China Law Library

China Law Library
Employment
You Could Be Sued for Extending Employee Probation in China

You Could Be Sued for Extending Employee Probation in China

By Adrian Dunbar, Attorney, ATA Certified Translator • JD, University of Texas School of Law

Extending a new employee’s probationary period in China can lead to a court order to pay damages, even if the employee agreed to the extension in writing. The statute only authorizes a single probationary period and does not include provisions authorizing extensions. Nonetheless, extensions are sometimes upheld by courts if they remain within the statutory maximum or in the event of certain equitable exceptions, but this option is only available in some jurisdictions. Managers who need more time to decide whether a candidate is suitable for the position may therefore expose the company to significant liability. In this article, we will explain when the law may allow probationary period extensions and provide best practices for managing possible extensions.

Contents

Statutory Limits and Written Amendments
The Single Probationary Period Rule
Extending the Probationary Period: Requirements and Risks
Compliance and Validity in Unforeseen Events
Contractual Terms and Extension Decision
Documentation, Performance Evidence, and Compliance Opinions

Statutory Limits and Written Amendments

The legality of extending a probationary period depends on statutory limits on probationary period length. China Employment Contracts Act § 19 provides that an employer may only agree to a single probationary period, and its length cannot exceed the statutory maximum applicable to that employment contract term. These rules provide a basic compliance framework for extending probationary periods. The statutory maximums vary according to the employment contract term; for employment contract terms of 3 to 12 months, 1 to 3 years, and 3+ years or indefinite term employment contracts, the maximum probationary periods are 1, 2, and 6 months respectively. These limits are intended to prevent employers from abusing the probationary period to undermine employee rights.

What actually tends to happen is that employers seek to extend a probationary period near its end because they have concerns about the employee’s skills or performance, and this is a major issue in the reported cases. Here, whether an extension of the probationary period is lawful depends on whether the employer complies with the China Employment Contracts Act‘s mandatory provisions. The Act provides that amendments to an employment contract are lawful only if agreed upon by the parties and reduced to writing. Therefore, an amendment agreement signed during the probationary period that clearly sets forth the grounds and term of the extension will usually be enforceable.

In Shanghai Appeal 01-cv-13192 (2022), the court held that the trial court correctly found that two probationary period extension agreements signed by the parties did not exceed the statutory limit.[1] These constituted a lawful amendment to the original employment contract’s probationary period, and were not repeated probationary periods. The court gave no weight to Kang’s argument on appeal that Ying Company had unlawfully imposed repeated probationary periods, which could result in liability for damages.

The Single Probationary Period Rule

Probationary period extensions are valid only if they comply with China Employment Contracts Act § 19, a mandatory provision that permits only one probationary period. Thus, a second agreement to extend the probationary period at the expiration of the initial one is invalid. The extension is also invalid if it exceeds the statutory maximum (e.g., six months), or if signed after the initial probationary period expires.

The court in Beijing Appeal 01-cv-5195 (2020) held that the probationary period extension was unenforceable because it violated the mandatory rule, even though the employee agreed to it.[2] The court’s reasoning was that such extensions affect an employee’s wages and job security, and can violate employee rights if used to evade liability or terminate employees. Courts strictly apply the requirements that extensions must be lawful and cannot be abusive.

In a 2023 Shanghai case, the court held that because the probationary period affects whether an individual accepts a job offer, the employer must clearly specify the period in the employment contract and evaluate the employee’s performance during that time; otherwise, the employer assumes all hiring risks.[3]

Once an employment relationship is formed, the parties are not equal because the employer has a right of control over the employee. If the employer could negotiate an additional probationary period, it would likely result in a violation of employee rights. Therefore, the parties’ negotiations to extend the probationary period in this case constituted an additional probationary period agreement, which violates the China Employment Contracts Act and is therefore void.

Given how frequently employers lose in court, legal advice on structuring extensions is necessary to avoid liability for damages. If you need help with employment issues in China, ask CBL to help connect you with a lawyer.

Extending the Probationary Period: Requirements and Risks

A probationary period extension is only valid in China if it meets all requirements of the China Employment Contracts Act. That means the employer cannot extend the probationary period unilaterally; the employee must agree. The employer may actually negotiate an extension if the employee’s performance is unsatisfactory or further evaluation is needed. Even with agreement, the extended probationary period cannot exceed the statutory maximum.

The China Employment Contracts Act sets the maximum length of the probationary period. Thus, even if the employer and employee have agreed to extend the probationary period, the total duration cannot exceed the statutory maximum. A three-year contract, for example, can have a maximum six-month probationary period; exceeding that limit is unlawful.

Extensions must be reasonable and based on the employee’s performance or other reasonable grounds for evaluation. For example, an employer may extend the probationary period if the employee’s performance does not meet expectations, to allow for further evaluation. However, an extension is invalid if intended merely to delay confirmation of employment or for another improper purpose.

The courts are split over whether probationary period extension agreements are valid, weighing statutory rules against practical business needs. Some courts have held that an employer and employee can only agree to one probationary period under the China Employment Contracts Act § 19, and extending the period is unlawful if it does not meet statutory requirements. Under this approach, mandatory provisions cannot be bypassed. The policy rationale is to protect employee rights and ensure employers do not circumvent the law to undermine those rights. For example, Guangzhou Case 304-cv-46999 (2021) found that, after an initial three-month period, imposing an additional three-month probationary period because the employee allegedly lacked the required qualifications violated this rule, even though the parties agreed to it.[4]

Compliance and Validity in Unforeseen Events

Some courts apply a more lenient standard, finding extension agreements valid so long as they are reasonably required for the employer’s actual staffing needs and otherwise comply with the law. Under this approach, a probationary period extension is valid if the agreement is executed within the original probationary period, the total probationary period does not exceed the statutory maximum, and the employee’s rights are not impaired. These rulings are grounded in procedural compliance and agreement between the parties.

