How to minimise employment risks

This article is from the Labour & Employment chapter of the 2015 Annual Review and is available for download here.


Heng Ding of Zhong Lun Law Firm explains the biggest employment challenges faced by foreign companies, the most significant labour laws that require attention and how to prevent and manage disputes

1. What is the biggest challenge in human resources and employee relations that foreign companies face?

With the improvement of the legal regime in China (particularly the promulgation and implementation of the PRC Employment Contract Law and relevant complementary laws) and the progressive increase in the awareness of Chinese workers regarding the protection of their rights, foreign-invested enterprises are facing the pressures of increasing labour costs and intensifying worker protection. This forces them to place greater emphasis on labour compliance issues and increase the wages and benefits of workers.

2. What are the most common sources of labour disputes?

Among labour disputes, the most commonly seen are those involving workers' demand for labour remuneration and severance payments when employment relationships end or are terminated. According to the figures released on June 24 2015 by the Beijing Municipal Employment and Public Personnel Dispute Arbitration Committee, of the more than 63,000 arbitration cases on employment and public personnel disputes handled in Beijing on average every year, those involving labour remuneration account for more than half.

In addition, other common reasons for labour disputes include overtime pay, leave, social insurance and work-related injuries.

3. What precautions should companies take to prevent disputes or costly events such as strikes from happening during the termination of employment contracts? How should personnel cutbacks be handled?

When faced with such issues, companies should adopt the practice of pre-event prevention and active response during the event.

(1) Termination of a single employment relationship

Generally, a company should duly carry out the management of employment contracts, and where it is required to execute an employment or renewal contract, do so in a timely manner. When terminating an employment relationship, it needs to have a lawful reason and pay severance pay in accordance with the law. Additionally, it should confirm in advance whether there is any outstanding overtime pay or social insurance premiums.

(2) Personnel cutbacks

When cutting back on personnel, a company must do so in strict accordance with the statutory procedure and file the cutback with the labour department for record purposes. Before record filing, it should communicate well with the labour union and the relevant labour department; and, depending on the specific circumstances of the employees, pay them severance pay in a lawful and reasonable manner, instead of treating everyone the same.

On December 31 2014, the Ministry of Human Resources and Social Security issued the Provisions for Personnel Cutbacks by Enterprises (Draft for Comments), which expressly set forth the procedure for such cutbacks and provides for the protection of employees and relevant legal liability. The period for public comments on the draft has ended, and once it is promulgated, it will have an important guiding effect on how enterprises handle personnel cutbacks.

4. Labour unrest often occurs in the event of a company transition like M&A. What are the steps employers should take in such instances?

When faced with this issue, the enterprise, as employer, should, in formulating the acquisition plan or executing the acquisition agreement, pay attention to the handling of the employment relationships with its employees based on the specific acquisition model. Additionally, it should address the rights and interests of the employees in the acquisition plan or acquisition agreement, e.g. the continuation of years of service. Matters of immediate interest to the employees such as M&A require consultations in advance with the employees in accordance with the Employment Contract Law and their opinions must be listened to.

The enterprise should appreciate the role of the labour union, and fully consult with it on the personnel and employment relationship issues involved in the acquisition so as to resolve any disputes that could arise. Additionally, in practice, the company can communicate with the local labour and public security departments in advance to respond to potential labour protests and/or strikes.

5. What types of employment disputes were most commonly seen in the past year? What could companies do to minimise these?

As mentioned above, the most commonly seen labour disputes were those that arose in connection with the end or termination of employment relationships. In addition, there were disputes related to overtime pay, social insurance, work-related injuries and leave.

When faced with these issues, a company should properly establish and manage its internal systems, execute written employment contracts and update them in a timely manner so as to avoid being required to pay two times the wages for failure to execute an employment contract. It should improve its rules and regulations, ensure that its employee handbook, rules and regulations are lawful and valid and that its employees are familiar with their contents. The various departments of the enterprise should strengthen their evaluations of the employees and collect relevant evidence. The company should also strengthen communications between its personnel department and workers, and duly carry out the advance notification and consultation work related to the termination of employment relationships.

The company should pay social insurance premiums in accordance with the law for all of its employees regardless of whether the employees have undertaken that the employer does not need to pay them. The payment of the social insurance premiums should commence from the date of induction, i.e. including the probation period.

