Crisis Averted

Most labor disputes today are ones involving remuneration. For example, between January and April 2016, Beijing accepted 28,222 labor dispute cases—69% of which involving remuneration, meaning this was the cause of more than 19,000 disputes in just four months in the area.

3. What precautions should companies take to prevent costly disputes or strikes in terminating employment contracts? How should personnel cutbacks be handled?

When dealing with such issues, a company needs to duly handle the following:

(1) When terminating or ending an employment relationship, the company needs a lawful reason to do so. It must also be in accordance with laws, and follow the procedure specified in the employment contract and its internal rules and regulations;

(2) If a large-scale personnel cutback is involved, the company needs to put together a dedicated personnel cutback project committee, prepare response measures and an emergency contingency plan in advance, and formulate a lawful and reasonable cutback plan based on its circumstances and the external environment. It should also provide an open communication channel, solicit opinions from the employees, be patient toward, and have empathy for, the employees, and comfort and care for the employees to the best of its ability. Additionally, the company must prioritize communicating and liaising with the local labor authority, the local labor union and the public security authority, so that it can count on their support in the event of a collective incident;

(3) As different regions in China have varying labor law requirements, the company needs to clearly understand whether there is any special local compensation or other amount that needs to be paid before proceeding with the termination or ending of an employment relationship;

(4) The company needs to keep evidence relating to the termination or ending of the employment relationship, including the written notice; and

(5) It is advisable for the company to engage an attorney before terminating or ending an employment relationship or commencing a personnel cutback project to provide assistance in planning, assessment and legal risk mitigation.

4. How should companies handle strikes?

Neither the PRC Constitution nor the PRC Labor Law specifies that employees have a right to “strike”, however, in practice, “wildcat strikes” by employees do happen. In the event of such a wildcat strike, a company can consider measures such as those listed below:

(1) The company should promptly send a corporate representative to the scene of the strike to meet with the employees and learn their demands. The employees should be asked to promptly choose a representative to discuss their demands with the company. In practice, the employees will usually choose a representative to negotiate with the company. This makes it possible to have the employees causing the commotion go back to work more quickly;

(2) When talking with the employee representative, the company can, while standing firm on principle, appropriately compromise and propose a plan conducive to resolving the collective labor-management dispute;

(3) Once the collective labor-management dispute has subsided, the company shall perform its commitments, so as to avoid reigniting the dispute;

(4) If the company's representative finds that the situation has gotten out of control, the company should promptly make contact with the local labor union and labor authority, requesting that they intervene and reason with the employees. Additionally, it should quickly report the situation to the public security authority. With the intervention of the government authorities, the employees will usually be willing to select a representative to negotiate with the company. At this time, the government authorities will, as an intermediary, attempt to harmonize the ideas of both sides. In practice, the government authorities will usually put pressure on both sides to compromise, so that both parties may quickly reach a settlement and defuse the conflict;

(5) Harmonious employment relationships can reduce labor-management conflicts. Accordingly, the company should establish open communication channels with its employees, promptly address their immediate concerns and fairly and reasonably deal with employee relation issues.

5. What types of employment disputes were most common in the past year? What could companies do to minimize these occurrences?

The most common employment disputes at present are those relating to employment contracts, remuneration and confirmation of employment relationships.

To minimize such disputes, we would recommend that a company should:

(1) Promptly execute an employment contract with an employee before or at the time of his induction;

(2) Carefully approach the termination or ending of an employment contract, assess in advance the legal risks based on the facts and evidence, select the best strategy and resolve the employment relationship between the parties as peacefully as possible;

(3) Ensure all of its internal rules and regulations comply with state and local laws, and are formulated by a democratic procedure, revised in a timely manner and communicated to all of the employees;

(4) Maintain a meticulous and attentive human resources department, and in the course of day-to-day management, collect and record any evidence relating to employment relationship management;

(5) Pay all wages, bonuses, allowances, overtime and other remuneration in full in accordance with the law; and

(6) Carry out all filings for and payment of social insurance and housing reserve contributions for the employees in accordance with the law.

6. What were the main legislative changes affecting employment practices in the past year? Were there any specific local developments?

The main employment-related legislative changes in 2015/2016 are as follows:

(1) Family planning

The amended PRC Population and Family Planning Law implemented on January 1, 2016 expressly provides that the state advocates couples having two children. Couples that have children in compliance with laws and regulations can benefit from extended maternity leave or other benefits in accordance with local regulations.

