Contract Cancellation During the Probation Period Procedures
During the probation period, some employers will cancel an employee’s contract. The terminated employee will lose his or her job and will feel uncomfortable. At this time, the employer's approach is too much, and he wants their rights protected. Then, what should the employer do to cancel the contract during the probation period and how does this affect the foreigner’s legal status in China?
During the probation period, the employer can release the employee based on mutual agreement.
Employee's considerations during the probation period:
1. The time limit for the probation period
If the employee is proven ineligible for the conditions of employment, the employer shall notify the employee before the employee leaves work on the last day of the probationary period. After this time, the employee shall be deemed to have passed the probation and become a regular employee.
It is critical that the employer convincingly documents such termination in writing — in Chinese. If the proof for dismissal is not convincing, an employer will begiving terminated employee incentive to challenge the termination and a good chance of prevailing in a labor arbitration proceeding.
If the company delays notification until the expiration of the probation period, the company will bear the legal consequences arising from there.
2. Financial compensation for the probation period
The employer needs to provide evidence and is not allowed to subjectively determine that the worker does not meet the employment criteria.
First, the employer must prove the employer's employment conditions. For example, the company specifies the terms and standards for recruitment in the recruitment briefing and recruitment information.
Secondly, the employer must prove that the employee is assessed and not qualified. If there is no evidence in this regard, then it is considered illegal dismissal. According to Article 87 of the Labor Contract Law, there should be compensation in the amount of double benefit or the continued performance of the labor contract.
3. Chinese law prohibits an employer from setting a probation period for part-time employees [Article 70].
We would like to remind foreigners holding a visa for China that there is no legal way to work part time.
4. Specifically,
For an employment term of more than three months but less than one year, the probation period cannot be more than one month;
For an employment term of one year or more but less than three years, the probation period cannot exceed two months.
The employer can only use a six-month probation period for an employment term of three years or more or an open-term employment arrangement.
If the employer brings new employees under any of those circumstances, the employer will have to revise the provision.
Under Articles 40 of the Labor Contract Law, an employer may terminate the contract of an employee on probation if:
He or she has fallen ill or sustained a non-work related injury and, at the end of the medical treatment period, can neither engage in the original work nor other work arranged by the employer;
He or she is incompetent and remains incompetent after training or assignment to another post.
When the employer terminates the contract during the probation period, the worker should consult a professional lawyer for a consultation.
China's employment cases are familiar with examples of foreign employers that lost and lost big because they did not understand employee probation periods. Chinese employees know this, and they are quick to sue when terminated during their probation period; as a foreigner, you can also do.
Case Study 1#:
Let's consider a hypothetical based on an amalgamation of some document-based HR audits for Chinese employers. Employer and employee enter into an employment contract that does not specify either a probation period nor a term of employment. The agreement provides for a monthly base salary amount.
For the first six months of work, the employer pays employee an amount less than the base salary amount specified in the contract. The employee later resigns and brings a claim against the employer for the six-month difference between her reduced rate and the contract amount.
Employer argues that no required payment because of aprovision in stating that all new employees have a six month probation period during which they receive a reduced salary.
They did not.
There was no explicit agreement between the parties regarding the probation period.
Under Chinese law, the probation period is not one of the mandatory items in an employment contract.
If an employer wants a probation period to test out a new employee, the employer must clearly describe the probation period in the employee's employment contract. An employer cannot unilaterally impose a probation period on an employee. That means that an employer that wants to pay a reduced rate to a probationary employee must explicitly provide for that in its employment contract.
Case Study 2#:
Employer hires an employee on January 1st with a two-month probation period. The employer then decides to terminate the employee's contract before the employee's probation period runs out in late February so to avoid paying statutory severance. The employer's reason for the termination is that the employee is "just not all that good," and they believe they "can do better." The employee neither failed to follow employer directions, nor did he or she fail to possess the qualifications required for his or her position. In other words, the employer has NO legal basis for terminating the employee. So with the probation period now coming to an end, can the employer go ahead with its planned unilateral termination without having to pay severance?
Probably not.
The employer should know that if they go ahead with the unilateral termination, they will be at risk of being sued for unlawful termination. China is not an employment-at-will jurisdiction, and the probation period is not an exception to this general rule. An employee dismissal during the probation period requires a legally permissible ground, and except for the limited number of grounds permitted under the law, you cannot unilaterally terminate an employee on probation.
What happens if your work permit and resident permit issued are in-process?
In this case, the employer must cancel both the work permit and the residence permit. If it's in-process, then need to wait for its completion and then apply for cancellation.
Why are employers afraid of labor arbitration bureau (劳动仲裁委)?
That statement is valid for the following three reasons:
The labor laws impose stricter rules on companies, and those laws are favorable to workers
In terms of litigation, the burden of proof is on the company, and any mishandling or wrong doing can have direct consequences.
In the event of a lawsuit, the case needs to be made public. This event may affect the company in terms of recruitment, especially when due to unlawful dismissal.
The company may also face repercussions from society, customers, and enterprises, which will damage the corporate image.
Authors:
Are you looking for more useful tips for your life in China? Get in touch with contributors for a consultation and follow us in our WeChat Group to receive the latest news.
Julian (WeChat: julian_beijing) is based in Shanghai but often travels for work and runs a company that works with individuals and organizations doing business between the US, China, and Africa. He has been based in China for a number of years.
Ikky (WeChat: ikky888) is an R&D Manager working in Shanghai. He has been living in China for over 11 years.
Jatin (known by the nickname "Prince Jatin") (WeChat: jatinsoni) is a Multicloud DevOps Engineer working in Shanghai. He has been living in China for over eight years and owns three Indian community WeChat groups known for "Helping Indians" with their specific inquiries.
Disclaimer:
We have written his article based on the gathering and interpretation of laws and regulations, government official websites, and Internet-related knowledge. If you are in a similar situation, please consult government officials or lawyers for a consultation.
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