6. What were the main legislative developments that affected hiring and employment practices in the past year?

The main legislative developments relating to labour in 2014 are as follows:

(1) Amendment to the Work Safety Law

On August 31 2014, the Standing Committee of the National People's Congress adopted the Standing Committee of the National People's Congress, Decision to Amend the PRC Work Safety Law. This is the first time that the Work Safety Law has been revised since its promulgation 12 years ago, with the amendments focusing on the protection of temporarily placed workers and interns. The manufacturing or business entity is required to incorporate the temporary workers into the uniform management of its permanent employees and they should enjoy all of the rights of permanent employees specified in the Work Safety Law. Furthermore, interns should be provided with the pertinent work safety education and training, as well as the necessary labour protection articles.

(2) Definition of work-related injury for insurance cases

The Supreme People's Court, Provisions on Several Issues Concerning the Trial of Administrative Work-related Injury Insurance Cases (Provisions) go into further detail on issues such as “on the way to or from work”, with “reasonable time” and “reasonable route” becoming key factors to determining work-related injuries. They specify that where the social insurance administrative department determines the circumstances to be “on the way to or from work”, the people's court should uphold this determination.

The Provisions provide for the five relatively special work-related injury liability subjects of dual employment relationships, temporary placement, secondment, subcontracting and attached relationships. They also provide that after an entity that bears work-related injury insurance liability has assumed the compensation liability or a social insurance handling agency has paid work-related insurance benefits from the work-related injury insurance fund, it has the right to recover the same from the relevant organisation, entity or individual.

(3) Guidelines for hiring temporary workers

On January 26 2014, the Ministry of Human Resources and Social Security promulgated the Tentative Provisions on Temporary Placement (Tentative Provisions), signifying that the temporary placement system finally has dedicated legal provisions.

The Tentative Provisions require employers of temporarily placed workers to use such workers only for temporary, auxiliary or substitute positions. The number of such temporarily placed workers may not exceed 10% of their total workforces.

7. How have workers in Guangdong reacted to the new collective bargaining rules?

Guangdong Province adopted the Guangdong Province, Enterprise Collective Contract Regulations (Regulations) on September 25 2014. The Regulations expressly specify that enterprises establish and improve collective bargaining systems in accordance with the law. They provide that an enterprise and its employees may carry out bargaining on an equal basis on matters such as labour remuneration, working hours, rest and leave, work safety and hygiene, as well as insurance and benefits. Additionally, they set forth relevant provisions on the selection of the representatives of the parties to the collective bargaining, the bargaining procedure and legal liability.

The University Town sanitation workers' strike and rights protection action occurred in Guangzhou between the time the Regulations were formulated and promulgated. During the action, a total of nine workers' general meetings and over 10 workers representatives' meetings were held, and five rounds of collective bargaining were conducted, amply demonstrating the function and importance of collective bargaining.

8. What role does the labour union play? How can companies effectively manage their relationships with the union?

Pursuant to laws and regulations such as the Labour Law, the Employment Contract Law and the Trade Union Law, a labour union represents and safeguards the lawful rights and interests of workers; monitors the compliance with labour laws and regulations by the employer; assists and guides workers in lawfully entering into and performing employment contracts with their employer and establishes a collective bargaining mechanism with the employer to safeguard the lawful rights and interests of the workers. Additionally, a labour union acts as a bridge between the company and its employees and provides them relevant information about the company's rules as well as laws and regulations. It reflects the voice of the workers to the company's management.

The relationship between the enterprise and the labour union is not one of confrontation, as due handling by the enterprise of this relationship is conducive to communicating with the employees, promoting the implementation of relevant policies and reducing the potential for labour disputes, protests and strikes. In practice, the election of the labour union's chairman is of crucial importance, as the election of a chairman friendly to the company and management can have the effect of halving the effort required to handle the relationship with employees.

9. In the upcoming year, what employment areas should in-house teams follow up on?

During the coming year, they should closely follow the regulations on employment relationships that will be issued, as the promulgation of these regulations will have a major impact on how enterprises handle employment relationships.

Among these, those deserving the most attention will be the Measures for the Administration of Investment by Basic Old-age Insurance Funds, the Measures for the Administration of Social Insurance Registration, the Provisions for Personnel Cutbacks by Enterprises and the Provisions for the Administration of Special Working Hours.