(2) Labor security violations

The Measures for the Public Announcement of Material Violations of Labor Security (Announcement Measures) will be implemented on January 1, 2017. The Announcement Measures require human resources and social security authorities to publicly announce material violations of labor security laws and regulations, such as “failing to enroll in social insurance in accordance with the law or failing to pay social insurance premiums in accordance with the law, where the circumstances thereof are serious”, that have been investigated and that the authorities have issued decisions thereon. Details to be published include the name and legal representative of the entity that committed such violation.

(3) Labor security compliance

The Measures for Assessing the Integrity Rating of Enterprises on Labor Security Law Abidance (Assessment Measures) will also be implemented on January 1, 2017. The Assessment Measures specify that local human resources and social security authorities at the county level and above are responsible for assessing the integrity rating of enterprises on labor security law compliance and conducting these reviews once a year. The assessment rating will be placed in an enterprise's integrity file on labor security law abidance and retained for at least three years.

(4) Foreigner work permits

The State Administration of Foreign Experts Affairs, Circular on the Issuance of the Implementing Plan for the Pilot Project for the Foreigner Work Permit System (Circular) specifies that, between October 2016 and March 2017, a pilot project for a foreigner work permit system will be launched in places including Beijing, Tianjin, Shanghai and Guangdong. In the pilot regions, the existing “Foreigner Entry and Employment Permit” and “Foreign Expert Work Permit” will be merged into a “Foreigner Work Permit”. Annex 1 of the Circular—the Criteria for Classifying Foreigners Working in China (Trial Implementation)—classifies foreigners who come to China to work into three categories: foreign high-end talent (Type A), foreign professional talent (Type B) and foreign ordinary personnel (Type C). It also subjects them to different administration based on the criteria. The Foreigner Work Permit will be uniformly implemented nationwide from April 1, 2017.

7. What do the reduced social insurance premium requirements mean for companies?

The current decrease of the lower limit for the base figure for the payment of social insurance premiums and the payment percentage can for the current stage reduce labor costs and lighten their financial burdens. However, in general, there is a time limit on the reduced payment percentages, so the reduction of enterprises, costs will also only be temporary.

8. How significant are the new work – related injury insurance rules?

The Opinions on Several Issues Concerning the Implementation of the <Regulations for Work-related Injury Insurance> (2) (Opinions) are only an administrative regulatory document and, as such, cannot bring a major revision to the work-related injury system, so there is no question of a particularly large change. The only thing that the Opinions do is to clarify certain issues that in the past were debated or vague, such as the determination of work-related injury when an employee participates in an activity organized by his employer or is seconded to work elsewhere, and the route going to and from work, for instance.

9. What role does a labor union play? How can companies effectively manage their relationships with the union?

According to the PRC Labor Union Law and the Charter of Chinese Labor Unions, the responsibilities of a labor union mainly include safeguarding the lawful rights and interests of employees, organizing employees to participate in the democratic management of their enterprises, mobilizing employees to actively participate in economic development, instructing employees in continuously enhancing their ideology and morality, technical services and scientific and cultural quality, and motivating employees to participate in cultural, leisure and sports activities. Among these, safeguarding employees' legitimate rights and interests is the most fundamental responsibility of a union.

The union and employer are not in opposition to one another, but rather mutually support and respect each other. An employer maintains its relationship with the labor union through the allocation of funds to it in accordance with the law, recommending appropriate individuals to serve in important positions in the union, strengthening communication with the union and respecting and supporting the union in carrying out legal activities.

10. In the coming year, what employment areas should In-house Legal and HR teams follow up on?

In the coming year, in-house counsel of enterprises need to continue maintaining a close eye on the issuance of laws and regulations relating to employment relationships, as well as the issuance of important local documents. For example, documents that could be issued include, but are not limited to, the Regulations for the Administration of Foreigners Working in China, the Vocational Education Law (Revised), the Unemployment Insurance Regulations (Revised) and the Measures for the Administration of the Mandatory Allocation of Social Insurance Premiums.

Carol (Yeping) Zhu, Partner

Zhong Lun Law Firm

+86 21 6061 3081

[email protected]

Level 10 & 11, Two IFC
No. 8 Century Avenue
Pudong New Area
Shanghai, 200120 PRC

Carol Zhu heads Zhong Lun Law Firm's labor and employment law practice group. Her area of focus includes all aspects of employment-related matters, including the establishment and enforcement of company policies, HR documentation, hiring and termination, employee compensation and benefits, social insurance and equity incentives, data privacy protection, mass redundancies, labor dispatch and transition, cross-border employment issues, labor dispute resolution, employee transition issues in M&A and restructuring, trade union matters, collective bargaining, global mobility and immigration, anti-corruption (including FCPA) investigations and training. Prior to her private practice, Carol had accumulated more than ten years of experience as the head of human resources in Asia and China for several major global companies, where she was responsible for overall HR and employee relations.

