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LABOUR REGULATIONS GOVERNING THE SPECIAL ECONOMIC ZONES IN GUANGDONG PROVINCE
(Valid From:1988.10.01)

CONTENTS

CHAPTER I GENERAL PRINCIPLES

CHAPTER II LABOUR CONTRACTS

CHAPTER III EMPLOYEE RECRUITMENT, TRANSFER, DISMISSAL AND RESIGNATION

CHAPTER IV WORK HOURS, REST HOURS AND HOLIDAYS

CHAPTER V LABOUR REMUNERATION

CHAPTER VI VOCATIONAL AND TECHNICAL TRAINING

CHAPTER VII LABOUR DISCIPLINE

CHAPTER VIII SOCIAL LABOUR INSURANCE AND WORK SAFETY AND HYGIENE

CHAPTER IX TRADE UNIONS AND DEMOCRATIC CONTROL

CHAPTER X HANDLING OF LABOUR DISPUTES

CHAPTER XI LEGAL LIABILITY

CHAPTER XII SUPPLEMENTARY PRINCIPLES

CHAPTER I GENERAL PRINCIPLES

Article 1. These Regulations are formulated in accordance with the Constitution of the People's Republic of China and other relevant laws and statutory regulations, in order to facilitate the development of the Shenzhen, Zhuhai and Shantou Special Economic Zones (hereinafter referred to as Special Zones), to protect the legal rights and interests of staff and workers (including, throughout these Regulations, part-time workers) and to safeguard the right of autonomy of employer units in the employment of personnel.

Article 2. These Regulations shall apply to all enterprises in the Special Zones and to all their staff and workers.

Administration of workers recruited by State organs, social groups and institutions in the Special Zones shall also be handled in accordance with the provisions of these Regulations.

The various units specified in the previous two paragraphs shall be referred to as employer units and staff and workers shall be jointly referred to as employees.

Article 3. The labour contract system shall be implemented when an employer unit recruits and employee.

Article 4. The Special Zones shall establish labour market in order to regulate the supply and demand situation as regards the labour force and to allow a system of mutual selection between employer units and employees.

Article 5. Employer units shall strengthen labour protection measures, improve labour conditions and safeguard the safety and health of employees.

Article 6. The Special Zones shall establish an employee social labour insurance system. Employer units shall ensure that all employees have social labour insurance cover in accordance with relevant regulations.

Article 7. The Shenzhen Municipal Labour Bureau, the Zhuhai Municipal Labour Bureau and the Shantou Special Economic Zone Labour Bureau (hereinafter referred to as the Municipal (Special Zone) Labour Bureaus) shall be the administrative organs in charge of labour matters within their respective Special Zone and shall be responsible for organising the implementation of these Regulations and for supervising and inspecting their application.

District labour bureaus under the municipal jurisdiction of Shenzhen Municipality and Zhuhai Municipality (hereinafter referred to as District Labour Bureaus under Municipal Jurisdiction) shall be the administrative organs in charge of labour matters within their respective districts.

Article 8. The Municipal (Special Zone) Labour Bureaus shall designate relevant departments to establish employment introduction organs and shall organise the training of persons awaiting employment and handle social labour insurance cover for employees for items such as old age, illness, work injuries and unemployment.

CHAPTER II LABOUR CONTRACTS

Article 9. A labour contract shall refer to the agreement made between an employer unit and an employee to establish a work-based relationship. When an employer unit recruits an employee, a written labour contract shall be signed by the two parties, unless the law stipulate otherwise.

Article 10. A labour contract shall comply with the provisions of the law and statutory regulations and shall support the principles of equality, voluntary participation and the reaching of unanimity through consultation. On its signing in accordance with the law, a labour contract shall immediately receive the protection of the law and shall become legally binding on both parties. Neither party shall be permitted to amend or dissolve such a contract without authorisation.

