LMI[1994] No. 447 issued by the Ministry of Labor on November 14, 1994

Article 1　These Provisions are formulated according to the relevant provisions of the Labor Law of the People’s Republic of China with a View to directing employing units to correctly exercise the power to reduce their personnel in accordance with the law.

Article 2　An employing unit may make reduction of its personnel when it comes to the brink of bankruptcy and is declared by a people’s court to enter into the period of statutory consolidation, or runs deep into difficulties in production and management, and is up to the standards for enterprises in grave difficulties set by local governments , and if its personnel reduction becomes really required.

Article 3　An employing unit shall , if condition is permitted, provide its reduced personnel with the assistance’s to vocational training or employment.

Article 4　If its personnel reduction becomes really required, an employing unit shall conduct it according to the following procedures:
(1) to explain the situation to the trade union or all of its staff and workers 30 days in advance, and provide the data concerning its production and management;
(2) to put forward a plan of personnel reduction which shall contain the name list of the reduced personnel, time of reduction, implementing measures and the measures to make economic compensations for the reduced personnel in accordance with the provisions of laws and regulations and with the agreement made in the collective contract;
(3) to solicit opinions about the plan of personnel reduction from the trade union or all of its staff and workers, and to make amendment and improvement to the plan;
(4) to report the plan of personnel reduction and opinions of the trade union or all of its staff and workers to local labor administrative departments, and listen to the opinions from labor administrative departments; and
(5) to make public the plan of personnel reduction, deal with the formalities of revoking labor contracts with the reduced personnel, pay economic compensations to the reduced personnel according to relevant provisions and produce certificates of personnel reduction.

Article 5　An employing unit shall not reduce the following personnel:
(1) to be confirmed to have totally or partially lost the ability to work due to occupational diseases or occupational injuries suffered at work;
(2) to be receiving medical treatment for diseases or injuries within the prescribed period of time;
(3) to be a female staff member or worker during pregnant, puerperal or breast-feeding period; or
(4) other circumstances stipulated by laws, administrative rules and regulations.

Article 6　If the personnel who are unemployed due to reduction participate unemployment insurance, they may register with local job-service agencies and apply for unemployment relief money;.

Article 7　Where an employing unit is to make new recruitment within six months from the date of its personnel reduction, the reduced personnel shall have the priority to be re-employed and the number, time and requirements of the recruitment, as well as the situation of giving priority to the reduced personnel in recruitment shall be reported to local labour administrative departments.

Article 8　Where an employing unit reduces its personnel in violation of laws, regulations and other relevant provisions, labor administrative departments shall order it to stop the reduction and to make corrections according to law.

Article 9　An employing unit shall seriously listen to the reasonable opinions on personnel reduction from the trade union or its staff and workers.
Where an employing unit reduces its personnel in violation of the stipulations of laws and regulations or the agreement in the collective contract, the trade union shall have the power to request for reconsideration.

Article 10　If a labor dispute takes place due to the reduction of personnel , the two parties concerned shall handle it in accordance with relevant provisions on the settlement of the labour dispute.

Article 11　Labour administrative departments of provinces, autonomous regions and municipalities directly under the Central Government may work out the measures for the implementation according to these Provisions and in the light of local actual circumstances.

Article 12　These Provisions shall be implemented as of January 1, 1995.