Guangdong Province, Enterprise Collective Contract Regulations (Revised)

Article 2: These Regulations shall govern the conduct of collective bargaining and the execution of collective contracts by enterprises and their employees on the administrative territory of Guangdong Province.

Article 3: Enterprises shall establish and improve collective bargaining and collective contract systems in accordance with the law.

For the purposes of these Regulations, the term “collective bargaining” means the act whereby an enterprise and its employees carry out negotiations on an equal basis on matters such as labour remuneration, working hours, rest and leave, work safety and hygiene, and insurance and benefits.

For the purposes of these Regulations, the term “collective contract” means a written agreement executed by an enterprise with its employees subsequent to their reaching a consensus through collective bargaining.

Article 4: In conducting collective bargaining and entering into collective contracts, the principles of lawfulness, fairness, equality, free will, negotiated consensus and good faith shall be complied with, and consideration shall be given to the lawful rights and interests of both parties.

Article 5: People's governments at each level shall strengthen their employment relationship harmonisation work, erect and develop harmonious and stable employment relationships and consider and resolve, in a timely manner, major issues that arise in the course of collective bargaining and collective contract work.

The administrative departments for human resources and social security of people's governments at the county level and above, together with unions and enterprise representative organisations, shall establish tripartite employment relationship harmonisation mechanisms.

The administrative department for human resources and social security at each level shall guide, coordinate and monitor the implementation of the collective bargaining and collective contract systems in accordance with the law.

Article 6: Local labour union federations shall, in accordance with the law, arrange for, guide and coordinate enterprise labour unions in conducting collective bargaining and executing and performing collective contracts.

An enterprise labour union shall, in accordance with the law, represent employees in conducting collective bargaining and executing collective contracts with the enterprise and safeguard the lawful rights and interests of the employees.

Article 7: Enterprise representative organisations, such as enterprise federations, federations of industry and commerce, associations, and chambers of commerce, shall assist enterprises in establishing and improving the collective bargaining and collective contract systems.

Part Two: Collective bargaining

Section One: Subject of collective bargaining

Article 8: Employees may conduct collective bargaining with their enterprises on the following matters:

(1) the determination, increase and reduction of labour remuneration;

(2) working hours, mainly including the working hour system, the method for extending working hours, the working hours for special jobs and the standards for labour input;

(3) rest and leave, mainly including daily rest periods, weekly rest day arrangements, the measures for annual leave, as well as the rest, annual leave and other leave for employees who are not subject to the regular working hours system;

(4) work safety and hygiene;

(5) insurance and benefits;

(6) special protection measures for female employees and for minor workers who are at least 16 years of age and less than 18 years of age;

(7) liability for breach of the collective contract; and

(8) other matters the parties deem necessary to negotiate on.

Article 9: Collective wage bargaining shall comply with the principle of distribution of wages according to work, and the paying of the same remuneration for the same type of work shall be implemented. Employees may negotiate on the following matters with their enterprises:

(1) wage standards, form of distribution of wages and other wage distribution matters as well as the wage payment method;

(2) the average annual wage level of the employees, and the adjustment range and adjustment method therefor;

(3) wages and benefits during probation and during sick leave and leave of absence; and

(4) other wage-related matters that the parties deem necessary to negotiate on.

Article 10: The following factors shall be comprehensively taken into consideration in collective wage bargaining:

(1) the labour productivity and economic efficiency of the enterprise;

(2) the enterprise's total payroll and employee average wage level during the previous year;

(3) the enterprise wage guidelines and labour market guidance wage level published by the local administrative department for human resources and social security;

(4) the consumer price index of urban residents for the region published by the local people's government's statistics authority;

(5) the local minimum wage standard, and the average growth rate of employee wages in the region and industry published by relevant departments of the local people's government; and

(6) other information relevant to collective wage bargaining.

Article 11: When conducting collective wage bargaining, employees and enterprises may request a wage increase, freeze or reduction.

In negotiations, employees may request a wage increase based on factors such as the increase in the enterprise's profit for the year, the guidance wage levels published by the local people's government, the rate of increase in employee wages in the region and the wage levels of the enterprise in its region and industry.

In negotiations, an enterprise may request a wage freeze or reduction based on the actual circumstances of a serious deficit for the year and comprehensive consideration of factors such as commodity prices and government guidance wage levels.

Section Two: Collective bargaining Representatives

Article 12: When conducting collective bargaining, the employees and enterprise shall each select their respective collective bargaining representatives. The collective bargaining representatives (Representatives) shall have the authority to engage in collective bargaining in the interests of their respective sides.

Each party shall have three to nine Representatives, and designate one among them as its chief Representative. In the case of a relatively large enterprise with a relatively large number of employees, the number of Representatives may be suitably increased if agreed to by the parties. The parties may separately assign a suitable number of observer representatives.

