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PRC Labour Law - Bitesize

7 August 2013
Mayer Brown JSM Newsletter

Wage Collective Consultation (cont'd)

Will a wage collective contract become effective after it is signed by both parties?

After a wage collective contract has been concluded, it must be submitted by the employer to the local labour authorities for review and examination within 10 days (or such other period depending on the applicable local regulations) of signing by both parties (i.e., the employer and the employees' representative). The purpose of such examination is to ensure compliance with legal requirements. If no objections are raised by the labour authorities, the contract will be effective within 15 days of receipt of the document by the labour authorities. Note that the full text of the contract is required to be publicised to all employees in a timely and appropriate manner after it becomes effective.

How long is the term of a wage collective contract?

The term of a wage collective contract is usually one to three years in duration, which can subsequently be reviewed at either party's request three months before expiry and extended by agreement of the parties.

Can a wage collective contract be amended or terminated prior to expiry of the fixed term?

Yes, a wage collective contract can be amended or terminated prior to expiry of the fixed term by the parties upon mutual agreement. It can also be amended or terminated as a result of circumstances affecting the parties' ability to perform their obligations under the contract, such as bankruptcy, force majeure, or other conditions specified in the agreement.

What are the procedures for dealing with disputes relating to wage collective contracts?

If there is any dispute relating to performance of the wage collective contract, and the parties fail to resolve it through consultation, the parties to the contract may apply to the Labour Dispute Arbitration Commission for arbitration.

What is the relationship between an individual employment contract and a collective contract?

Generally, a collective contract is binding on all employees whereas an individual employment contract is only binding on the individual employee. In addition, the terms and conditions of employment included in an individual employment contract cannot be less favourable to the employee than those provided by a collective contract.

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