Interpretation on Several Issues Concerning the Application of the Law in the Trial of Employment Disputes (4)

(1) if, following review, it finds that the employment and public personnel arbitration commission genuinely does not have jurisdiction in the case, it shall inform the party to apply to the competent employment and public personnel arbitration commission for arbitration; or

(2) if, following review, it finds that the employment and public personnel arbitration commission has jurisdiction, it shall instruct the party to apply for arbitration and notify in writing the employment and public personnel arbitration commission in question of its review opinion. If the employment and public personnel arbitration commission still does not accept the case, and the party institutes a legal action in respect of the employment dispute, the people's court shall accept it.

Article 2: The type of arbitration award shall be as determined by the written arbitration award.

If the written arbitration award fails to state whether it is a final award or a non-final award, and the employer, dissatisfied with the arbitration award, institutes a legal action in a basic-level people's court, the basic-level people's court shall, depending on the circumstances set forth below, handle the matter as follows:

(1) if, after review, it finds that the arbitration award is not final, it shall accept the case; or

(2) if, after review, it finds that the arbitration award is final, it shall refuse to accept the case, however, it shall inform the employer that it may apply to the intermediate people's court of the place where the employment and public personnel arbitration commission is located for vacation of the arbitration award within 30 days of the date of receipt of the ruling refusing acceptance; if it has accepted the case, it shall render a ruling dismissing the suit.

Article 3: When an intermediate people's court is to try a case where an employer has applied for vacation of a final arbitration award, it shall assemble a collegiate bench to hear the case. After reviewing the files, investigating and questioning the parties, if there are no new facts, evidence or grounds and the collegiate bench deems it unnecessary to open a court hearing, it may refuse to hear the case.

The intermediate people's court may arrange mediation for the parties. If a settlement agreement is reached, it may prepare a written mediation statement. If a party fails to perform the settlement agreement by the deadline, the other party may apply to the people's court for enforcement.

Article 4: If, with respect to a settlement agreement reached under the auspices of a people's mediation committee solely in respect of a payment obligation, the parties deem it necessary, they may jointly apply to the basic-level people's court of the place where the people's mediation committee is located for judicial confirmation of the same.

Article 5: If a worker is transferred by his/her original employer to a new employer for a reason other than one attributable to the worker himself/herself, the original employer does not pay severance pay and the worker terminates his/her employment contract with the new employer pursuant to Article 38 of the Employment Contract Law or the new employer proposes the termination or ending of the employment contract, and when calculating his/her years of work for the payment of severance pay or compensation, the worker requests that his/her years of work with the previous employer be calculated together as part of his/her years of work with the new employer, the people's court shall uphold such request.

It shall be deemed that a “worker is transferred by his/her original employer to a new employer for a reason other than one attributable to the worker himself/herself” if:

(1) the worker continues to work in his/her original place of work or job, but the entity in his/her employment contract changes from the previous employer to the new employer;

(2) the employer transfers the worker by way of assignment or appointment by the organisation;

(3) the worker is transferred as a result of the merger, division, etc. of the employer;

(4) the employer and its affiliates enter into employment contracts with the worker on a rotating basis; or

(5) another reasonable circumstance.

Article 6: If the parties provide for a non-compete clause in the employment contract or in a confidentiality agreement, but do not provide for the payment of severance pay to the worker upon termination or ending of his/her employment contract, the worker performs his/her non-compete obligation and demands that the employer pay him/her severance pay on a monthly basis at the rate of 30% of his/her average wage for the 12 months preceding the termination or ending of his/her employment contract, the people's court shall uphold such demand.

If the 30% of the monthly average wage specified in the preceding paragraph is less than the minimum wage rate in the place of performance of the employment contract, payment shall be made at the minimum wage rate in the place of performance of the employment contract.

Article 7: If the parties provide for both a non-compete clause and severance pay in the employment contract or in a confidentiality agreement, and when a party terminates the employment contract, unless otherwise provided, the employer demands that the worker perform his/her non-compete obligation or, after performing his/her non-compete obligation, the worker demands that the employer pay him/her severance pay, the people's court shall uphold such demand.

Article 8: If the parties provide for both a non-compete clause and severance pay in the employment contract or in a confidentiality agreement and after the termination or ending of the employment contract, the employer fails to pay severance pay for three months due to a reason attributable to itself and the worker requests termination of the non-compete clause, the people's court shall uphold such request.

Article 9: If an employer requests termination of a non-compete agreement during the non-compete term, the people's court shall uphold such request.

If, at the time of termination of the non-compete agreement, the worker requests that the employer pay him/her an additional three months of non-compete severance pay, the people's court shall uphold such request.

Article 10: If a worker breaches the non-compete clause and, after payment of liquidated damages to the employer, the employer demands that the worker continue to perform his/her non-compete obligation as specified, the people's court shall uphold such demand.

Article 11: If amendments are made to an employment contract without, however, doing so in writing, but the orally amended employment contract has actually been performed for more than one month and the employment contract, as amended, does not violate laws, administrative regulations, state policy, public order or good social customs, and a party asserts that the amendments to the contract are invalid on the grounds that they were not made in writing, the people's court shall reject such assertion.

Article 12: If an employer that has established a labour union terminates an employment contract in compliance with Article 39 or 40 of the Employment Contract Law without, however, first notifying the labour union pursuant to Article 43 of the Employment Contract Law and the worker requests that the employer pay him/her compensation on the grounds that it illegally terminated his/her employment contract, the people's court shall uphold such request, unless the employer has retrospectively carried out the relevant procedure before the institution of the legal action.

Article 13: If, after the implementation of the Employment Contract Law, an employer ceases operations following the expiration of its term of operation, making continued performance of an employment contract impossible, and the worker requests that the employer pay him/her severance pay, the people's court shall uphold such request.

Article 14: If a foreign national or stateless person executes an employment contract with an employer in China without having secured an employment permit in accordance with the law, or a resident of the Hong Kong Special Administrative Region, Macao Special Administrative Region or Taiwan executes an employment contract with an employer on the mainland without having secured an employment permit in accordance with the law, and the concerned party requests confirmation of the existence of an employment relationship with the employer, the people's court shall deny such request.

If a foreign national who holds a Foreign Expert Certificate and has secured a Permit for a Foreign Expert to Work in China has established a work relationship with an employer in China, the same may be recognised as an employment relationship.

Article 15: In the event of a conflict between relevant judicial interpretations promulgated by this court before the implementation hereof and these Interpretations, such judicial interpretations shall cease to apply from the date of implementation hereof.

The Interpretation shall apply to employment dispute cases that have not reached final judgment at the time of the implementation hereof; the Interpretation shall not apply to cases that were final before the implementation hereof but in respect of which a party applies for a retrial or a decision for a retrial is rendered in accordance with the procedure for adjudication supervision.