China: Beijing High People’s Court and Beijing Labour and Personnel Dispute Arbitration Commission Issued Answers to Labour Dispute Cases (Part 1)

On 30 April 2024, Beijing High People’s Court and Beijing Labour and Personnel Dispute Arbitration Commission issued answers to Labour Dispute Cases (Part 1) (“Answers”).  The Answers cover a total of 92 practical questions and answers on labour dispute cases in seven areas, including the scope of acceptance and jurisdiction of labour dispute cases, the convergence of arbitration and adjudication of labour dispute cases, the identification of the employment relationship and responsible parties, the establishment of the employment contract, the fulfilment and change of the employment contract, the termination of the employment contract, and other aspects of the labour dispute cases.

The Answers provide clarification on the status of residents from Hong Kong, Macau, and Taiwan who have not obtained the required work permit for Hong Kong, Macau, and Taiwan residents. Their relationships with employers prior to 28 July 2018 are not considered employment relationships, and the employment contracts they signed during that period are deemed invalid.  However, relationships established on or after 28 July 2018 can be recognized as valid employment relationships.

This distinction is due to the issuance of the Decision on Cancelling a Batch of Administrative Licensing Matters (“Decision”) by the State Council on 28 July 2018. This Decision abolished the work permit requirement for residents of Hong Kong, Macau, and Taiwan. Consequently, the establishment of employment relationships for individuals from these regions no longer necessitates obtaining a work permit as a prerequisite.  For foreigners or stateless individuals who have not obtained the Foreigner’s Work Permit, the employment contracts they have signed are also considered invalid.  If they have already rendered services, the employer is obligated to pay them remuneration according to the contract provisions.

Key Action Points

The Answers offer guidance on numerous complex issues encountered during the adjudication of labour dispute cases. In particular, employers shall note that when it comes to employing foreigners or residents from Hong Kong, Macau, and Taiwan, they need to consider whether a work permit is required, whether social security contributions should be made, and what differences exist regarding the application of employment laws.