A Representative of the enterprise may not concurrently serve as a Representative of the employees and vice versa.

Article 13: The Representatives of the enterprise shall be determined by the enterprise's legal representative, and the enterprise's legal representative or another manager of the enterprise appointed in writing by the enterprise's legal representative shall serve as the chief Representative.

The Representatives of the employees shall be selected by the labour union or through a democratic selection by the employees as organised by the labour union. The head of the labour union shall serve as chief Representative. If the enterprise does not have a labour union, the Representatives shall be selected through a democratic selection by the employees as organised by the local labour union federation of the place where the enterprise is located and require the affirmative consent of at least half of the employees; the chief Representative shall be selected by the Representatives participating in the collective bargaining.

The replacement and substitution of Representatives shall be carried out by the procedure for the selection of Representatives.

Article 14: Representatives shall perform the following duties:

(1) participating in collective bargaining related activities and putting forth their negotiation opinions;

(2) collecting, keeping abreast of and providing collective bargaining related information and documentation;

(3) listening to and collecting the opinions of the persons of their side, accepting inquiries on collective bargaining related issues from the persons of their side and, in a timely manner, reporting on the status of, or bringing in feedback from, the negotiations to the persons of their side;

(4) representing their side in the resolution of collective bargaining disputes; and

(5) other duties as specified in laws and regulations.

Article 15: The enterprise shall assure the working conditions and working hours required by the Representatives to perform their negotiation duties, and provide to the Representatives of the employees true information and documentation relating to the collective bargaining. The Representatives shall maintain the confidentiality of the enterprise's trade secrets.

The Representatives of the employees shall provide to the enterprise the documentation relating to the collective bargaining in their possession.

Article 16: The lawful rights and interests of the Representatives shall be subject to legal protection. Their performance of their negotiation duties shall be deemed provision of normal work, and the enterprise may not adjust their positions, or reduce their wages or various benefits without legitimate reason.

If the employment contract of a Representative expires while he/she is performing his/her duties, the term of his/her employment contract shall be extended automatically until such time as he/she has completed the performance of his/her duties. While a Representative is performing his/her duties, the enterprise may not terminate his/her employment contract, except in the circumstances set forth in Article 36 or 39 of the PRC Employment Contract Law.

Section Three: Collective bargaining procedure

Article 17: Employees and their enterprise may make a request for collective bargaining and carry out negotiations on the basis of equality in accordance with the law.

In general, collective bargaining shall be conducted once per year.

Article 18: A request for collective bargaining shall be made in writing.

If the employees deem it necessary to conduct collective bargaining with their enterprise, they shall make the same known to the enterprise's labour union. The enterprise's labour union shall determine whether to bring the request for collective bargaining before the enterprise based on the opinions of the employees and the specific circumstances of the enterprise. If proposed by at least half of the employees or at least half of the representatives to the employee representative congress, the enterprise's labour union shall bring the request for collective bargaining before the enterprise. If the enterprise does not have a labour union, the employees may submit a request for collective bargaining to the local labour union federation of the place where the enterprise is located. If the local labour union federation of the place where the enterprise is located secures the consent of at least half of the employees or at least half of the representatives to the employee representative congress, it shall bring the request for collective bargaining before the enterprise.

If an enterprise deems it necessary to conduct collective bargaining with its employees, it shall bring the request therefor before its labour union. If the enterprise does not have a labour union, it may bring such request before the local labour union federation of the place where it is located.

Article 19: Where employees or their enterprise make(s) a request in writing for collective bargaining, the opposite party shall sign the acknowledgement of service at the time of receipt of the written materials for the request for collective bargaining, give a written reply within 30 days, addressing each item in the request for negotiations, and carry out negotiations on the relevant matters. The written materials for the request for collective bargaining shall include the date and place of the negotiations and the matters to be negotiated, and provide the reasons for the demands.

Article 20: The period of collective bargaining shall be three months from the date of service of the written materials for the request for collective bargaining. Depending on the actual circumstances of the enterprise, such period may be suitably reduced or increased if the parties reach agreement thereon through consultations, provided that any such increase may not exceed 60 days.

Article 21: In general, collective bargaining shall take the form of negotiations in face-to-face meetings, or, alternatively, may be conducted in writing or other form approved by the parties. If either party requests that it be conducted in face-to-face meetings, it shall be conducted in such form.

Where collective bargaining is conducted in face-to-face meetings, such meetings shall be presided over by the chief Representatives of the parties either in turn or jointly. Minutes of collective bargaining meetings shall be signed in confirmation by all of the Representatives present at the meetings. Where collective bargaining is conducted in writing, the submitted written opinions shall be signed in confirmation by all of the Representatives.

