On January 1, 2021, China’s long-awaited Civil Code (“the Civil Code”) took effect. It not only codifies the fundamental rules of law on civil and commercial matters but also strengthens the protection of citizens’ personal rights such as the rights of privacy and protection of personal information.
Having superseded the General Provisions of the PRC Civil Law, the PRC Marriage Law, the PRC Guarantee Law, the PRC Contract Law, the PRC Property Law and the PRC Tort Liability Law, the Civil Code has many implications for foreign businesses with China operations. Among other things, to comply with the Civil Code, you as a China employer need to revisit the language of your company’s anti-sexual harassment policies.
Though the #MeToo campaign in China is relatively smaller and quieter than its counterparts elsewhere, it has widespread popular support, including increasingly from the courts. Foreign businesses, especially in the current political environment, should take extra care to be compliant with all relevant laws and regulations.
Writing an Anti-Sexual Harassment Policy
You need to review your company’s anti-sexual harassment policy to ensure it reflects your business culture and is aligned with applicable law. If you don’t have an existing policy document on this, you should create one as soon as possible.
In China, employees can terminate their employment contracts and secure severance against their employer if the employer fails to provide the labor protections or abide by the work conditions set forth in the employment contract.
Employers are obligated to prevent and stop sexual harassment against their employees in the workplace, and an employee has a legal claim against an employer that fails to take action after the employee complains of sexual harassment.
Not only should your anti-sexual harassment policy be tailored specifically for China (i.e. not a straight translation from your home country policy), but also it should be tailored specifically to the laws of the locale (e.g. province, municipality) in which your China employees are based.
In other words, using an Employee Handbook written years ago without confirming it is up to date is a recipe for disaster. Replying on an Employee Handbook for Shenzhen that is nothing more than a Chinese translation of your U.S. (or any other non-PRC jurisdiction) employee manual is another disaster waiting to happen.
One more potential disaster we see from time to time is an Employee Handbook created from a Chinese-language template that is not customized for the locale or the industry or the employer, which is then badly translated into English so no one making the decisions even knows what it says.
Why should you go to all this trouble? An anti-sexual harassment policy not tailored to the employer’s particular locale can be deemed unenforceable. Foreign companies often get sued for following an employment policy that is not compliant with local laws or customs.
Be Specific About Inappropriate Behavior and Its Consequences
A single sentence in your Employee Handbook stating that your company does not allow sexual harassment will not be nearly enough to support you in court, or with arbitrators or the employment authorities. Your policy needs to be very clear about what acts are prohibited, and about what disciplinary actions will be taken in response to prohibited acts.
We see one-sentence sexual harassment prohibitions in U.S. employee handbooks quite often, but Chinese authorities do not like this kind of ambiguity because they think it gives employers too much power over employees. Employers’ rules and policies are generally expected to provide clear and explicit behavioral guidance to employees.
If an employer’s rules or policies are too complicated to understand, an employee may argue that he or she does not understand them, and a court may side with the employee, ruling that it is not reasonable for an employer to hold employees to such complicated rules.
Establishing a Legal Basis for Disciplinary Action
Because China is not an employment-at-will country, you as employer generally need a specific contractual/legal basis to discipline or terminate an employee. The legal basis for a China employer being able to discipline or terminate an employee who engages in sexual harassment would be serious breach of employer rules and regulations.
This means that if you do not clearly enumerate your anti-sexual harassment rules and policies in your written employment documents, you will likely lack a written basis for punishing an offender, and if you appear in front of a judge/arbitrator, you will have a hard time justifying any disciplinary decision.
Because China’s employment laws are so different, and the fundamental principles of the laws are so different and the Chinese culture is so different, attempting to simply translate an employer policy from any non-China jurisdiction is never a good idea. And in addition to compliance with the new Civil Code, China employers must comply with all relevant local employment laws and regulations.
Bottom Line: With geopolitical tensions high, the Chinese government is looking more carefully than ever at foreign companies doing business in China. Companies not in compliance with China’s employment laws will inevitably be found out, with profound legal consequences. Have your China employment lawyer Check and update your company’s anti-sexual harassment policies NOW to make sure they are in good shape.