Employment termination is complicated in the PRC and employers should exercise caution when sacking employees. Employers may dismiss employees without notice only when the employee:
- is dismissed during the statutory probation period;
- has seriously violated workplace rules;
- causes great losses to the employer due to serious dereliction of duty, embezzlement or another criminal offence; or
- is being investigated for a criminal offence.
- Employers may otherwise dismiss employees, by first giving 30 days' notice only when the employee:
- is unable to take up his original or any new work upon returning from non-work-related medical treatment for illness or injury;
- is unqualified for his job and remains unqualified even after receiving training or an adjustment to another work post; and
- is unable to agree with the employer, after mutual consultation, to modify his labour contract when the purpose for which he was originally hired was significantly changed or no longer exists.
Employers may not dismiss employees when they:
- suffer from a work-related sickness or injury that has been medically confirmed as having completely or partially caused by the employee to lose the ability to work;
- suffer from an illness or injury for which medical treatment within a specified period is allowed; or
- are pregnant, on maternity leave or within the specified period for nursing.
The Provisions Concerning Economic Redundancy in Enterprises (effective January 1, 1995) allow employees to be laid-off or dismissed for economic reasons, such as when the employer:
- faces bankruptcy;
- undergoes statutory reorganization Court order; or
- falls into 'serious operational difficulty' as defined by the local government.
Employers however must give priority to laid-off employees if they recruit again within six months after a layoff.
