and holidays,
insurance and welfare, working protection, etc., and conclude the collective contract according
to the laws. Prior to establishment of the trade union, it is representatives chosen by staff and
workers.

Termination of Service

Articles 13, 14 and 18 lay down conditions under which an employee can be terminated.
According to article 13, “the foreign invested enterprise may dissolve the labour contract and fi re
its employees upon one of the following circumstances:

1. When the employee is proved unqualified during the probation period;
2. When the employee, due to sickness or non-working related injury, is unable, either to
continue the work or to take other posts reassigned by the enterprise after a designated
medical care period;
3. When the employee is in serious violation of labour disciplines or of relevant regulations
of the enterprise;
4. When the employee seriously neglects his/her duty or is engaged in malpractice for
self-ends, thus causing huge losses of the enterprise’s interests;

5. When the employee is incompetent for doing the job and after training or change of the
post is yet incompetent for doing it;
6. When the particular circumstances under which the labour contract is concluded undergoes
great changes, so that the labour contract can no longer be implemented, and the concerned
parties cannot reach an agreement to change, the contents of the labour contract;

7. When there are other particular terms defined in the labour contract.

Article 14 says that the labour contract is automatically dissolved upon one of the following
circumstances:

1. When the employee is charged with a criminal suit, enforced to labour reform or sentenced
to prison;
2. When the foreign invested enterprise is dissolved or terminated.

Article 18 says that “the Chinese employee, when dismissed by the foreign invested enterprise
according to Items 2, 5, 6, 7 of Article 13, or automatically dissolve the labour contract according
to items 2 of Article 14, or resign according to Items 2, 3 of article 16, shall get economic
compensation from the enterprise in the light of the employee’s service length in the enterprise.
Those whose service length is less than one year shall get economic compensation equivalent
to their half a month’s actual salary; those who service length is more than one year shall get
economic compensation equivalent to their one month’s actual salary for each working year, but
the maximum shall not exceed twelve months’ actual salary.”

Termination of Labour Contract

Article 15 talks of codes under which the Labour contract cannot be dissolved. The foreign
invested enterprise shall neither terminate nor dissolve the labour contract nor dismiss its
employees upon one of the following circumstances:

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