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Foreign Company Hiring in China

A new Labour Contract Law came into effect on January 1, 2008, that regulates both the legal relationships between domestic companies and their employees and foreign companies and their Chinese employees.

Foreign companies in China can be classified into three categories: Chinese-Foreign Equity Joint Ventures, Chinese-Foreign Contractual Joint Ventures, Exclusively Foreign-Owned Companies or the branches or representative offices of foreign companies. According to the categories, the current laws and legal regulations have many specifications concerning a foreign company’s hiring of local employees.

1.    Foreign companies registered on the Chinese mainland can employ labourers directly and shall timely make the legal contracts in accordance with the Labour Contract Law.

Chinese-Foreign Equity Joint Ventures, Chinese-Foreign Contractual Joint Ventures, and Exclusively Foreign-Owned Companies registered on the Chinese mainland are already legal entities in China; therefore, they may directly employ Chinese labourers and shall strictly comply with the labour law and regulations in China. Foreign companies are bound by the new Labour Contract Law and should strictly comply with it.

Some legal issues matters merit attention when making legal contracts are made:

(1). A labour contract shall be timely made between foreign companies and their labourers:

Labour contracts shall be made within one month after employment; if a labour contract is not timely made, foreign companies shall pay double-month salaries to the affected employees, and the labour contract shall be regarded as flexible-term labour contract, which will have very adverse effects on the company.

(2). A probation period shall not be randomly assigned:

A probationary period can only be made once and shall be calculated as the labour contract term. The length of probation period is decided by the labour contract term: (a) the probation period shall not exceed one month if the labour contract term is less than one year but longer than three months; (b) the probation period shall not exceed two months if the labour contract term is shorter than three years but longer than one year;(c) the probation period shall not exceed six months if the labour contract term (a fixed term contract or flexible term contract) is longer than three years; (d) there shall be no probationary period if the labour contract term is no more than three months, or the legal contract is just made for finishing some particular work.

(3) Compensation for breach of contract:

Compensation shall be paid by employees under only two circumstances: (a) the employees breaches the terms in the labour contracts and leaves the company within the labour contract period; the compensation shall not exceed the training fee that the employees have not paid; (b) the employees leave the company and go to other companies that compete in the same industry.

2.    The representative offices of the foreign companies shall not employ Chinese labourers directly. The rules on labour dispatching in the Labour Contract Law shall be followed:

In accordance with relevant Chinese laws and regulations, the representative offices of foreign companies are not legal entities and not qualified to employ Chinese labourers, and employment can only be realized by completing a labour dispatching contract with the labour service agencies. The labour dispatching contract specifies labour services and labour management obligations between representative offices and labour service agencies. The Chinese employees simply make labour contracts with the labour service agencies even if they work for the representative offices of foreign companies.

The Regulations of Beijing on Administrations of Hiring of Chinese Employees by Foreign-Funded Companies also specifies that foreign representative offices shall recruit labourers only through labour service agencies, and that Chinese labourers shall apply for jobs in foreign representative offices only through labour service agencies. Any recruitment by foreign representative offices or applications by Chinese labours shall not be done on their own or via any other individuals or companies.

For the labour dispatching issues of foreign representative offices, the amended labour contract law also specifies obligations on the part of the foreign representative offices in China. They shall provide good working conditions, labour protection, and necessary training to labourers. The relevant welfare, rewards, commissions, overtime charges shall be paid as stated in the law. Wages shall be increased if labourers are employed for long time. Representative offices shall not dispatch labourers to other companies.

Wang Jihong , Lawyer

Professional fields: Urban Infrastructure

Development and

Real Estate

Environmental and Resource Protection

Government

Legal Affairs

Ms. Wang is a renowned lawyer in the field of urban infrastructure development in China. She has offered legal services to a number of national major construction projects, especially concession projects. These projects cover multiple fields, including public utilities construction projects, rail transportation projects, highway and bridge projects, energy projects and city planning projects such as CCTV New Site, The National Museum of China and the National Indoor Stadium.

Tel: +86 10 8225 5610  

E-mail: jwbj@vtlaw.cn

在华外资企业

招聘中国雇员应注意的法律问题

一、在华注册成立的外资企业可直接聘用中国雇员，并依据《劳动合同法》的规定及时与中国雇员签订书面劳动合同。

在中国境内注册成立的中外合资经营企业、中外合作经营企业、外商独资企业，因其在法律身份上已是中国法人，为中国企业，可以直接在华聘用中国雇员，并遵守中国的劳动法律制度。目前，作为中国劳动合同法律制度里程碑的《劳动合同法》已开始实施，在华注册成立的外资企业应严格按照其中的相关规定，履行自己的义务，及时与中国雇员订立劳动合同。

各外资企业在订立劳动合同的过程中，需要重视以下几个方面：

（一）劳动合同需及时订立。

劳动合同需在用工后的一个月内采用书面形式订立，如未及时订立，用人单位将面临支付双倍工资甚至被视为已订立无固定期限劳动合同的不利局面。

（二）在劳动合同中不可随意约定试用期。

试用期只可约定一次，且试用期包含在劳动合同期限内。劳动合同期限三个月以上不满一年的，试用期不得超过一个月；劳动合同期限一年以上不满三年的，试用期不得超过二个月；三年以上固定期限和无固定期限的劳动合同，试用期不得超过六个月；以完成一定工作任务为期限的劳动合同或者劳动合同期限不满三个月的，不得约定试用期。

（三）不可随意约定违约金条款。

只有违反服务期约定和竞业限制约定两种情形可以约定雇员承担的违约金，且违反服务期约定的违约金不得超过未履行部分应分摊的培训费用。

二、外国企业驻华代表机构不可直接聘用中国雇员，需遵守《劳动合同法》关于劳务派遣的相关规定。

根据中国有关法规规定，外国企业驻华代表机构不具有中国法人资格，不能自行招聘中国雇员，其招聘手续必须经由中国政府有关部门批准的向外国企业驻华代表机构提供中国雇员的外事服务单位（以下简称外事服务单位）办理，通过劳务派遣的方式，中国雇员与外事服务单位签订劳动合同，产生法律上的劳动关系；外事服务单位与外国企业代表处签订劳务派遣合同，确立劳动服务及代理人事管理关系；中国雇员与外国企业驻华代表机构建立实际用工关系。

比如，《北京市关于外企聘用中国雇员规定》中规定，外国企业驻华代表机构招聘中国雇员，必须委托外事服务单位办理，不得私自或者委托其他单位、个人招聘中国雇员。中国公民必须通过外事服务单位向外国企业驻华代表机构求职应聘，不得私自或者通过其他单位、个人到外国企业驻华代表机构求职应聘。

而作为实际用工单位的外国企业驻华代表机构，《劳动合同法》也对其在实际用工过程中对中国雇员（即被派遣劳动者）应履行的义务进行了规定，包括用工单位应当提供相应的劳动条件和劳动保护；依法支付加班费、绩效奖金，提供与工作岗位相关的福利待遇；进行工作岗位所必需的培训；连续用工的，实行正常的工资调整机制；不得将劳动者再派遣到其他用人单位等。