Is it that easy to separate from an employee in China?

It is often (wrongly) thought that employers in China have free hands to separate from an employee without justification of any particular reason or procedure.

The reality:

  • Chinese law on dismissal is very largely inspired by the European continental model: any dismissal must be motivated by a real and serious cause provided for by law (serious misconduct, incompetence, loss of job…)
  • In the event of a dispute, it is up to the employer to prove the existence of such a cause.
  • In the absence of a real and serious cause, the employee is entitled to request financial compensation or even reintegration into the company.

What to remember:

  • Employees in China are protected against dismissal.
  • Employer/employee dismissal disputes are very frequent, especially in large cities and with foreign employers.
  • Competent courts often tend to protect the employee and push the employer to find an amicable solution.
  • The priority in the event of a dispute is to avoid the employee’s reinstatement. This objective can be achieved by demonstrating to the competent court that reinstatement would be detrimental to the interests of the company.

 

About Ashley Mao

Ashley is a legal counsel with over 10 years of legal experience at top US law firms.
She assists clients on incorporation, administration procedures, obtention of sectorial licenses, and tax-related matters.
Ashley uses her strong experience to deal with the relevant administrations in order to help clients from simple to the most complex incorporation and reorganization cases.