Author biography

Heng Ding
Partner

Heng Ding is a partner in Zhong Lun Law Firm's Shanghai office. He studied at Tianjin Foreign Studies University and China Law School of Renmin University where he received a BA in literature and LLM, respectively. He has previously worked for King & Wood Mallesons (during which time he spent six months in the legal department of the Tokyo headquarters of Marubeni Corporation) and Tsuyuki & Akazawa Law Office (during which time he spent nine months in the legal department of the Tokyo headquarters of Toyota Tsusho Corporation). Heng has extensive experience providing legal services relating to M&A, foreign investment, anti-monopoly and anti-unfair competition matters, corporate compliance, labour law, dispute resolution, etc. to a number of well-known multinational corporations and state-owned enterprises.

中伦律师事务所的丁恒律师阐述了外资企业在劳动方面面对的最大挑战，需注意的最主要劳动法规，以及如何防止和处理纠纷。

1. 在人力资源和劳动关系方面，外资企业面对的最大挑战是什么？

随着中国法制的健全（特别是劳动合同法及相关配套法律的公布实施）以及中国劳动者的维权意识逐渐提高，外商投资企业目前面临着人工费增长、劳动者保护力度增强的压力，使其不得不更加注重用工的合规性问题，提升劳动者的工资、福利。

2. 劳动争议最常见的源由是什么？

在劳动争议中，最常见的是终止、解除劳动关系时劳动者所提出的劳动报酬和经济补偿金相关的纠纷。从北京市劳动人事争议仲裁委员会2015年6月24日发布的数据来看，北京市年均处理的劳动人事争议仲裁案件6.3万余件当中，涉及劳动报酬的占一半以上。

此外，常见的争议原因还包括因加班费、休假、社保及工伤产生的劳动纠纷。

3. 在解除劳动合同时，企业应采取什么措施防止发生争议或付高代价的事件如罢工？应如何处理裁员事件？

公司在面对此问题，应当采取事前预防、事中积极应对的做法。

(1) 关于单个解除劳动关系

公司应当在平时做好劳动合同的管理工作，对于应当签订劳动合同的及时签订劳动合同，应当续签的及时续签。解除劳动关系时要有合法的理由，并依法支付经济补偿金；同时应当事先确认是否存在未支付的加班费和未缴纳的社保费。

(2) 关于裁员

公司在裁员时，必须严格按照法定程序进行，报劳动部门备案；在报备之前应当做好与工会及相关劳动部门的沟通工作；视乎员工的具体情况，合法、合理地支付经济补偿金，不可一视而论。

人力资源和社会保障部在2014年12月31日发布了《企业裁减人员规定（征求意见稿）》，明确规定了裁员的程序、对员工的保护以及相关的法律责任。该征求意见稿的公开征求期间已结束，其颁布将会对企业如何处理裁员问题起到重要的指导作用。

4. 在企业发生转变事件如并购时，往往会出现员工抗议，在这些事件中雇主应采取什么措施?

面对此问题，作为雇主的企业应当在制定并购计划或签订并购协议时，注意根据不同的并购模式，处理员工的劳动关系。同时在并购计划或协议中规定员工的权益，如工作年限的承继等事项。关系到员工切身利益的并购等事项，需要根据劳动合同法事先与员工进行协商，听取员工的意见。

企业应当重视工会的作用，与工会就并购中的人事及劳动关系问题进行充分协商，以求妥善处理可能产生的纠纷。同时在实务中，公司可提前与当地劳动部门及公安部门做好沟通，应对可能发生的劳工抗议、罢工事件。

5. 过去一年内，最常见的是哪一类劳动争议？ 企业如何可减少这些事件发生？

如上所述，最常见的劳动纠纷类型是伴随终止、解除劳动关系所产生纠纷。此外还有因加班费、社保、工伤、休假产生的纠纷。

面对这些问题，公司应当做好内部制度建设和管理，及时签订书面的劳动合同，及时更新，避免因没有签订劳动合同而需支付双倍工资。完善公司的规章制度，确保员工手册与规章制度合法有效，确保员工对其内容的知悉；企业的各部门加强对员工的考核，收集相关证据；加强人事部门与劳动者的沟通，做好解除劳动关系的提前通知和协商工作。

