How will the law affect employee contracts?
To employers accustomed to the “at will” system used in the United States, China’s employment environment appears more restrictive. Both the 1995 Labor Law and the LCL stipulate three types of labor contracts: fixed- term, open-ended, and contracts based on the completion of an assignment. An existing MOLSS circular states that in cases where the employee has been with the employer for more than 10 years, and both parties wish to continue the employment contract, an open-ended contract should be granted. In addition, the new law adds a provision that entitles employees to open-ended contracts if they have already signed two fixed-term contracts, regardless of length. The calculation for fixed-term contracts will apply only to contracts signed after January 1, 2008. The LCL also states that if an “employment relationship” exists without a written contract for one year, it is considered an open-ended contract; previous drafts of the law did not include this provision. How will the law af
