I have recently been focusing on Beijing with my China employment law posts because Beijing recently came out with new employment laws. The new laws, entitled the Responses to Several Issues Regarding Application of Law in Trial of Labor Disputes (关于审理劳动争议案件法律适用问题的解答)(“the Responses”) were released earlier this year to clarify a number of key employment law issues and to ensure a fairer and more effective and consistent adjudication of labor disputes in Beijing. In this post, I focus on how the Responses lower the standards for terminating an employee during his or her probation period. A China employer is permitted to use “failure to meet the conditions of employment during the probation period” as a basis to unilaterally terminate an employee without having to pay him or her severance. But what exactly does this mean for Beijing employers today?
The Responses make clear Beijing employers must inform their probationary employees of the conditions of employment during the recruitment process, and must also inform them of the factual and legal basis for termination upon dismissal. For a unilateral termination of a probationary employee to be lawful, the employer must be able to prove how the employee failed to meet the applicable employment conditions. This is nothing new. However, the Responses go on to say that in determining whether an employee meets the conditions of employment, the standard may be lower, to the extent appropriate, for a probationary employee than for a regular employee. The Responses also then list the following circumstances under which an employee may be considered to have failed to meet the recruitment requirements:
- The employee violates the principle of good faith, and conceals or makes up facts concerning himself or herself which will affect the performance of the employment contract, including providing fake diplomas or certificates, fake identification documentations (PRC national ID cards, passports, etc.), making statements regarding his or her experiences, expertise, skills, performances, heath or other pieces of information that are significantly contrary to the truth;
- The employee commits work errors, which are defined in accordance with the relevant employment laws, the employer’s rules and regulations, or the employment contract;
- The employee fails to fulfill the terms and conditions agreed by the parties which determine whether the employee passes the probation period.
Employee probation is one of the most often misunderstood China employment law issues. Many employers (and often to their detriment) wrongly believe terminating a probationary employee is much easier than terminating an employee who has completed the probation period. Though this is not the case, the Responses do provide that the standard of review on whether a probationary employee meets the conditions of employment can be reasonably (whatever that means?) lower than the standard of review for an employee during the “regular” term of employment. Our China employment lawyers always advise our clients to specify the conditions of employment in a clear writing (in Chinese!) so the employee understands the employer’s expectations from day one. In addition, employers should preserve good evidence that such conditions are communicated to their employees. None of this advice has changed despite Beijing’s new employment laws and in fact, Beijing-based employers should consider specifying in their rules and regulations and/or their employment contracts exactly what work errors can lead to termination during probation. But be careful in drafting such provisions because my law firm’s employer audits often find employers write these provisions in a way that violates applicable laws!
Notwithstanding Beijing’s new employer-friendly law on probationary employees, China employers who treat the probation period as an at-will employment period do so at their own peril. Note this law is applicable only in Beijing, and in practice, many arbitrators/judges in many places (including Beijing, no doubt) treat termination of an employee during the probation period no differently than termination during the regular employment term.
For more on Beijing’s new laws, check out my post on how to terminate an employee on the basis of there having been a “significant changes in objective circumstances, and my post on how the new rule permits Beijing employers to terminate an employee who seriously violates labor disciplines or professional ethics and my post on the new rules on reinstating employees to their old jobs when an employer’s termination decision has been deemed unlawful.