Carol graduated from the Fudan University Law School with an LLM degree in international law. She is a member of the National Bar Association of the People's Republic of China. She was named a Leading Employment Lawyer for 2017 and specially recommended for Labor & Employment law in 2016 by Legal 500, and was awarded the China Labor & Employment Lawyer of the Year in 2014 by China Law & Practice.

Kent Woo, Partner

Zhong Lun Law Firm

+86 20 2826 1777

[email protected]

23/F, R&F Center
No. 10 Huaxia Road
TianHe District
Guangzhou, 510623 PRC

Kent Woo graduated from the Sun Yat-sen University School of Law with a degree in international law. He later also received a master's degree in international business law from the University of Manchester. He worked as a legal consultant for a large London-headquartered British law firm in Guangzhou and then as the general counsel for a major US IT company in Beijing. Before joining Zhong Lun, he was a partner in two leading law firms in South China for more than 10 years.

Kent has considerable experience in corporate, IP and commercial transactions in China, with a particular expertise in foreign direct investment. His clients are mainly major corporations from Europe, the U.S., Japan and Hong Kong. He creates client-specific strategies for China market entry, drafting and negotiating all aspects of corporate documentation from the establishment and operation of foreign-invested enterprises to the acquisition of Chinese companies. He speaks fluent English and Chinese.

中伦律师事务所的朱叶萍律师和吴清发律师阐述了企业如何避免引致劳动纠纷的最主要因素、有效处理罢工以及维持良好的雇佣关系。

1. 外资企业在人力资源和员工关系上面对最大的挑战有哪些?

受中国劳动力成本上升、经济增速放缓、经济转型等因素影响，近两年不少外资企业撤离中国或对中国业务进行调整，引发裁员潮。裁员的过程往往十分复杂，涉及人员众多，稍有不慎便可能导致裁员的实体或程序不符合法律要求，并可能引发群体性纠纷。而劳动者的维权意识和法治意识却又前所未有地强。这对企业人力资源和员工关系管理而言无疑是巨大的挑战。

2. 最常见的劳动纠纷源头是什么?

劳动争议目前最多的还是涉及劳动报酬的争议。例如，2016年1至4月，北京市共受理劳动争议案件28222件，其中，涉及劳动报酬的占总数的69%，居各类案件之首，共计19000多件。

3. 在终止劳动合同时, 企业可采取哪些预防措施以避免高昂的纠纷或罢工代价? 应如何处理裁员行动?

用人单位处理这类问题，要做好以下几方面：

(1) 解除、终止劳动关系时要具备合法的理由，并应当依照法律规定、劳动合同和用人单位的内部规章制度规定的程序进行；

(2) 若涉及大规模裁员，需组建裁员项目负责小组，提前准备应对措施和应急预案，并根据用人单位情况和外部环境制定合法、合理的裁员方案，提供畅通的沟通渠道，听取员工意见，要对员工有耐心和同理心，做好员工情绪安抚工作，体现人文关怀。同时，用人单位需要注重与当地劳动行政部门、地区工会以及公安部门的沟通和联络，以便在发生群体性事件时获得支援；

(3) 中国各地在劳动法方面有不同的要求，在解除、终止劳动关系前，要了解清楚当地是否有特殊的补偿或者其它需要支付的费用；

(4) 要保留好解除、终止劳动关系的证据，包括但不限于解除或者终止劳动合同的书面通知等；

(5) 建议用人单位在解除、终止劳动关系以及启动裁员项目之前聘请律师参与，帮助用人单位做好事先规划，评估并防范法律风险。

4. 企业应如何处理罢工?