Article 11. A labour contract shall include the following content:

(1) production (or work tasks) to be completed;

(2) duration of the probationary period and contract period;

(3) labour conditions;

(4) labour discipline;

(5) labour remuneration;

(6) labour insurance and welfare benefits;

(7) liability for breach of contract;

(8) other items which both parties agree need to be included.

Article 12. If an employer unit, after obtaining the approval of its higher level organ in charge or its board of directors, changes its line of business or revises production (or work) tasks or if there is a change of circumstance, the two parties to a labour contract may decide through consultation to amend the relevant items of content in the already signed contract.

Article 13. A labour contract may be dissolved in any of the following instances:

(1) when both parties agree unanimously;

(2) when the provisions of Articles 24 and 25 of these Regulations are met;

(3) when, on the expiry of an employee's probationary term, the employee is unable to meet the required standards for employment or is unwilling to take on the position;

(4) when an employee with an illness (not including an occupational illness) or a non work-related injury is, after undergoing medical treatment and returning to work or after a change to his work station, still unable to undertake normal work;

(5) when a nearly bankrupt enterprise undergoes a period of official rectification and needs to cut the number of its employees;

(6) when there is a surplus of labour due to changes to an enterprise's production, business or technical conditions and the Municipal (Special Zone) Labour Bureau confirms that there is no way of arranging the redistribution of the labour force.

When dissolving a labour contract, the provisions of the contract shall be implemented. After dissolving a labour contract, the employer unit shall promptly advise the enterprise trade union and shall report the details of the case to the Municipal (Special Zone) Labour Bureau or the District Labour Bureau under Municipal Jurisdiction.

Article 14. If an enterprise is declared bankrupt, the labour contract signed between the enterprise and an employee shall be dissolved automatically.

Article 15. If an employee undergoes labour re-education or is the subject of a criminal sentence, the labour contract signed between the employee and the employer unit shall be dissolved automatically.

Article 16. A clause of a labour contract shall be deemed to be invalid in any of the following instances:

(1) where there is a violation of the law or statutory regulations which infringes on the fundamental rights of the employer unit or employee;

(2) where there is an obvious lack of fairness.

The administrative organs in charge of labour matters and the people's courts shall have the authority to confirm and handle matters regarding the invalidation of a labour contract clause.

Article 17. If the invalidation of a labour contract clause results in damaging consequences, the party at fault shall compensate the other party for its losses.

Article 18. After an invalid clause in a labour contract has been amended and the change verified and approved by the administrative organ in charge of labour matter, the two parties shall implement the contract.

CHAPTER III EMPLOYEE RECRUITMENT, TRANSFER, DISMISSAL AND RESIGNATION

Article 19. An employer unit may base its determination of the number of employees it recruits on production (work) requirements.

An employer unit may of its own accord recruit Special Zone residents and residents of the urban district of the Special Zone municipality.

If a foreign investment enterprise or an enterprise invested in and established by a Hong Kong, Macao or Taiwanese economic organisation or individual is unable to employ sufficient personnel from within the Special Zone, it may recruit personnel from other regions in China. The Municipal (Special Zone) Labour Bureau and the relevant local labour departments shall jointly organise, co-ordinate and provide the necessary services. The approval of the Municipal (Special Zone) Labour Bureau shall first be obtained if other employer units want to recruit employees from other regions within China.

Article 20. When recruiting personnel, an employer unit shall publicly announce the recruitment and through comprehensive examination shall select the best qualified personnel.

After employing personnel an employer unit shall complete the relevant procedure with the Municipal (Special Zone) Labour Bureau or relevant designated departments.

Article 21. Recruitment of person less than 16 years of age shall be strictly prohibited.

If it is especially necessary in such fields as entertainment, physical training and arts and crafts to recruit persons less than 16 years of age, the approval of the Municipal (Special Zone) Labour Bureau shall first be obtained.

Article 22. Persons commencing employment for the first time under the labour contract system shall be subject to a probationary period of between three and six months.

