(Enacted as of May 10, 1995)
Article 1
In order to clarify responsibilities in the compensation of losses from violating relevant labor contract stipulations under the Labor Law, safeguard the legal rights of both parties involved in a labor contract, these Measures are formulated in accordance with the relevant provisions of the Labor Law of the People's Republic of China.
Article 2
The employing unit which inflicts losses upon its laborers under one of the following circumstances, shall compensate the laborers losses:
(1) The employing unit deliberately delays the signing of labor contracts, including its deliberate refusal to lay down labor contracts with new recruits according to relevant regulations, and its deliberate delay in renewing contracts when they expire;
(2) Because of reasons for which the employing unit is responsible, invalid or partially invalid labor contracts are signed;
(3) The employing unit, in violation of relevant regulations or the agreements reached in the labor contract, encroaches upon the legitimate rights of women and minor employees and workers; and
(4) The employing unit, in violation of relevant regulations or the agreements reached in the labor contract, unduly dissolves the labor contracts.
Article 3
Compensation for losses resulting from violations of the Article 2 of these Measures should be done according to the following provisions:
(1) For violations causing losses to the wage income of laborers, the employing unit shall make good the laborers' salary payment they deserve, in addition to paying them a compensation fee equivalent to 25 per cent of their salaries;
(2) For violations causing losses to the labor protection treatment of the laborers, the employing unit shall replenish the laborers' labor protection subsidies and articles, in accordance with relevant State regulations;
(3) For violations causing losses to the laborers' vocational injury and medical-care treatment, the employing unit shall, in accordance with relevant State regulations, provide the laborers with vocational injury and medical-care treatment they deserve, in addition to paying them a compensation fee equivalent to 25 per cent of the laborer's medical treatment expenses;
(4) For violations causing losses to the health of the women and minor employees and workers, the employing unit shall provide them with vocational injury and medical-care treatment in accordance with relevant State regulations, in addition to paying them a compensation fee equivalent to 25 per cent of their medical treatment expenses;
(5) The employing unit shall pay their laborers other fees of compensation as stipulated in their labor contracts.
Article 4
Laborers, who dissolve the labor contracts in violation of relevant State regulations or agreements contained in their labor contract, shall compensate the employing unit for its following losses:
(1) Expenditure incurred by the employing unit in recruiting the laborers;
(2) Expenditures incurred by the employing unit in the training of the laborers, unless the two parties involved have agreed to deal with the issue otherwise;
(3) Direct economic losses in production, business and operation caused by the laborers' dissolution of their labor contract; and
(4) Other fees of compensation as stipulated in the labor contracts.
Article 5
If laborers violate the secrecy provisions as stipulated in the labor contracts, thereby inflicting economic losses upon the employing unit, they shall compensate the employing unit in accordance with the Article 20 of the Law Against Unfair Competition of the People's Republic of China.
Article 6
If an employing unit recruits a laborer, who has failed to terminate the labor contract with his/her previous employing unit and, thereby, inflicted economic losses to his/her previous employing unit, not only the laborer shall be responsible for direct compensation but the new employing unit shall also be responsible for making related compensation to the previous employing unit. The sum of related compensation should not be lower than 70 per cent of the total economic losses sustained therefor by the previous employing unit. The previous employing unit should be compensated for its following losses:
(1) Direct economic losses in production, business and operation;
(2) Economic losses caused by the laborers' exposure of commercial secrets of his/her previous employing unit.
In compensating the losses as stipulated in Item (2) in this article, the provisions of Article 20 of the Law Against Unfair Competition of the People's Republic of China should apply.
Article 7
In case of any disputes which may arise with regard to above-mentioned compensation of losses, they should be handled according to relevant State regulations on the settlement of labor disputes.
Article 8
These Measures shall come into effect as of the date of promulgation.