现行《中华人民共和国宪法》和《中华人民共和国劳动法》并未规定员工有“罢工”的权利，但在实践中确实可能会出现员工“野猫式罢工”。在出现野猫式罢工时，公司可以考虑如下措施：

(1) 公司应尽快派出公司代表去罢工现场与员工见面，了解员工诉求。在与员工见面时，要求员工尽快推举员工代表，由员工代表就员工诉求与公司讨论。实践中，员工通常会推出自己的代表与公司谈判。这样可以迅速使聚集在一起起哄的员工回到各自的工作岗位；

(2) 在与员工代表沟通时，公司在坚持原则的基础上，可以根据情况适当让步，提出有利于解决群体性劳资纠纷事件的对策；

(3) 群体性劳资纠纷事件平息后，公司应履行自己的承诺，避免纠纷再起；

(4) 如果公司代表发现情况不可控，公司应当及时与地区工会以及劳动部门取得联系，要求地区工会及劳动行政部门介入对员工进行劝导，同时迅速向公安部门报警。在政府部门的介入下，员工通常愿意推出代表与公司谈判。此时，政府部门会作为中间人协调双方的意见。实务中，政府通常会迫使双方让步，以使双方快速达成和解，化解冲突；

(5) 和谐的劳动关系会降低劳资双方的冲突，所以，公司应建立与员工通畅的沟通渠道，及时回应员工关切的问题，公平合理地处理员工关系问题。

5. 去年有哪些类型的劳动纠纷是最常见的? 企业可采取什么措施以减低纠纷的发生?

劳动争议目前仍以劳动合同纠纷、追索劳动报酬纠纷和确认劳动关系纠纷为主。

为了减少这些纠纷，建议用人单位做到：

(1) 在员工入职前或入职时及时签署书面劳动合同；

(2) 谨慎对待劳动合同的解除和终止，事先根据事实和证据评估法律风险，选择最佳策略，尽量和平解决双方的劳动关系；

(3) 用人单位制定的内部规章制度内容要符合国家和地方的法律规定，依照民主程序制定，及时更新并告知所有员工；

(4) 人力资源管理要细致周到，在日常管理过程中，要收集和保管好与劳动关系管理有关的各类证据；

(5) 要依法足额支付工资、奖金、津贴、加班费等劳动报酬；

(6) 要依法为员工申报并缴纳社会保险和住房公积金。

6. 去年有哪些影响劳动执法的主要法规动态? 有没有具体的地方法规变更?

2015/2016年劳动方面的主要立法动态：

(1) 计划生育

修订后于2016年1月1日起实施的《中华人民共和国人口与计划生育法》明确规定，国家提倡一对夫妻生育两个子女。符合法律、法规生育子女的夫妻，可以根据地方规定获得延长生育假的奖励或者其他福利待遇。

(2) 劳动保障违法行为

《重大劳动保障违法行为社会公布办法》（“《公布办法》”）将于2017年1月1日起施行。《公布办法》要求人力资源社会保障行政部门对“不依法参加社会保险或者不依法缴纳社会保险费，情节严重的”等已经依法查处并作出处理决定的重大劳动保障违法行为，应当向社会公布，公布的内容包括违法主体的名称和法定代表人等信息。

(3) 劳动保障守法

《企业劳动保障守法诚信等级评价办法》（“《评价办法》”）将于2017年 1月1日起施行。《评价办法》规定，县级以上地方人力资源社会保障行政部门负责企业劳动保障守法诚信等级评价工作，每年开展一次评价。评价等级结果将归入企业劳动保障守法诚信档案，至少保留 3 年。

(4) 外国人来华工作许可

《国家外国专家局关于印发外国人来华工作许可制度试点实施方案的通知》（“《通知》”）规定，2016年10月至2017年3月，北京、天津、上海、广东等地开展外国人来华工作许可制度试点工作。在试点地区，原“外国人入境就业许可”和“外国专家来华工作许可”整合为“外国人来华工作许可”，《通知》的附件1《外国人来华工作分类标准（试行）》把来华工作外国人分为外国高端人才（A 类）、外国专业人才（B 类）、外国普通人员（C 类）三类，按标准实行分类管理。2017年4月1日起，全国统一实施外国人来华工作许可。

7. 社会保险费下调对企业有什么影响?

社会保险费缴费基数下限和缴费比例的阶段性下调，可以阶段性降低用人单位的用工成本，减轻用人单位的资金压力。但缴费比例降低一般是有期限的，所以企业的成本降低也只是阶段性的。

8. 最新的工伤保险意见有多大的重要性?

《关于执行〈工伤保险条例〉若干问题的意见（二）》只是行政规范性文件，不可能对工伤制度进行大的调整，所以谈不上有特别大的变化。该意见只是将以往一些有争议和不明确的问题进行了明确，例如对员工参加用人单位组织的活动、外派到外地工作的工伤认定、上下班路线等与工伤认定有关的问题做了进一步明确。

9. 工会扮演着什么角色? 企业可如何有效管理和工会的关系?

