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The secondment of expatriate employees to China has been a headache for multinational companies since 2009, when the tax authorities started to treat secondment as creating a permanent establishment of the overseas employer. However, new rules recently issued under domestic tax law with respect to cross-border secondment will hopefully ease the pain associated with expatriate secondments.

The Supreme People's Court has issued the long-awaited Interpretation on Various Issues Concerning Application of Law in the Trial of Employment Disputes (commonly referred to as 'SPC IV'), which provides clarity on some hot-button issues. Among other things, it sets out certain severance pay protections and specific rules on the enforcement of non-compete restrictions.

The Standing Committee of the National People's Congress has finally passed an amendment to the Employment Contract Law, under which companies will no longer be allowed to hire staff through staffing agencies, except under very narrow circumstances. Companies should be mindful of how these changes may affect their human resources structures.

The Shanghai Pudong District People's Court has dismissed an employee's claim against his former employer for termination payments after finding that the credibility of the employee's evidence was outweighed by the evidence produced by the employer and the employee's refusal to take a polygraph test. The case highlights that submission of fraudulent evidence is still a problem in employment disputes in China.

The Dongguan Number 3 District People's Court has upheld an employer's termination of 17 striking employees for misconduct. Although Chinese law does not explicitly allow employees to strike, it is silent on whether strikes are considered illegal. This case indicates that in some strike situations, the courts may uphold an employer's disciplinary actions against striking employees on the ground of serious violation of company rules.

The Shenzhen Municipal People's Congress Standing Committee has passed the Regulations on the Promotion of Sex Equality, which will become effective in January next year. While various national laws and local regulations already contain provisions related to sex discrimination and sexual harassment, this is the first piece of legislation exclusively addressing the issue of sex equality.