Laying off an employer in China is rarely easy. Even if there is no crisis situation When talking about the economic recession Laying off employees is much more subtle. Unprecedented developments in three years in China due to the COVID-19 pandemic. This leaves multinational companies operating locally in China with significant challenges. This includes the need to properly manage labor relations with local employees. In this article, we outline the essential aspects of dismissal according to the laws of the People's Republic of China. Including reasons and procedures for termination. Compensation calculation and some practical issues when laying off employees during the pandemic.

Reasons and procedures for employer termination
Under the Labor Contract Law of the People's Republic of China Employers can fire employees only in situations stipulated by law. and to the extent that a labor union is established within the employer's organization. Advance notice must be given to such trade unions for unilateral termination of the employment relationship by the employer. Below we have set out the most important situations in which an employer can legally terminate an employee's employment.

mutual agreement
The employer and employee can mutually agree to terminate the employment contract.

Termination of employment by giving 30 days' advance notice or paying salary in lieu of such notice.
An employer may terminate an employee by giving 30 days' notice or one month's salary in lieu of such notice if ("Article 40 Circumstances" under the Labor Contract Law of the People's Republic of China):

The objective situation has changed so much that the original employment contract cannot be fulfilled and an agreement between the employer and employee on amending the employment contract cannot be reached.
The employee cannot return to his or her original job or any other job provided by the employer after the specified medical treatment period has elapsed due to illness or injury that occurred while not working, and
The employee is incompetent in the position and remains incompetent even after training or another position.
Termination due to employee's fault
The Employment Contracts Act allows employers to fire employees without notice or compensation if the employee:

Not meeting the recruitment conditions during the probationary period
Seriously conflicts with the employer's internal rules and policies.
Dishonesty or negligence in performing duties which causes serious harm to the interests of the employer.
Fraudulently induce an employer to hire you, for example by fraud, deception, or duress.
being hired by another employer at the same time, which is a serious obstacle to the performance of one's duties or he or she refuses to correct the situation after receiving a request from the employer; or
convicted of a criminal offense
mass layoffs
If it is a result of bankruptcy restructuring Operational problems Transfer of property or changes in work methods, etc. Employment contracts with more than 20 employees or more than 10% of the total number of employees (whichever is lower) must be terminated. The employer must inform the union or all employees of the company of the termination plan at least 30 days in advance of such termination. and after receiving opinions from all trade unions or employees Report proposed layoffs to the local government. Labor officials

Termination due to voluntary bankruptcy of the employer
If the employer decides to close the business before the end of the term The employment contract with the employee will end. In this situation Employers are required to complete the voluntary liquidation process in accordance with law. and notify employees in advance before deciding to close the business Since the liquidation process can take a long time (several months), in practice employers usually negotiate with the employee and cancel the employment contract with the employee in advance, either by mutual agreement or by giving 30 days' notice. The notice period or One month's salary paid

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