根据《中华人民共和国工会法》和《中国工会章程》的规定，工会的职责主要包括维护员工合法权益，组织员工参与企业的民主管理，动员和组织员工积极参加经济建设，教育员工不断提高思想道德、技术业务和科学文化素质，组织员工开展文娱、体育活动等。其中，维护员工合法权益是工会的基本职责。

工会与用人单位不是对立的，而是相互支持和相互尊重的。用人单位通过依法向工会拨缴经费、推荐适当人选出任工会的重要职务、加强与工会的沟通，以及尊重和支持工会依法开展活动等方式维护与工会的关系。

10.来年, 企业内部法律顾问和人力资源团队应密切关注哪一方面的劳动领域发展?

接下来的一年，企业的内部法律顾问应当继续密切关注和劳动关系有关的法律法规的颁布，以及当地的重要文件的出台。例如，可能会出台的文件包括但不限于：《外国人在中国工作管理条例》、《职业教育法（修订）》、《失业保险条例（修订）》和《社会保险费强制划拨管理办法》等。

朱叶萍 合伙人

中伦律师事务所

+86 21 6061 3081

[email protected]

上海市浦东新区

世纪大道8号

国金中心二期10-11层

邮编：200120

朱叶萍律师是中伦律师事务所劳动法业务组的主管合伙人。朱叶萍律师专攻于劳动人事领域，其工作范围涉及与劳动人事相关的各个方面，其中包括企业规章制度的建立和执行、人力资源管理相关文件的起草和审核、员工的聘用和解除、员工的薪酬福利、社会保险和股权激励、员工的隐私保护、大规模裁员、劳务派遣和转移、跨境劳动人事问题、劳动争议解决、企业收并购和重组中的员工转移问题、工会问题、集体协商、跨国公司全球员工派遣和流动、反腐败（包括FCPA）调查和培训、高级员工的违法犯罪问题，以及人力资源合规尽职调查。在加入律师事务所之前，朱叶萍律师曾在数家跨国公司主管中国及亚太区人力资源管理工作超过10年，全面负责人力资源及员工关系的处理。

朱叶萍律师毕业于复旦大学，取得国际法硕士学位，她是中华人民共和国全国律师协会的会员。以下是她在劳动法领域中获得的荣誉。她被Legal 500评为2017年“年度劳动法领域领先律师和2016年“年度劳动法领域特别推荐劳动律师”，被《China Law & Practice》评为2014年“年度劳动及人力资源杰出律师”。

吴清发 合伙人

中伦律师事务所

+86 20 2826 1777

[email protected]

广州市天河区

珠江新城华夏路10号

富力中心23层

邮编：510623

吴清发律师是中山大学法律系国际法专业的硕士，后又获得英国曼彻斯特大学的国际经济法硕士学位。吴清发律师曾受雇于一家总部在伦敦的大型英国律师事务所在广州工作，任法律顾问。之后，又作为总法务顾问在北京服务于一家主要的美国资讯技术公司，统管其国内法律事务。在加入中伦之前，吴清发律师已经在华南两家知名的律师事务所执业超过十年之久。

吴清发律师在中国公司法，知识产权法和商业交易法方面有丰富的执业经验，尤其熟悉与外商投资有关的业务。他的客户主要是欧美、日本和香港的大型公司。他的业务涉及为客户进入中国市场提供针对性的策略，以及对公司各方面法律事务文件的起草和谈判，包括外商投资企业的设立和经营以及中国企业的收购。吴清发律师中英文均很流利。

Carol (Yeping) Zhu and Kent Woo of Zhong Lun Law Firm explain how companies can avoid the major causes of labor disputes, efficiently handle worker strikes and maintain positive employment relationships.

1. What is the biggest challenge faced by foreign-invested enterprises in human resources and employee relations?

Due to factors such as labor cost increases and an economic slowdown and transformation, a number of foreign-invested enterprises have pulled out of China or made adjustments to their local business in the past two years, triggering a wave of personnel cutbacks. Terminations can be quite complex, often involving a large number of people which, if not handled carefully, can result in the failure of the cutback itself or its process in complying with legal requirements, and thereby result in a collective dispute. Furthermore, the level of workers' awareness of their legal rights is also at an unprecedented high. This undoubtedly poses a huge challenge to companies, management of human resources and employee relations.

2. What is the most common source of labor disputes?