Navigating the New Employment Contract Law

By K. Lesli Ligorner and Monica Lynn Debiak of Paul, Hastings, Janofsky & Walker

In trying to standardize and refine China's employment law system, the PRC Employment Contract Law (中华人民共和国劳动合同法)(the Law) promotes three goals, which provide the rationale for many of the law's new provisions. First, the Law seeks to increase the length of employment relationships by building in biases against shorter-term employment contracts. Second, the Law aims to increase the presence and involvement of trade unions in the workplace by requiring employers to consult with the trade union regarding a broader spectrum of issues. Finally, the Law endeavors to increase the power of the individual employee vis-à-vis the employer, by granting employees greater rights.

The Law incorporates many new legal provisions, as well as some already existing requirements from the PRC Labour Law(中华人民共和国劳动法).² Also, the Law adopts many provisions from various local employment regulations. As the Law leaves many details for enforcement and practice undefined, local authorities will likely continue implementing local regulations to clarify the Law. This article considers some of the key provisions in the Law.