Contents
Business Employee Layoff Rules
Section 1 The purpose of these Rules is to direct employers to properly exercising layoff rights pursuant to the Employment Act of the People’s Republic of China.
Section 2 An employer may conduct layoffs only when necessary due to bankruptcy risk, court-ordered reorganization, or major operational difficulties, and only if the employer meets local government criteria for financially distressed employers.
Section 3 Where feasible, employers shall provide retraining or employment assistance for employees affected by a layoff.
Section 4 Employers for whom it is necessary to conduct a layoff shall follow this process:
(a) Explain current business conditions to the labor union or a meeting of all employees at least 30 days in advance;
(b) Prepare a layoff plan that includes a list of all employees to be laid off, the timeline and specific layoff process, and the amount of legally mandated financial compensation for affected employees pursuant to applicable statutes, regulations, and collective bargaining contracts;
(c) Seek opinions on the plan from the labor union or all employees collectively and make any necessary revisions;
(d) Submit the layoff plan and opinions from the labor union or employees to the local labor regulator and incorporate any labor regulator recommendations into the plan;
(e) Announce the finalized layoff plan, terminate employment contracts for affected employees, pay the legally required severance, and issue termination certificates for all affected employees pursuant to law.
Section 5 The following classes of employees are protected from layoffs:
(a) Employees partially or fully unable to work due to an occupational illness or work-related injury;
(b) Employees on statutory medical leave for illness or injury;
(c) Women employees during pregnancy, maternity, or breastfeeding;
(d) Any other employees protected by applicable laws or administrative regulations.
Section 6 Laid off employees eligible for unemployment insurance may register with local employment services and file for unemployment benefits.
Section 7 If an employer hires new employees within six months after a layoff, it must give terminated employees the right of first refusal for rehire in their former positions. The employer shall also report details of the hiring plan to the local labor regulator, including the number of new hires, the hiring schedule and criteria, and details of workers given priority for their former positions.
Section 8 Labor regulators shall order employers to cease and correct any violations of applicable laws, regulations, or rules during layoffs pursuant to law.
Section 9 Employers shall thoroughly consider all reasonable labor union or employees opinions regarding the layoff.
If an employer conducts a layoff in violation of applicable laws, regulations, or collective bargaining agreements, the labor union is entitled to require the employer to reconsider the layoff.
Section 10 Labor disputes arising from layoffs shall be resolved by the parties pursuant to applicable dispute resolution laws.
Section 11 Labor regulators in provinces, autonomous regions, and home rule cities may issue additional administrative rules under these Rules based on conditions in their specific jurisdictions.
Section 12 These Rules shall take effect on January 1, 1995.
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This article was translated to American English from the following government publication:
“企业经济性裁减人员规定”
https://www.mohrss.gov.cn/xxgk2020/gzk/gz/202112/t20211228_431555.html