Article 23. The transfer of employees shall be handled in accordance with the relevant provisions of the Municipal People's Government of the Special Zone districts (Shantou Special Economic zone Administrative Committee).

Article 24. An employer unit may dismiss an employee who fails to change his attitude after undergoing re-education or receiving an administrative penalty as a result of him having committed one of the following acts:

(1) seriously violating labour discipline or affecting production or work procedures;

(2) violating operating rules, damaging equipment or tools or wasting raw materials or energy, resulting in an economic loss;

(3) displaying a bad attitude towards customers or undermining the interests of consumers;

(4) being involved in illegal acts such as corruption, stealing, gambling or graft in cases where it is not considered necessary to pursue criminal liability;

(5) groundlessly causing a disturbance, fighting, seriously affecting social order or being guilty of other serious offences.

Article 25. An employee may resign in any of the following instances:

(1) if the special field allocated does not suit and the employee is unable to make use of special technical skills;

(2) if an employee's moral integrity is insulted by the party in charge of the employer unit;

(3) if an employer unit fails to pay wages for two consecutive months;

(4) if an employer unit fails to fulfil the labor contract or infringes on the legal rights and interest of an employee;

(5) if working conditions are poor and present a serious danger to the safety and health of employees;

(6) if an employee passes, at his own expense, the entrance examination of a school of the level of a secondary specialist school or above;

(7) if the employee is leaving to settle in the districts of Hong Kong, Macao, or Taiwan or abroad.

Article 26. An employer unit shall issue an allowance to employees in the following instances:

(1) if a labour contract is terminated on the expiry of the contract term;

(2) if a labour contract is dissolved in accordance with the provisions of items (1), (4), (5) or (6) of Article 13 of these Regulations;

(3) if a labour contract is dissolved in accordance with the provisions of Article 25 of these Regulations (if due to non-payment of wages, the amount owing, plus interest, shall also be paid);

(4) other genuine reasons.

Calculation of the amount of the allowance shall be based on the employee's years of service with the employer unit. It the case of at least one year of service, the average monthly wage or the employee for the year in which the contract is dissolved shall be paid for each year of service. In the case of at least six months but less than one year of service, calculations shall be based on the yearly wage amount and in the case of service of less than six months, an amount equal to half of the employee's average monthly wage shall be paid.

Article 27. An employer unit shall not pay an allowance to employees whose labour contracts are dissolved in accordance with the provisions of item (3) of Article 13, Article 15 or Article 24 of these Regulations.

Article 28. An employer unit shall not be permitted to dismiss an employee during the contract term in any of the following instances;

(1) when an employee has an occupational illness or work-related injury;

(2) when an employee is undergoing medical treatment (of a maximum of one year) for an illness (not including an occupational illness) or a non work-related injury;

(3) when a woman employee is pregnant or on maternity or nursing leave;

(4) when an employee is visiting relatives in the districts of Hong Kong, Macao or Taiwan or abroad during a designated holiday period.

Article 29. The other party shall be advised one month in advance if an employer unit decides to dismiss an employee or an employee decides to resign.

CHAPTER IV WORK HOURS, REST HOURS AND HOLIDAYS

Article 30. An employee shall work a maximum of six days a week for a maximum of eight hours a day. A system for the comprehensive calculation of work hours shall be implemented and work hours shall not exceed 48 hours a week. In the case of special types of work, such as those involving contact with poisons or other harmful conditions, the number of work hours per day shall be reduced accordingly.

Work hours need not meet the restrictions of the previous paragraph if a person's duties are not confined to fixed work hours or if the employee works under a system of irregular work days.

Article 31. If an employer unit is unable to interrupt production (work) operations, or if it is necessary to make emergency repairs on equipment or to complete an urgent production task, extra shifts or extra hours may be worked, but no person may work more than 48 hours of overtime a month or work more than 4 hours overtime after each shift.

