Document No (4) 2004
Issued by Division of Labour Relations Shanghai Municipal Labour & Social Security Bureau on January 5th, 2004
To all District and County Labour & Social Security Bureaus, all Enterprises¡¯ Administration Departments, the Holding (Groups) Corporations:
In order to better implement Labour Contract Regulations of Shanghai Municipality (hereinafter referred to as the Regulations), certain issues in implementation of the Regulations are notified as the followings,
I. The Issues Concerning Non-Fixed-Term Labour Contract
1. In case an employee has been working with one employing unit for more than ten consecutive years, and both parties involved agree to renew the labour contract upon its expiration, the labour contract shall be handled as per the followings stipulations:
(1) If the employee concerned requests to sign a non-fixed-term labour contract, the employing unit shall conclude the contract with him/her;
(2) If the two parties involved reach an agreement to conclude a fixed-term contract through consultations and negotiations, the contract shall be valid;
(3) If the fixed-term labour contract is proved to be concluded by deceiving and intimidating the concerned employee, the articles and terms defined in the contract on its duration shall be invalid. If the employee requests to conclude a non-fixed-term contract, the employing unit shall conclude the contract with him/her.
2. In case an employee working with one employing unit for more than ten consecutive years requests to change his/her contract being implemented to non-fixed-term labour contract before the expiration of the contract, while the two parties concerned do not reach an agreement through consultations and negotiations, the original contract shall continue to be implemented.
3. In case a written labour contract is required to be established but yet concluded, the employing unit has not terminated the labour relationship as per Article 40 of the Regulations with the employee, who has over ten consecutive years of service with the employing unit and still maintains the labour relationship, if the employee requests to conclude a non-fixed-term labour contract with the employing unit, the employing unit shall conclude the contract with him/her.
II. The Labour Relationship Issues Concerning Corporate transformation, Ownership Restructuring or Assets Reorganization£¬etc.
In case the employing units are undergoing corporate transformation, ownership restructuring or assets reorganization etc, the labour contracts may be carried out by the succeeding employing units as per Article 24 of the Regulations; the labour contracts may be modified or revoked upon agreement by the parties concerned; if other agreements have been reached by the parties involved, the other agreements shall prevail.
III. The Issues Concerning that the Agreed Compulsory Service Period Is Longer Than the Duration of the Labour Contract
The compulsory service period is a period of time, for which an employee is required to work for the employing unit because of certain special benefits he/she has received from the employing unit.
In light of Article 14 of the Regulations, the labour contract may be terminated, and the employing unit shall not ask for compensation for the compulsory service period from the employee, if the agreed compulsory service period is longer than the duration of the labour contract, and the employing unit gives up the request for the remaining compulsory service period. The two parties involved shall renew the labour contract upon its expiration, if the employing unit continues to provide the job for the employee and request the employee to fulfil his remaining compulsory service. In case the two parties involved can not reach an agreement on renewal of the labour contract, they shall continue to carry out the articles and terms defined in the original labour contract. During the period that the employee continue to fulfil his remaining compulsory service years, if the employing unit does not provide any job to the employee, the employing unit shall be regarded to give up the request for the remaining service years of the employee, and the labour relationship shall be terminated.
IV. The Issues Concerning Non-Competition Agreement and the Economic Compensation
1. The employing unit and the employee, who is obligated to keep the commercial secrets of the employing unit, shall follow the provisions in the Non-Competition agreement on the standard and means of payment of the economic compensation. If the employing unit does not pay economic compensation as per the Non-Competition agreement, and still refuse to make payment after being requested by the employee, the employee may revoke the Non-Competition agreement.
2. In case the standard and means of payment of the economic compensation have not been agreed in the non-competition agreement, the employee may request the employing unit of an economic compensation. The disputes arise thereby between the two parties may be settled through the procedures of labour dispute settlement. In case the employing unit requests the employee continuing to fulfill the non-competition agreement, a lump sum economic compensation shall be paid to the employee by the employing unit according to the non-competition duration agreed by both parties at a standard confirmed by the labour dispute settlement departments, the employee thereafter shall continue to carry out the non-competition obligations; in case the employing unit gives up the request for the remaining non-competition period, an economic compensation for completing part of the non-competition period shall be paid by the employing unit at a standard confirmed by the labour dispute settlement departments.
3. Before/during the term that the non-competition agreement comes into effect, in case the employing unit gives up the request for the non-competition obligations by the employee, the employee concerned shall be informed one month in advance.
V. The Issues Concerning Compensation for Delayed Processing of Employment Termination Procedures
1. In case the labour relationship has been terminated or expired, and the employing unit has not produced valid proof for termination or expiration of the labour relationship, or failed to handle the employment termination procedures in time pursuant to the Regulations, which has caused the employee¡¯s loss because of delay of unemployment registration, the employing unit shall pay a compensation to the employee as per the regulations of unemployment insurance benefits. If other actual loss has been caused, the employing unit shall make the compensation as per the employee¡¯s request, but shall not bear the compulsory responsibility to compensate the unemployment insurance benefits.
2. In case it is due to the reasons of the employee that the employing unit could not complete the employment termination procedure in time, the loss caused shall be borne by the employee.
VI. The Issues Concerning the Employing Unit Unilaterally Revoking the Labour Contract and Failing to Keep the Trade Union Informed
In case the employing unit, under which a trade union has been established, is to unilaterally revoke the labour contract with the employee, it shall notify the trade union of the reasons in advance as per Article 36 of the Regulations. If disputes arise because the employing unit does not keep the trade union informed in advance, the employing unit shall make corrections in the course of labour disputes settlement.
