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alwkeel
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Begginer
Asked: 2025-05-08T21:44:47+08:00 In:

Are there any restrictions on terminating an employment contract in China? What's the notice period?

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Are there any restrictions on terminating an employment contract in China? What’s the notice period?
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    1. ROSE HAND
      Begginer
      In China, the termination of employment contracts is governed by the Labor Contract Law and relevant local regulations, which specify restrictions, notice period requirements, and compensation rules. Below is a structured overview based on the latest legal provisions:

      1. Restrictions on Termination

      Employers are prohibited from terminating contracts in the following situations, except when employees commit serious misconduct as defined in the Labor Contract Law:

      Health and Safety Protections

      • Employees undergoing occupational health examinations, especially those in hazardous work environments, or under diagnosis/observation for suspected occupational diseases.
      • Workers with work-related injuries or illnesses that have resulted in partial or full loss of labor capacity.
      • Employees within the statutory medical treatment period for non-work-related illnesses or injuries.

      Special Employee Groups

      • Pregnant women, those on maternity leave, or breastfeeding employees.
      • Workers with at least 15 years of service and less than 5 years until retirement.

      Legal Violations

      Terminations based on discriminatory practices, unpaid wages, or other illegal grounds are considered invalid under labor law.

      2. Notice Period Requirements

      General Rules

      Employer-Initiated Termination
      • For terminations due to reasons like poor performance, medical inability to work, or organizational changes (as per legal provisions), employers must provide 30 days’ written notice or pay one month’s salary in lieu of notice (the “N+1” rule).
      • In cases of economic layoffs (such as bankruptcy or restructuring), employers must notify employees 30 days in advance, submit layoff plans to labor authorities, and prioritize retaining employees with long-term contracts or those supporting dependent family members.
      Employee-Initiated Resignation
      Employees are required to give 30 days’ written notice for regular resignations, or 3 days’ notice during the probation period.

      Local Variations

      • Cities like Beijing and Shanghai mandate 30 days’ notice for non-renewal of expiring contracts; failure to provide notice results in a requirement to pay “代通知金” (one month’s salary as compensation).
      • Regions such as Shenzhen and Tianjin do not require advance notice for contract expirations, with termination taking effect immediately upon the contract’s end date.

      3. Economic Compensation

      Mandatory Payments

      Employers must provide severance pay for lawful terminations (e.g., layoffs, non-renewal of contracts) at a rate of one month’s salary per year of service, prorated for partial years of employment.

      Penalties for Illegal Termination

      In cases of unlawful termination that violate legal restrictions, employers are liable to pay double the standard severance compensation (2× the regular severance amount).

      Key Takeaways

      • Protective Restrictions: Designed to safeguard vulnerable employees and ensure fair termination procedures.
      • Notice Period: Typically 30 days, with variations depending on the region and type of termination.
      • Compensation Rules: Lawful terminations always require severance pay, while illegal terminations entail doubled penalties.
      For jurisdiction-specific regulations (e.g., differences between Guangdong and Jiangsu provinces), it is advisable to consult local labor authorities or legal professionals for detailed guidance.