If the amount of overtime to be worked exceeds the limit stipulated in the previous paragraph, the agreement of the employee shall first be obtained, as well as the approval of the competent department or the Municipal (Special Zone) Labour Bureau or District Labour Bureau under Municipal Jurisdiction.

Article 32. If an employer unit organises extra shifts or extra work hours, overtime shall be paid to employees in accordance with the following standards:

(1) 200% of the average daily or hourly rate as per the employee's wage for that month shall be paid on official holidays or for an extra shift or extra hours worked between 10 p.m. and 6 a.m. the next day;

(2) 150% of the average daily or hourly rate as per the employee's wage for that month shall be paid when an extra shift or extra hours are worked at time other than those stated above.

If, after working an extra shift or extra hours, an employee requests compensatory leave, the employer unit may allow the employee to take leave equivalent to the length of time worked and in such a case shall not be required to pay the employee overtime pay.

Article 33. An employer unit shall pay a night shift allowance to employees who work at night.

Night work shall refer to the shift worked from 10p.m. to 6a.m. the next day.

Article 34. Wages shall be paid on official public holidays stipulated by the State.

If rest days happen to be official public holidays, compensatory leave shall be awarded at a later date.

Article 35. An employer unit shall make arrangements to allow an employee to take the following leave:

(1) leave to visit relatives;

(2) bereavement leave to attend the funeral of a directly-related family member;

(3) marriage leave;

(4) childbirth leave for female employees and preferential treatment leave for those who have children at a later age and those who only have one child;

(5) leave to undergo a sterilisation operation;

(6) annual leave.

Length of holidays and the amount of wages and welfare benefits paid shall be determined in accordance with State regulations for items (1), (2) and (3) and in accordance with the Regulations of Guangdong Province or the respective Special Zone Municipality for items (4), (5) and (6).

CHAPTER V LABOUR REMUNERATION

Article 36. The wages of a person employed by a State organ, social group or institution shall be determined by the employer unit in accordance with the relevant provisions of the respective Municipal People's Government (Shantou Special Economic Zone Administrative Committee) and based on the person's work position, duties, level of technical understanding, nature of the work (business) and their merits and accomplishments.

Article 37. The wage of an employee of a State-owned enterprises shall fluctuate in accordance with the economic performance of the enterprise and the work contribution of the employee. After the higher level department in charge of an enterprise has examined and verified the total wage base figure, total wage fluctuation range and profit distribution target, the details shall be sent to the Municipal (Special Zone) Labour Bureau for its records.

A State-owned enterprise shall itself determine the wage distribution method used to pay its employees.

Article 38. A collectively owned enterprise, private enterprise, foreign investment enterprise or enterprise invested in and established by an economic organisation or individual from Hong Kong, Macao or Taiwan shall itself determine the wage format, wage standards and method of distribution it uses, on the condition that the provisions of State laws and statutory regulations are met.

Article 39. Minimum wage standards for work undertaken in the Special Zones during various periods shall be determined by the Municipal People's Government of the respective Special Zone (Shantou Special Economic Zone Administrative Committee) and shall be promulgated and implemented by the Municipal (Special Zone) Labour Bureau. Individual monthly wages paid to employees each month by employer units may not be less than the prescribed minimum wage standard.

Article 40. An employer unit shall issue wages at least once a month. A date shall be fixed and the issue of wages on that date shall be strictly implemented. If payment is not made by the stipulated date, the employee shall be awarded compensation equivalent to 1% of the wage owed for each day after the 6th day in arrears.

Article 41. An employer unit shall issue a work suspension allowance of it suspends its operations.

CHAPTER VI VOCATIONAL AND TECHNICAL TRAINING

Article 42. An employer shall be obliged to train employees and employees shall have the right and obligation to participate in vocational and technical training. Vocational and technical training shall primarily include pre-employment training, trade or profession transfer training and in-service training.