The enterprise shall provide the venue and other such necessary resources for the negotiation sessions.

Article 22: When conducting collective bargaining, the employees and their enterprise shall take peaceful and rational means to maintain the enterprise's normal production and operation order and may not:

(1) refuse or deliberately delay without legitimate reason the collective bargaining;

(2) intimidate or entice the Representatives of the other side;

(3) disturb or disrupt the collective bargaining order by violence, coercion or other illegal means;

(4) restrict the personal liberty of relevant persons, or insult, menace or use violence to injure them; or

(5) commit another act that could intensify the conflict.

Article 23: When conducting collective bargaining, the enterprise may not:

(1) restrict or interfere with the labour union in exercising its functions and powers or the employees in selecting their Representatives, or retaliate against the Representatives of the employees;

(2) refuse to provide materials necessary for the collective bargaining or provide fraudulent materials; or

(3) refuse to perform the collective bargaining settlement agreement.

Article 24: When conducting collective bargaining, employees may not:

(1) breach the terms of their employment contracts or fail to complete their work tasks;

(2) breach labour discipline or use any means to compel other workers of the enterprise to be absent from their jobs; or

(3) block, obstruct or seal off the accesses to the enterprise or important thoroughfares, impede the entrance and exit of personnel, supplies, etc., damage enterprise equipment and tools or disrupt the normal order of production and other business of the enterprise or the public order.

Article 25: Where the parties reach a consensus through collective bargaining, the enterprise shall prepare the draft of the collective contract.

Where collective bargaining fails to produce a consensus, the negotiations may be suspended if agreed to by the parties and a time for resumption of negotiations agreed upon.

Part Three: Collective contracts

Article 26: The draft of a collective contract shall be presented by the labour union or the Representatives of the employees to the employee representative congress or all of the employees for discussion. Discussion of the draft of the collective contract by the employee representative congress or all of the employees shall require the presence of at least two thirds of the employee representatives or employees, and the consent of at least half of all of the employee representatives or at least half of all of the employees shall be required for its adoption. Once the draft of the collective contract has been discussed and adopted, it shall be formed upon the signing and stamping thereof by the chief Representatives of both parties. The collective contract shall be submitted to the local administrative department for human resources and social security for the record by the enterprise within seven days from the date of its formation.

If the draft of the collective contract is rejected, the Representatives of the employees shall listen to and collect the opinions of the employees on the matters that were rejected and, after further negotiations with the Representatives of the enterprise, submit them again for discussion and adoption.

Article 27: Once a collective contract has been formed and legally entered into effect, it shall be binding on the enterprise and all of the employees and be strictly implemented by them. The enterprise shall announce the collective contract to all of its employees within five days from the date of its entry into effect.

Article 28: The term of a collective contract shall be one to three years. Once the term of a collective contract expires or a condition for its termination as specified by the parties arises, the collective contract shall immediately terminate.

Either party may make a request to the other party for the execution of a new collective contract or its renewal three months before its expiration.

Article 29: A change in the name of the enterprise, its legal representative, main person(s) in charge or equity, a capital increase or reduction, or other such matter during the term of a collective contract shall not affect its validity.

Article 30: A collective contract may be amended or terminated if:

(1) the parties reach a consensus thereon through consultations;

(2) it becomes partially or wholly unperformable due to force majeure;

(3) the enterprise goes bankrupt, ceases production or is dissolved, making its performance impossible; or

(4) another circumstance as specified in laws or regulations arises.

The procedures for collective bargaining and the execution of collective contracts specified herein shall apply to the amendment and termination of collective contracts.

Part Four: Dispute handling

Article 31: Employees and their enterprise shall resolve collective bargaining disputes based on the facts and in compliance with the principles of lawfulness, orderliness and peacefulness.

Article 32: If a dispute arises in the course of collective bargaining or performance of the collective contract, and the employees and enterprise are unwilling to hold consultations, or the consultations prove fruitless, or, after they reach a settlement agreement, such agreement is not performed, an application for mediation may be made to a lawfully established grassroots people's mediation organisation or an organisation that has labour dispute mediation functions.

If an agreement is reached through the mediation of the dispute, the employees and enterprise shall perform the same.

Article 33: If a dispute arises between the employees and their enterprise in the course of collective bargaining, the employees may make a request to the local labour union federation of the place where the enterprise is located to help reconciliation, and such labour union federation shall promptly intervene, guide and assist the employees in carrying out negotiations with the enterprise in accordance with the law, and help the parties to reach a consensus.

Article 34: If a dispute arises between the employees and their enterprise in the course of collective bargaining, the enterprise representative organisation shall promptly intervene, and guide and attempt to procure the conduct of collective bargaining by the enterprise with its employees in accordance with the law, assist the enterprise in maintaining the normal order of production and other business and help the parties to reach a consensus.

