Shanghai Municipality, Labour Contract Regulations

Promulgated: November 15 2001
Effective: May 1 2002

Applicability: The Regulations apply to the labour contract relations between any worker and the enterprise, individual entrepreneur economic organization, State organ, institution or social association that employs him/her (Article 2).
The Regulations state that provisions of the Shanghai Municipality, Labour Administration of Foreign Investment Enterprises Regulations on labour contracts shall no longer apply to new labour contracts established between foreign investment enterprises and workers after the implementation of the Regulations (Article 61)

Main Contents: The Regulations provide that labour unions shall assist workers in entering into labour contracts and that the labour protection authority shall guide and supervise the implementation of the labour contract system (Articles 6 and 7). A labour contract may be supplied by the employer provided the contract follows the principle of equality and does not prejudice the legitimate rights and interests of the worker (Article 9). A confidentiality agreement may be incorporated in the labour contract or executed separately but such agreement shall automatically become void when the trade secret concerned enters the public domain (Article 15). Moreover, the required notice period for termination of the labour contract shall not exceed six months if a worker has a confidentiality obligation to the employer. A no-competition clause may also be included in a labour contract but the scope of post-termination restriction shall not go beyond the competing business and the restriction period shall not exceed three years unless otherwise required by the law or regulations. Where a no-competition clause is included in the contract, the worker shall not be further required to give advance notice for early termination of the contract (Article 16). The regulations also provide that where without concluding a labour contract a worker has nonetheless performed the work as required by an employer, a labour contract relation shall be deemed to exist (Article 27). Where a worker has part-time labour relationships with several employers, his total working hours shall not exceed the maximum working hours permitted by the law and labour contracts governing such labour relationships may be in writing or another form (Article 46 and 47). The Regulations contain further provisions concerning part-time labour relationships ( Article 48 to 53).