Article 43. The relevant departments of the Municipal (Special Zone) Labour Bureau or the District Labour Bureau under Municipal Jurisdiction shall organise and manage pre-employment training for persons awaiting employment. Those persons who meet examination requirements after undergoing training shall be issued with a graduation (course completion) certificate.

Article 44. In the case of persons awaiting employment as a result of the termination or dissolution of their labour contract, enterprise bankruptcy or dismissal, the relevant departments of the Municipal (Special Zone) Labour Bureau or the District Labour Bureau under Municipal Jurisdiction shall be responsible for organising trade or profession transfer training. Training cost shall be listed as expenses of the unemployment insurance fund.

Article 45. Employer units shall be responsible for organising in-service training and training cost shall be met by the employer unit.

Article 46. The Municipal (Special Zone) Labour Bureau shall be responsible for examining, verifying the proficiency of, and issuing certificates to, worker-technicians. Proficiency standards shall be determined in accordance with the Technical Grading Standards for Workers, promulgated by various competent State Council department. Proficiency assessment measures shall be implemented in accordance with relevant State, Provincial and Municipal (Special Zone) Regulations.

Article 47. The Municipal (Special Zone) Labour Bureaus and relevant departments shall improve their control of Special Zone technical schools so as to provide employer units with qualified technical personnel.

CHAPTER VII LABOUR DISCIPLINE

Article 48. In order to improve labour discipline and to safeguard production order and the work sequence, an employer unit shall implement a system of rules and regulations, such as work rules and award and penalty measures, in accordance with relevant State legislation. Employer units and employees shall jointly comply with such a system.

Article 49. The work rules shall clearly stipulate the fundamental duties to be fulfilled by the employer unit and employee. The main content shall include:

(1) compliance with legislation on labour and other relevant regulations;

(2) strict implementation of labour discipline, improved cooperation and joint completion of production (work) plans;

(3) measures for production (work) rationalisation;

(4) improvement of the suitability of working conditions so as to assist employees to complete production (work) tasks;

(5) protection of the employer's property;

(6) strict maintenance of employer confidentiality.

Article 50. An employer unit shall, in accordance with its award and penalty measures, issue awards to employees who observe labour discipline, complete production (work) tasks and achieve exemplary work performances.

If an employee who violates labour discipline fails to change his attitude following criticism and re-education, the employer unit may impose a penalty in accordance with award and penalty measures.

CHAPTER VIII SOCIAL LABOUR INSURANCE AND WORK SAFETY AND HYGIENE

Article 51. Social labour insurance shall include medical treatment insurance and work-related injury insurance for an employee during periods of employment, unemployment insurance during periods of awaiting employment and retirement insurance during the period after retirement.

Article 52. Employer units and employees must participate in social labour insurance. Insurance premiums shall be paid in accordance with regulations so as to ensure that employees receive a certain amount of material security during their old age, or if injured at work, are ill or awaiting employment.

Article 53. Employer units and employees shall pay the various insurance premiums each month. Payment shall be made by the last day of each month. An additional late payment fee shall be charged if payment is overdue.

Article 54. The social labour insurance fund administration department shall pay the various insurance premiums on behalf of the employees, in accordance with relevant regulations.

Article 55. The Municipal (Special Zone) finance and audit departments shall supervise the management and use of the social labour insurance fund.

Article 56. Measures governing work safety and hygiene for employer units and employees shall be implemented in accordance with relevant State regulations and the Regulations of Guangdong Province on Work Safety and Hygiene.

CHAPTER IX TRADE UNIONS AND DEMOCRATIC CONTROL

Article 57. Employees shall have the right to establish trade union organisations in accordance with the Trade Union Law of the People's Republic of China and the Regulations on Trade Unions in Enterprises in the Special Economic Zones in Guangdong Province and to hold activities pursuant to the provisions of State laws and statutory regulations. Employer units shall support the work of trade unions in accordance with the law.