关于社保的缴纳，无论员工是否承诺无需公司缴纳社保，公司都应当为所有员工依法缴纳社保，且该社保的缴纳应当自入职之日起算，即包括试用期。

6. 过去一年内，有什么主要法规出台是对聘用及其他人力资源操作方面产生影响的？

2014年劳动方面的主要立法动态有以下几点：

(1)《安全生产法》的修订

2014年8月31日，全国人大常委会通过了《全国人民代表大会常务委员会关于修改〈中华人民共和国安全生产法〉的决定》。这是《安全生产法》自颁布12年以来首次修订，该修订注重对派遣劳动者、实习生的保护。对于被派遣劳动者，生产经营单位应当将其纳入本单位从业人员统一管理，被派遣劳动者享有《安全生产法》规定的从业人员的所有权利。此外，应当对实习学生进行相应的安全生产教育和培训，提供必要的劳动防护用品。

(2) 保险案件中的工伤认定

《最高人民法院关于审理工伤保险行政案件若干问题的规定》对工伤认定中的“上下班途中”等问题做出了进一步细化，“合理时间”和“合理路线”成为其中的关键。规定指出，对社会保险行政部门认定为“上下班途中”的情形，人民法院应予支持。

对双重劳动关系、派遣、指派、转包和挂靠关系等五类比较特殊的工伤保险责任主体作了规定，同时规定承担工伤保险责任的单位承担赔偿责任或者社会保险经办机构从工伤保险基金支付工伤保险待遇后，有权向相关组织、单位和个人追偿。

(3) 对劳务派遣的指引

2014年1月26日，人社部发布《劳务派遣暂行规定》，该规定的出台意味着劳务派遣制度终于有了专门的法律条文。

该规定要求，用工单位只能在临时性、辅助性或替代性岗位上使用被派遣劳动者。被派遣劳动者数量不能超过其用工总量的10%。

7. 广东员工对新的集体谈判法规有什么反应？

2014年9月25日，广东省通过了《广东省企业集体合同条例》。条例中明确规定企业依法建立健全集体协商制度。该条例规定职工方与企业可就劳动报酬、工作时间、休息休假、劳动安全卫生、保险福利等事项进行平等协商，同时对于集体协商的双方代表的选定、协商程序以及法律责任都有相应规定。

在本条例制定到颁布期间，广州市发生了大学城环卫工人罢工维权事件。本次事件总共召开了9次工人大会和10余次工人代表会议，并进行了长达5轮的集体协商谈判，充分体现了集体协商的作用和重要性。

8. 工会扮演着什么角色？企业如何能有效地管理和工会的关系？

根据《劳动法》、《劳动合同法》、《工会法》等法律法规的规定，职工工会代表和维护劳动者的合法权益；对用人单位遵守劳动法律、法规的情况进行监督；帮助、指导劳动者与用人单位依法订立和履行劳动合同，并与用人单位建立集体协商机制，维护劳动者的合法权益。同时，工会也扮演着公司与员工之间桥梁的作用，通过对公司制度、法律法规的宣传，向员工提供相关资讯；并将员工的声音反映到公司的管理层。

企业与工会并非是敌对关系，企业处理好与工会的关系，有利于与员工进行沟通，推进相关决策的实施，减少劳动争议、抗议、罢工事件发生的可能性。在实务中，工会主席的选举至关重要，选举对公司及管理层抱有好感的工会主席，对于处理与员工关系会起到事半功倍的效果。

9. 来年在劳动方面企业内部法律顾问有什么需要跟进的?

接下来的一年中，应当密切关注即将出台的劳动关系相关规定，这些法规的颁布将会对企业如何处理劳动关系产生巨大影响。

其中，《基本养老金保险基金投资管理办法》、《社会保险登记管理办法》、《企业裁减人员规定》及《特殊工时管理规定》应是值得关注的重点。


作者简历

丁恒
合伙人

丁恒律师，中伦律师事务所上海办公室合伙人。先后就读于天津外国语大学、中国人民大学法学院，分获文学学士和法律硕士。曾先后在金杜律师事务所（期间6个月在丸红株式会社东京总部法务部）、日本露木赤泽事务所（期间9个月在丰田通商株式会社东京总部法务部）工作。丁恒律师拥有为多家著名跨国公司及国有企业就并购、外商投资、反垄断与反不正当竞争、公司合规、劳动法、争议解决等方面提供相关法律服务的丰富经验。