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PwC,Shanghai*StainlessEquipmentCo.LabourContractsReviewofCompliancewithLabourLawsandLocalRegulations,HumanResourcesComplianceReview,-,TableofContents,ProjectObjectivesandScopeIntroductionExecutiveSummaryKeyFindingsofComplianceReview,-,ProjectObjectivesandScopeToreviewthecompliancestatusofthefiveemployeeslabourcontractsandtheemployeehandbookprovidedbyShanghai*StainlessEquipmentCo.Toaddressthekeyfindingsandprovideoursuggestionsforfurtheractions.,-,Introduction,ChinaLabourLawandtheLabourContractLaw,whichbecameeffectivefromJanuary1,2008,arethegeneralguidanceandsta*rdsfornationwideemploymentpractice.CompaniesinChinamustcomplywiththeminimumrequirementsdescribedintheaforementionedlawsandregulationswhileformulatingthecompanysHRpolicies.ThelocallabourregulationsofShanghaicitywillalsoneedtobeconsideredaspartofinthecompliancereview.ThisreviewisconductedbasedonthefollowingemploymentrelateddocumentsprovidedbytheShanghai*StainlessEquipmentCo.(“*”):Fiveemployeeslabourcontracts,includingtheGMscontractEmployeehandbook,-,ExecutiveSummary,Afterreviewingthefiveemploymentcontractsandemployeehandbook,wefoundsomeareasthatdonotcomplywiththenewChinaLabourContractLaw,nationallabourlaworothernationwideorlocallabourregulations.Therearesevenmainnon-compliedareaswhich*shouldconsidertorectify:,Jobchangesshouldbemutuallyagreedbetweentheemployerandemployee.Thetradeunionoremployeerepresentativecongressshouldbeinvolvedindiscussionforanyjob/policychanges.Onemonthsnoticeperiodisthestatutoryrequirementforbothemployeeandemployertoterminatethelabourcontract.Theemployercanonlysuspendthepositioniftheemployeeisrecruitedformilitaryservicesorunderotherlegalobligations.Duringthesuspensionperiod,theemployershallpaythestatutorypensionfortheemployeeuntilhisreturn.Iftheemployeeisnotqualifiedforhiscurrentposition,theemployershouldarrangetrainingorofferingotherjobopportunityratherthanimmediatelyredu*ncy.Severancepayisrequiredforsomecasesalthoughtheterminationisinitiatedbytheemployee.Overtimecompensationshouldbecalculatedbasedonactualtime.Leavepoliciesshouldbeincompliancewiththenationalregulations.,-,Keyfindingsofcompliancereview,-,Keyfindingsofcompliancereview,-,Keyfindingsofcompliancereview,-,Keyfindingsofcompliancereview,-,Keyfindingsofcompliancereview,Note:*1Eldermarriage:Forfemaleemployeeswhogetmarriedovertheageof23.Formaleemployeeswhogetmarriedovertheageof25.*2Latebirth:Femaleemployeesgivebirthovertheageof24.,-,Keyfindingsofcompliancereview,-,AppendixI,Normalterminationconditions:Theemployerterminatesthelabourcontractuponmutualagreementwiththeemployee.Thelabourcontractisafixed-termcontractthatendsuponexpiration,unlesstheemployeedoesnotagreetorenewthecontracteventhoughtheofferingsarethesameasorbetterthanthosestipulatedinthecurrentcontract.Thelabourcontractendsinthecircumstancesthattheemployerisdeclaredbankruptcyandtheemployerhasitsbusinesslicenserevoked,isorderedtoclose,ortheemployerdecidesonearlyliquidation.Terminationswitheither30dayspriornoticeperiodoronemonthsalary:Theemployeecannotperformneithertheoriginalworknortheotherworkarrangedbytheemployerafterasetperiodofmedicalcareforanillnessornon-work-relatedinjury.Theemployeeisincompetentandremainsincompetentaftertrainingand/orjobchanges.Theemployerandtheemployeecannotagreeontherevisedcontracttermsafternegotiation,iftheoriginalcontractisvalidduetoanymajorchangesofobjectiveconditions.,Theemployershouldpayterminationseverancetotheemployeeunderthefollowingcircumstances:,Reductioninforce:Ifanyofthefollowingcircumstancesobstructimplementationofthelabourcontractandmakeitnecessarytoreducetheworkforceby20personsormoreorbyanumberofpersonsthatislessthan20butaccountsfor10percentormoreofthetotalnumberoftheenterprisesemployees,theemployershallexplainthecircumstancestoitstradeunionortoallofitsemployees30daysinadvance,anditmayreducetheworkforceafterconsideringtheopinionsofthelabourunionortheemployeesandsubsequentlyreportingtheworkforcereductionplantothelabouradministrationdepartment:restructuringpursuanttotheEnterpriseBankruptcyLaw;seriousdifficultiesinproductionand/orbusinessoperations;staffreductionisstillnecessaryaftermodificationofcontractduetochangesintheen
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