CHAPTER X HANDLING OF LABOUR DISPUTES

Article 58. An employer unit may establish a labour dispute mediation group which will be responsible for mediating in labour disputes within the enterprise.

The Municipal (Special Zone) Labour Bureaus shall establish labour dispute arbitration committees which will hear labour dispute cases.

Article 59. If consultation and mediation fail to resolve a labour dispute, either party to the disputes shall be entitled to request arbitration from the Municipal (Special Zone) Labour Bureau's labour dispute arbitration committee. If there is still disagreement over the arbitration decision, either party may initiate legal proceedings in the people's court.

Article 60. Detailed procedures and measures for handling a labour dispute shall be implemented in accordance with the provisions of the State Council promulgated Provisional Regulations governing the Handling of Labour Disputes in State-run Enterprises and the Guangdong Provincial People's Government promulgated Detailed Implementing Rule governing the Handling of Labour Disputes in State-run Enterprises in Guangdong Province.

CHAPTER XI LEGAL LIABILITY

Article 61. If an employer unit violate the provisions of these Regulations when recruiting personnel, in addition to being ordered to dismiss all personnel recruited irregularly, the employer unit shall be fined and shall be liable for the dismissed personnel's travelling expenses and living expenses en route.

Article 62. If an employer unit violates the provisions of these Regulations by groundlessly dismissing an employee or infringing on the personal rights of an employee, the person responsible shall be subject to criticism and re-education, or shall receive an administrative penalty or monetary fine, depending on the seriousness of the case. If the act constitutes a crime, criminal liability shall be pursued in accordance with the law.

Article 63. If an employer unit violates the provisions of these Regulations by embezzling a portion of an employee's wages, the employer unit shall compensate the employee for the economic loss and shall receive a fine.

Article 64. If a social labour insurance fund administration department violates the insurance fund management system and misappropriates social labour insurance fund money, the persons in charge and those directly responsible shall receive administrative penalties, depending on the seriousness of the case. If the act constitutes a crime, criminal liability shall be pursued in accordance with the law.

Article 65. The Municipal (Special Zone) Labour Bureau, in conjunction with the relevant competent department, shall handle matters regarding the imposing of fines on employer units and individuals. In the case of an administrative penalty being imposed on an individual, the Municipal (Special Zone) Labour Bureau, in conjunction with the relevant competent department, shall make a submission to the department in charge of the affairs of the particular individual for a ruling and implementation of the penalty.

Article 66. If the party concerned disagrees with the administrative penalty or fine imposed, it may, within 15 days of receiving the penalty notice, apply to the higher level organ of the penalty dispensing department for reconsideration of the case of may file a suit in the people's court. If the party fails to request reconsideration of the case or to initiate legal proceedings and refuses to comply with the penalty decision within the time limit prescribed, the penalty dispensing department shall apply to the people's court for enforcement.

CHAPTER XII SUPPLEMENTARY PRINCIPLES

Article 67. Subject to an employer unit complying with the provisions of State laws and statutory regulations, the employer unit itself may decide matters such as employee recruitment, dismissal, resignation, remuneration, awards and penalties, welfare and social insurance for its employees of foreign nationality and those from Hong Kong, Macao and Taiwan and these details shall be clearly stated in the labour contracts signed between the two parties.

Article 68. The Municipal People's Governments of Shenzhen, Zhuhai and Shantou may formulate detailed implementing measures in accordance with these Regulations and shall report the details to the Standing Committee of the Guangdong Provincial People's Congress and the Guangdong Provincial People's Government for their record.

Article 69. These Regulations shall take effect from 1 October 1988. The Provisional Regulations on Labour Management and Wages in the Enterprises in the Special Economic Zones of Guangdong Province, adopted 17 November 1981 by the Standing Committee of the 5th Guangdong Provincial People's Congress, shall be annulled simultaneously.


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