In 2008, three laws regulating the labour market of the PRC came into force: The PRC Employment Contract Law, effective from January 1 2008, the PRC Law on the Mediation and Arbitration of Employment Disputes, effective from May 1 2008 and the PRC Employment Promotion Law, effective from January 1 2008. This triad of laws, together with the PRC Labour Law of 1995, forms the statutory basis of Chinese Labour Law as a whole.

PRC EMPLOYMENT CONTRACT LAW (ECL)

The centerpiece of the revised labour laws is the PRC Employment Contract Law [ECL]. Due to the vital significance of the ECL in practice, there already have been numerous articles providing an overview of the ECL.1 As such, this article will concentrate on analyzing selected critical provisions of the ECL and their implementation in practice.

Scope of Application

The ECL governs the establishment of contractual relationships between employers and their employees and all aspects in relation to such contracts such as their performance, amendment, cancellation and termination. Under the ECL, the term “employer” refers to all entities that intend to hire workers within the territory of the PRC, enclosing for example enterprises, individual economic organizations and private non-enterprise entities, as well as state authorities, public institutions and social groups.2 Accordingly, the scope of the ECL also covers nonlegal person entities and foreign entities, as long as they hire workers within the territory of the PRC.3 Unfortunately, the ECL fails to lay down the requirements of a contractual employment relationship, which leads to a temporary legal uncertainty concerning its application.4 According to the transitional provisions of the ECL, employment contracts, having been effective before January 1 2008 and continuing to exist after the commencement of the ECL, remain unchanged.