Dismissal of Employees in China

Dismissal of Employees in China

Updated on Tuesday 31st January 2023

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Dismissal-of-Employees-in-China.jpgThe dismissal of employees in China is not a simple task for the employer. The business owner must pay attention to the regulations on the termination of employment contracts in order to avoid any potential labor disputes. The termination of an employment contract in China can happen as a result of its expiration or it can be an early termination - only in accordance with the legal provisions that allow for this type of ending for an employment contract. Foreign investors in China should understand the laws and regulations that govern employment throughout the territory. Our Chinese lawyers can help you know more about the matters that an employer needs to consider in order to terminate an employment agreement.

Grounds for employment termination in China

There are a few cases in China when an employee can be dismissed without the 30 days’ notice period and without severance payment. These are:
- if the employee does not observe the conditions of employment during the probation period;
- if the employee seriously breaches the company’s rules;
- if the employee commits a serious act that results in an important harm to the company’s interest;
- if the employee is being judged for a criminal offense;
- if the employee is already employed by another company and this affects its current position;
- if the employee deceives the employer to conclude an employment contract, contrary to the employer’s true intent.
Except for the aforementioned situations, the employee is entitled to receive a 30 days’ notice if he or she becomes physically incapable to sustain the work or if the performance of the employment contract becomes impossible. Special categories of employees, like pregnant women, cannot be dismissed at will by an employer. Our Chinese attorneys can give you more information about restrictions to dismissal in China.

Severance compensation in China

Chinese employees are entitled to severance payments when the employer unilaterally terminates the agreement (except for probationary periods) after both parties agree upon the termination suggested by the employer or when the employee resigns because of employer abuse. Usually, the amount payable by the employer is one average month’s wages for each year of service. Employment disputes in China can be solved through mediation, arbitration or court proceedings. If you need help dealing with legal issues in China, our law firm provides legal services. You should also know that our lawyers can offer you comprehensive assistance to apply for residency in China. You are qualified to submit an application for permanent residence following Article 11 of the regulations if you: have significantly improved science and technology, education, health, culture, or any other important sector in China; or you live in China and have aided in the creation of the country's welfare state.
We have prepared a video about the dismissal of employees in China and we invite you to watch: 

You can contact our Chinese law firm for more information about the employment termination in China.  If you are planning to apply for citizenship in China, the services of our lawyers are at your disposal. But before applying for citizenship status here, you should know that dual nationality is not recognized in China for Chinese nationals. A Chinese person who obtains foreign citizenship of his own volition forfeits his Chinese citizenship under Articles 3 and 9 of the PRC Nationality Law.