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How does are effectively deal with specific legal issues of employment challenges all foreign companies hiring and managing Chinese staff? In this essay, I am going to describe following parts: i) What are related laws needed to follow for foreign companies in China? ii) What should be cared before signing the employment contract? iii) What should be considered while employment contract is forming? iv) What should be cared when employment contract ends?
2. Key issues – Before employment contract is formed
Both Chinese or foreign companies must comply with current legal system as long as established in PRC. However, the Chinese legal system tends to be quite different from western legal systems. When they are willing to doing business in China, foreign managers have to adapt with Chinese law regulating both rights and responsibilities of employers and employees and government efforts to grant national-treatment policy to foreign investors. China, nevertheless, is carrying out communism system characterized by the centralization of administrative power, so legal system services with government-orientatation led by Communist Party.
Hierarchally, five aspects are involved:
i) Laws, made by National Congress of people, such as Labor Law, Trade Union Law. ii) Regulations, made by State Council, such as Regulations on the Placement of Surplus Staff and Workers of State-owned Enterprises. iii) Regulations, by city council or municipality, such as Regulations of Shanghai Municipality on the Flow of Talented Personnel. iv) Regulations, Made by national departments, such as Notice Regarding Further Improvement of the Work of Poverty Relief and the Re-employment of Workers. v) notices or decisions, made by local departments。
Further, with respect to content, legal relationship between company and employees entails rights and obligations, including labor management, Trade Union, family planning, individual income tax, human resource.
Moreover, regarding the process of employment, three aspects are involved: firstly, establishing the employment relationship. Secondly, employment contract comes into force, including forming, modifying and so forth. Thirdly, the ending of employment relationship.4
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