Employers in China are required to notify the labor union prior to termination of an employee, and employers in various cities and provinces have been held liable for unlawful termination because they neglected to do so.[1] The requirement applies to each individual termination, and is overall similar to the US WARN Act and UK Collective Redundancy Consultation process. This article will help you understand what goes in a notification, and other important legal requirements so you can maintain compliance.

Contents

• Judicial Precedents
• No Union Presence at Your Company? Notice Not Waived
• Review Labor Union Opinions
• Best Practices

Judicial Precedents

Judicial precedents reported throughout China show that labor union notification is something worth paying attention to because you can be sued for lack of union notice.

The number of lawsuits arising from lack of pre-termination union notification is increasing, especially in the manufacturing, wholesale, retail, and service industries. Most of these cases have gone through the full appellate process: arbitration, trial, and appeal. Trial courts rule in favor of employees in over 50% of the cases, and 90% are upheld on appeal.

The following laws contain general pre-termination union notification requirements in China, which CBL has provided standard native English translations for:

• Employment Act § 30
• Labor Union Act § 21
• Employment Contracts Act § 43
• Local Laws

But note that, these laws are broad, cumbersome, and confusing, giving judges extensive leeway to enforce the legislative intent is to protect employee rights. China’s policymakers believe terminating an employment contract means ending employment, which affects living standards, so law needs to deter arbitrary terminations.

In China, labor unions are quasi-governmental civil society organizations mandated to represent workers and protect their rights under the China Labor Union Act, thus must intervene in employer terminations. The law empowers unions by requiring employers to notify the labor union of the reasons for termination so the union may review and provide an opinion. Notice is mandated because the Supreme Court says there can be no substantive justice without procedural justice, so procedural violations constitute violations of the law. Therefore, employers are required to pay damages if they discharge an employee without notifying the union, thereby providing additional procedural protection of employee rights.

Below, we’ll discover the way to navigating these requirements to avoid liability is complex, strategic, and varies from province to province. If you have a significant number of employees in China, getting advice from a labor lawyer expert in your local rules can mitigate this very significant risk. If you need help, contact CBL today to leverage our network of local experts.

No Union Presence at Your Company? Notice Not Waived

China’s courts are split on how should employers with no union presence should provide notice, so it’s important to understand the opinion of your local courts. Similar to how shop unions work in the US and UK, Chinese employees are legally entitled to form a shop union within the employer at their own election. However, not all workplaces will choose to establish a union presence. The following are 2 most commonly adopted views on employer obligations when there is no shop union.

In one view, China Employment Contracts Act § 43 requires advance notification only if the employer has a union presence. The reasoning is there’s no obligation without an entity to notify; this is implied in Supreme Court Labor Adjudicative Guidelines #1 (2020) § 47, which provides that “an employer with a shop union” commits unlawful termination if it fails to notify the union in advance. The employee may seek damages unless the employer provides supplemental notification before a suit is filed.[2]

A confusing fact about China labor law is all unions are quasi-governmental organizations, and they are structured like a government agency and have quasi-regulatory jurisdiction. Therefore, every shop union is under the jurisdiction of a local federation, which answers to the one national union federation. Some local courts believe that there is still union jurisdiction even in the absence of a shop union, although most local courts interpret the § 43 requirements to mean failure to notify does not constitute unlawful termination in absence of a shop union.

For example, in Beijing 03-cv-1702 (2020), the issue was whether a company without a shop union must notify the local union federation of the reasons for terminating an employee, omission of which is unlawful termination.[3] The employee, Hong, argued that notification is required if there is no shop union, and that the termination was thereby unlawful, entitling him to damages.

The employer responded that neither it nor its parent company in Tianjin had a shop union and that it notified the local labor union federation after the termination. The Beijing Third Intermediate Appellate Court upheld the trial court’s decision, rejecting Hong’s claim of unlawful termination based on failure to notify the labor union. The court’s ruling means a union notification is not required if there is none, and that failure to notify does not constitute a procedural violation—in Tianjin, at least.

A second view holds the legislative intent of China Employment Contracts Act § 43 is to prevent employers from discharging employees without union involvement, to protect employee rights and reduce unemployment. Enabling avoidance merely because it has no presence undermines the legislative intent. Therefore, under the Employment Contracts Act, an employer must still notify union federation in the local precinct, district, or county even if it does not have its own union.

This approach is adopted by local legislation in some regions. For example, in Jiangsu Civil Appeal No. 3252 (2019), both the trial and appellate courts found the company’s termination of Qiao’s employment contract to be unlawful due to failure to notify the labor union.[4] Dissatisfied, the employer petitioned for retrial on appeal with the Jiangsu Upper Appeals Court, arguing notice unfeasible because it did not have a shop union and its registered office is not in Jiangsu. The court held that although applicable judicial interpretations provide the legal consequences of failing to comply with the notification procedure and set time limits for supplemental notification, they do not exempt employers without a shop union from pre-termination notice.

