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Could Labor Law Apply to Foreign Employee?

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In  every labor contract, there are statutory clauses and promissory clauses. The statutory clauses shall be stipulated  in accord with labor law, and the promissory clauses could be stipulated by contractual parties with free will as long as they don't violate other laws in China.

The difference  between Chinese Employees and Foreign employees when concluding a labor relation in China is the foreign employee has more promissory areas. Due to statutory rules are used to protect employees, the Chinese employees are more protected.

 

Statutory areas for Chinese Employee Statutory Areas for foreign Employees
  National Rules Shanghai Rules
Minimum Wages
Working Time ×
Rest and Vacation
Safety and sanitation
Social insurance ×
Arbitration and Litigation
Termination and Revoke of labour contract × ×
Compensation × ×
Probation Period × ×

*When I talked about statutory areas,  I don't mean the entire area is statutory, it’s just there are certain rules in this area shall be complied with. For example,  about the working time, the law just draws up the maximum working hour per day and per week, any agreement lower than this maximum limitation is allowed.

The form above shows the different treatment for foreign employees and chinese employees, and also for foreign employees in Shanghai and other cities of China.

For example, there are certain rules for chinese employee and employer when they want to terminate the labor contract. The Chinese employee could notice the employer  30 days in advance, then leave the company  when times up. If the company stipulates a longer term for leave notice, it is invalid due to it voilate the compulsive law.

But for foreigner, is this rules applicable?

The foreign employee and the employer in China could make the term of notice longer and if it is stipulated in the labor contract, the foreign employee has to follow.

Thus, the termination rules in Labor law is only compulsive for Chinese employee.

 Shall the employer pay the compensation for foreign employee?

For Chinese employee, compensation(severance) is also compulsvie when the employer want to negotiate with the employee about termination.

But for foreign employee, even the judicial system does not have a constant conclusion. Some of the courts in Shanghai think the compensation shall be compulsive no matter to foreigner or Chinese employee, due to all the employer is a Chinese entity which shall follows the labor law. Some of the courts in Shanghai think compensation is not necessary if the labor contract says another way and the foreign employee agrees to it.

Thus, the labor rules for foreign employee are very complicated and equivocal.