Chapter IV

Revocation and Termination of a Labor Contract

Article 36 An employing unit and a worker may revoke the labor contract if they reach consensus on the matter through consultation.

Article 37 A worker may have the labor contract revoked by giving a written notification to the employing unit 30 days in advance. During the probation period, a worker may have the labor contract revoked by notifying the employing unit of his intention three days in advance.

Article 38 A worker may have the labor contract revoked if the employing unit is found in any of the following circumstances:

(1) failing to provide occupational protection or working conditions as agreed upon in the labor contract;

(2) failing to pay labor remuneration on time and in full;

(3) failing to pay the social insurance premiums for the worker in accordance with law;

(4) having rules and regulations that are at variance with laws or regulations, thereby impairing the worker’s rights and interests;

(5) invalidating the labor contract as a result of one of the circumstances specified in the first paragraph of Article 26 of this Law; or

(6) other circumstances in which a worker may have the labor contract revoked as provided for by laws or administrative regulations.

If an employing unit forces a person to work by resorting to violence, intimidation or illegal restriction of personal freedom, or if it gives instructions in violation of rules and regulations or gives peremptory orders to the worker to perform hazardous operations, which endanger his personal safety, the latter may revoke the labor contract forthwith without notifying the employing unit of the matter in advance.

Article 39 The employing unit may have the labor contract revoked if a worker is found in any of the following circumstances:

(1) being proved unqualified for recruitment during the probation period;

(2) seriously violating the rules and regulations of the employing unit;

(3) causing major losses to the employing unit due to serious dereliction of duty or engagement in malpractices for personal gain;

(4) concurrently establishing a labor relationship with another employing unit, which seriously affects the accomplishment of the task of the original employing unit, or refusing to rectify after the original employing unit brings the matter to his attention;

(5) invalidating the labor contract as a result of the circumstance specified in Subparagraph (1) of the first paragraph of Article 26 of this Law; or

(6) being investigated for criminal responsibility in accordance with law.

Article 40 In one of the following circumstances, an employing unit may revoke the labor contract, if it notifies in writing the worker of its intention 30 days in advance or after paying him an extra one month salary:

(1) The worker is unable to take up his original work or any other work arranged by the employing unit on the expiration of the specified period of medical treatment for illness or for injury incurred when not at work;

(2) The worker is incompetent for the post and remains incompetent after receiving a training or being assigned to another post; or

(3) The objective conditions taken as the basis for conclusion of the contract have greatly changed, so that the original labor contract cannot be performed and, after consultation between the employing unit and the worker, no agreement is reached on modification of the contents of the labor contract.

Article 41 If, in any of the following circumstances, an employing unit needs to cut employment by more than 20 persons, or by less than 20 persons, which, however, accounts for more than 10 per cent of the total number of the enterprise’s employees, it may do so after it explains the situation to the trade union or all of its employees 30 days in advance, solicits opinions from among them and submit its plan for cutting employment to the administrative department of labor:

(1) The enterprise is to undergo reorganization pursuant to the provisions of the Law on Enterprise Bankruptcy;

(2) The enterprise is in dire straits in production and management;

(3) The enterprise changes its line of production, introduces a major technological updating or adjusts its business method, and, after modification of the labor contracts, still needs to reduce its personnel; or

(4) The objective economic conditions taken as the basis for conclusion of the labor contracts have greatly changed, so that the original labor contracts cannot be performed.

When cutting employment, the employing unit shall continue to employ the following persons by giving priority to them:

(1) persons who have concluded fixed-term labor contracts for a relatively long term with the employing unit;

(2) persons who have concluded open-ended labor contracts with the employing unit; and

(3) persons none of whose other family members has a job or who have an elder or minor depending on his support.

If an employing unit that has cut its employment pursuant to the provisions in the first paragraph of this Article goes to recruit employees anew within six months, it shall give notification to the laid off persons and, under equal conditions, recruit them before others.