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Every employee need agree with this labor record handbook when he signs up labor contract with company. Company should provide labor record handbook to every new staff when he starts working at company. And every employee needs to sing up include name and date when he received handbook. Company, therefore, owns legal proof when labor dispute happens with employee,30 moreover labor record handbook is necessary for company.
5.What should be carefully considered when employment contract ends?
Ending of labor contract is very complex and causes more labor disputes to happen. According to PRC law, government owns right of censorship to company about ending of labor contract. So companies can not fire employees without reason, which is different with western employment practice.31 Ending of labor employment is very difficult to JV or WFOE, in other words, manger should think about ending labor contract when labor contract is signing with employees. However, companies needs to consider following condition.
Firstly, companies who want to end labor contract must write notice to employee one month before and must hold enough cause and gist. Companies may immediately end labor contract with employees violating PRC law or failing within probation period of working.32 Any other cause of ending labor contract must write notice to employee one month before but companies need to justify the reasons, for instance, employee cannot work because he was sick.33 If companies have to fire staff for reducing the cost of business operation, they need to explain to all staff and to trade union and listen to their advice.34 Further, they have to report ending of labor contract to Labor Administration.35
According to PRC regulation of labor contract, companies can fire employees 30 days in advance. But if companies do not hold full cause and gist, they will take the legal consequences of losing a lawsuit.36 Companies have to always remember to keep every employee’s working record and labor record handbook.
Secondly, labor law requires compensation of ending contract must be shown on labor contract. Companies need to regulate some specific conditions of ending labor contract under PRC law for preventing labor dispute. Company should compensate to employee when labor contract is terminated, otherwise no legal permission is granted. Normally compensation standard is one-month salary when he has been working for a year.37
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