For example, an extension of the probationary period was upheld in Shanghai Case 2786 (2018) because the extended period did not exceed the statutory maximum, the employee’s wages and benefits were not reduced, and the employee agreed to the extension. The court held the employee’s rights were not violated, and the lower court judgment was correct.[5] Some courts have held that extending the probationary period is lawful when the employee is prevented from working or completing an evaluation due to force majeure events, such as a pandemic or natural disaster. These courts have reasoned that the purpose of the probationary period is to allow the employer to evaluate the employee’s ability and performance, and extending the period is reasonable when an objective event prevents completion of the evaluation.

For example, in Shanghai Case 0114-cv-22191 (2020), the court held that the purpose of the probationary period is to evaluate an employee’s work performance.[6] Due to the COVID-19 pandemic, the employer shut down operations for nearly two months, during which the employee did not work, and the employer could not evaluate their job performance and skills. The employee’s supervisor also concluded that the employee’s job skills failed to meet expectations. The court therefore found that the employer’s decision to extend the probationary period by 1.5 months based on the pandemic furlough and the employee’s actual job performance was reasonable.

Contractual Terms and Extension Decision

While extending a probationary period in China can reduce employment risks, the employer is at risk of being sued. In a dispute, the court will require evidence establishing the extension is lawful and necessary. Therefore, the employer must preserve evidence and documentation, and take reasonable preventative measures.

Whether a dispute is resolved in the employer’s favor will often turn on whether complete contractual terms, documented discussions, and employee acknowledgment forms can be produced. Below are some recommendations to reduce risk.

The employment contract should provide for a probationary period and comply with the China Employment Contracts Act. If the employee needs more time to be evaluated, include the maximum allowable probationary period in the original contract rather than extending it later. The contractual terms are the primary basis for determining whether a probationary period extension is lawful.

Employers must define the probationary period in the employment contract and get the employee’s signature on it. After the contract is signed, send a written notice or email to confirm the probationary period and retain it as documentation. Extend the probationary period only after following the statutory procedures for contract amendments and ensure both parties sign the amended contract. Parties should keep complete written records and documentation as evidence in case of litigation. If extending the probationary period, the total duration must not exceed the statutory limit, and the employee must provide informed consent in writing to prevent it from being voided.

Documentation, Performance Evidence, and Compliance Opinions

The key to managing the probationary period is making the decision to continue the employment or terminate it in advance, rather than trying to extend the period at the end. The China Employment Contracts Act requires that an employer and employee agree to only one probationary period, and termination for not meeting job requirements must occur during the probationary period. Therefore, employers should plan ahead to complete the final probationary review, get management approval, discuss the decision with the employee, and serve a notice before the probationary period expires. HR should set expiration alerts. Complete the evaluation sufficiently before the end of the probationary period, so you have a window of opportunity to make a decision.

Managers should treat extension requests as procedural deviations, not corrective action. If a department manager requests additional time to evaluate an employee, require the manager to identify any unresolved performance issues and incomplete evaluations before the probationary period expires. HR and legal counsel should then determine whether the existing record supports confirmation of employment or termination. If documentation is lacking, the probationary period should not be extended to buy time. Employers should break position eligibility criteria into early, mid, and final checkpoints, with designated reviewers and escalation paths for each stage. This can reduce management delays and enable companies to compare retention costs, termination risks, and contingency staffing plans by the statutory deadline, leading to more consistent staffing decisions.

Document the full discussion and negotiation in writing. Before extending the probationary period, hold a formal meeting with the employee to explain the reasons and purpose, and document the discussion. After reaching mutual agreement, prepare a written record detailing the reasons, duration, and objectives of the extension, and have the employee sign an acknowledgment. Retain all documents, including emails, meeting minutes, and signed acknowledgments, as documentation in case of litigation.

Extend the probationary period only when there is a legitimate business need and the employee’s performance warrants it. The employer should fully evaluate the employee’s abilities and performance during the original probationary period and not use an extension if the assessment process was defective. To demonstrate the reasonableness of an extension, maintain records that show the evaluation process was complete and transparent.

Document the employee’s job performance in writing throughout the probationary period, including performance reviews, performance ratings, and training feedback. These records provide a basis for business decisions and important evidence for any disputes that may arise. If a probationary period extension is needed, document it with the employee’s signature and include specific reasons, such as the need to evaluate a particular skill or assess how well the employee is adjusting to the role. Continue to evaluate the employee during the extension and document the results to provide a paper trail showing that the extension is necessary and lawful.

Conclusion

The law sets a maximum limit on the length of a probationary period and requires both the employer and employee to agree to any extension. Nonetheless, courts have found it difficult to determine whether an extension complies with the law or is lawful. Employers should therefore adopt a compliance policy to ensure probationary period extensions are not abused.

Expert advice on adapting this policy to your business model can ensure that it supports the company’s goals. If your company is dealing with employment issues in China, ask CBL to connect you with a lawyer.

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