Article 35: If a dispute still cannot be resolved after the reconciliation attempt offered by the local labour union federation of the place where the enterprise is located and the enterprise representative organisation, the local administrative department for human resources and social security shall assign personnel or designate persons from the directory of collective bargaining experts to help reconciliation.

Article 36: Where a collective bargaining dispute involving a relatively large number of persons or that has a relatively large effect arises, the people's government at each level shall coordinate on an overall basis relevant departments such as the department for human resources and social security, public security department, judicial administrative department and state-owned assets supervision and administration authority, together with the local labour union federation and enterprise representative organisation to jointly help reconciliation.

Article 37: Where collective bargaining is being conducted and an enterprise or public institution that provides public services such as water supply, electricity supply, gas supply, public transport, broadcasting, communications, television, public health, medical services, education or financial services halts production or halts operations, or the employees affect the normal order of production and other business of an enterprise or public institution that provides public services, or other such circumstance arises, thereby giving rise or potentially giving rise to any of the following consequences, the local people's government may, depending on the actual circumstances, issue an order to the aforementioned enterprise/public institution or employees to halt such act and restore the normal order:

(1) jeopardising public safety;

(2) disrupting the normal social order or the order of people's livelihood; or

(3) another consequence that seriously jeopardises the public interest.

The local administrative department for human resources and social security, relevant government departments, local labour union federation and enterprise representative organisation shall guide and procure the conduct of collective bargaining by the parties in order to defuse the conflict.

Article 38: If a dispute arises in connection with the performance of a collective contract and consultations fail to resolve such dispute, the labour union or enterprise may apply for arbitration or institute a legal action in accordance with the law.

Part Five: Legal liability

Article 39: If a Representative violates Article 15 hereof by divulging trade secrets of the enterprise, causing the enterprise to incur a loss, he/she shall be liable for compensation in accordance with the law. If a criminal offence is constituted, his/her criminal liability shall be pursued in accordance with the law.

Article 40: If a relevant person of an enterprise commits any of the acts set forth in Item (2), (3) or (4) of Article 22 or Item (1) of Article 23 hereof, thereby violating provisions on the administration of law and order, the matter shall be dealt with in accordance with relevant provisions of the PRC Law on the Imposition of Penalties in Connection with the Administration of Law and Order. If a criminal offence is constituted, his/her criminal liability shall be pursued in accordance with the law.

If an employee commits any of the acts set forth in Item (2), (3) or (4) of Article 22 or Item (3) of Article 24 hereof, thereby violating provisions on the administration of law and order, the matter shall be dealt with in accordance with relevant provisions of the PRC Law on the Imposition of Penalties in Connection with the Administration of Law and Order. If a criminal offence is constituted, his/her criminal liability shall be pursued in accordance with the law.

Article 41: If an enterprise or public institution that provides public services or the employees thereof refuse(s) to execute an order issued by the local people's government pursuant to Article 37 hereof, thereby violating provisions on the administration of law and order, the matter shall be dealt with in accordance with relevant provisions of the PRC Law on the Imposition of Penalties in Connection with the Administration of Law and Order.

Article 42: If a member of the working personnel of an enterprise representative organisation fails to perform his/her duties in accordance with the law or jeopardises the lawful rights and interests of the enterprise in the course of collective bargaining work, the enterprise representative organisation shall order him/her to rectify the matter. If the circumstances are serious, he/she shall be dismissed in accordance with the charter of the enterprise representative organisation or disciplined in accordance with the law.

Article 43: If a member of the working personnel of a labour union fails to perform his/her duties in accordance with the law or jeopardises the lawful rights and interests of the employees in the course of collective bargaining work, the labour union at the same level or the labour union at a higher level shall order him/her to rectify the matter. If the circumstances are serious, he/she shall be dismissed in accordance with the Constitution of Chinese Labour Unions or disciplined in accordance with the law. If a criminal offence is constituted, his/her criminal liability shall be pursued in accordance with the law.

Article 44: If a member of the working personnel of a relevant government department is derelict in his/her duties, abuses his/her authority, practises favouritism by committing fraud in the course of collective bargaining work, he/she shall be disciplined by the relevant competent department. If a criminal offence is constituted, his/her criminal liability shall be pursued in accordance with the law.

Part Six: Supplementary provisions

Article 45: Subject to the authorisation and consent of the enterprise, the conduct of collective bargaining on relevant matters and the execution and performance of a collective contract between a (sub-)branch of such enterprise and the employees thereof shall be handled in accordance herewith.

Where public institutions that implement corporate style management and private non-enterprise entities conduct collective bargaining and execute and perform collective contracts, matters shall be handled in accordance herewith.

Article 46: These Regulations shall be effective as of January 1 2015.