Several recurrent employment questions in China have been clarified by recent cases:
1) Are foreign nationals working in China subject to the Chinese employment laws and regulations? A claim by a foreign national in Shanghai for statutory severance pay was upheld against a defense of freedom of contract under the Contract Law of the PRC.
2) What steps must an employer take to ensure that the provisions of it handbook bind its employees? A multi-national company was required to pay RMB 80,000 for wrongfully terminating an employee who had violated a provision in its handbook even though the employee signed an acknowledgement letter because the court found the employee’s signature to be forged.
3) Can a non-compete be enforced against an employee who refuses to accept the non-compete reimbursement following termination? The court upheld enforcement of a non-compete provision where the former employee refused to accept payment, although the liquidated damages stipulated for breaching the non-compete provision were reduced.
4) What is the risk if an employer continues to use the services of an employee after an employment contract expires or is terminated? Continued paid work by an employee after an agreed mutual termination date was held to create a new employment relationship.