Additionally, the Jiangsu Province Employment Contracts Local Law explicitly requires such notice.[5] Since the employment contract was performed in Jiangsu, the local law applied and the company was obligated to fulfill the notice procedure. The appeals court therefore dismissed the company’s motion for a new trial. In this case, Jiangsu local law explicitly requires employers without a shop union to provide pre-termination notice, and employers are liable for unlawful termination for not doing so.

The takeaway is, exercise caution when terminating an employee in China if your business does not have a union presence, and don’t assume you are exempt from the notification notice requirement. The most cost-effective strategy is usually to ask a local labor lawyer whether local laws or judicial opinions require notifying a local or higher level union federation, and if not, review local judicial precedent and decision rules. Then adopt policies to mitigate liability risk for unlawful termination on notice grounds.

Review Labor Union Opinions

Your obligation when terminating a China based employee is not limited to completing a notice form; you are also required to review and cooperate with the union’s labor relations work.

Labor unions have internal procedures for notifications. The law requires them to review whether the termination violates the law, employment contract, or company policy. Typically, the union’s labor law monitor will submit findings to a union meeting or union leadership for discussion and approval under the union’s bylaws. It then issues a written opinion, recommendation, or request for confirmation, typically signed by the responsible union official and sealed.

Chinese law requires employers to review the labor union’s opinion and cooperate in good faith. The employer is free to hold internal discussions or draft a response as it sees fit; there are usually no mandated legal requirements. The employer must then issue a written response to the labor union.

This raises questions as to what happens if the union still believes the termination is unlawful, yet the employer still wants to proceed and if there’s legal consequences for the employer. While no rule explicitly addresses this situation, applicable Chinese laws and judicial precedents imply that the employer is free to proceed with the termination so long as there was notice. The reasoning is the labor union has oversight authority but does not have the authority to stop a termination. Notifying the labor union is a procedural requirement; otherwise, it could endlessly dispute matters with employers.

Best Practices

An effective notification must include the correct content, and be sent to the correct recipient by the deadline, with specific attention to:

• Notification Parties. Chinese law requires that the employer must send the notification to the labor union as an organization, not to an individual. An employer with a union presence must notify its shop union board; an employer without one notifies the local union federation.
• Content and Form. The notification must include the facts and legal basis for the intended discharge. For example, a termination under China Employment Contracts Act § 40 might have the employee’s job description, poor performance record, and ineffectiveness of training or reassignment. While some local laws specify the required form of the notification, most do not. Snail mail, email, or even WeChat is acceptable as long as the employer can prove the notification was made. Provide written notice to document compliance in case of a lawsuit.
• Time Limit. China Employment Contracts Act § 43 requires employers to notify the labor union “in advance,” meaning before the employee is notified of the discharge. However, the Supreme Court adjudication guidelines allow a supplemental notification if late.[2] Employers aren’t liable for unlawful termination if the notification is completed before a suit is filed. Therefore, you can avoid liability if you promptly correct oversights, document the notification was at least sent before a lawsuit is filed, and ideally before labor arbitration.

Note some local laws specify notification time limits. For example, the Hubei Province PRC Labor Union Act Procedures requires 15-days advance written notification.[6] The union is required to issue a written opinion within 7 days, and request the termination be reconsidered if in violation of applicable law or the contract.

A cost-effective practice is to ask a local lawyer if there is local legislation specifying a time limit. If there is none, notify the labor union before issuing a termination notice to the employee; or at the very least, complete the supplemental notification before the case is filed with a court. Otherwise, you risk unlawful termination liability. Finding a trustworthy local expert can be very difficult; as an international law company, CBL can help you find a lawyer that is affordable and knowledgeable.

FURTHER READING

Get more insights about Chinese employment law:

• Legally Terminating China Employees for Poor Performance
• Contract Non-Renewal to Terminate a China Employee—Without Severance

FOOTNOTES

[1] How Do Employers with No Labor Union Notify One, (未建立企业工会的用人单位单方解除劳动合同如何履行通知工会手续?), (Guangzhou Nansha District Labor Union, Apr.23, 2025), (in Mandarin)

[2] Supreme Court Labor Adjudicative Guidelines #1 (2020), (最高人民法院关于审理劳动争议案件适用法律问题的解释(一)), (Supreme Court, Dec. 30, 2020), (in Mandarin)

[3] Beijing 03-cv-1702 (2020), ((2020)京03民终1702号), (China Judgements Online, Apr. 9, 2020), (in Mandarin)

[4] Jiangsu Civil Appeal No. 3252 (2019), ((2019)苏民申3252号), (China Judgements Online, Dec. 24, 2019), (in Mandarin)

[5] Jiangsu Province Employment Contracts Local Law, (江苏省劳动合同条例), (National People’s Congress, Sep, 27, 2008), (in Mandarin)

[6] Hubei Province PRC Labor Union Act Procedures, (湖北省实施 《中华人民共和国工会法》办法), (Huanggang Standing Committee of Congress, Apr. 21, 2021), (in Mandarin)