Employment Contract Law: State Council Wrestles with Implementing Regulations - International Law Office

The State Council is still drafting the implementing regulations for the Employment Contract Law following a limited public comment period. The council has reportedly assumed responsibility for the implementing regulations from the Ministry of Labour and Social Security, but has not indicated when they will be issued. The law came into force on January 1 2008 (for further details please see "Effect and Implications of Employment Contract Law").

The draft regulations are understood to address some of the unclear provisions of the law. For example, they reportedly clarify that an employee will be entitled to an open-ended contract at the end of his or her second fixed-term contract. Therefore, employers will have to decide at the end of the first fixed-term contract whether an employee is suitable for long-term employment.

The draft regulations reportedly define 'temporary', 'auxiliary', and 'substitute' employees, who may be subject to dispatch arrangements through agencies. For example, 'temporary employees' are generally dispatched for six months or the maximum term of one year. Except for these three types of employee, all agency employees will be considered to be directly employed by the host company. Agency workers who do not fall within one of these categories will be entitled to double pay until they receive a written contract and will enjoy additional protection. The draft rules also reportedly state that agency employees may not be subject to probation periods or engaged on a part-time or project basis.

Many local labour bureaux have indicated that they will not revise their local labour contract regulations until the national implementing regulations are issued, even though some local regulations conflict with the new law.

For further information on this topic please contact Andreas Lauffs or Jeffrey Wilson at Baker & McKenzie's Hong Kong office by telephone (+852 2846 1888) or by fax (+852 2845 0476) or by email (andreas.lauffs@bakernet.com or jeffrey.wilson@bakernet.com).