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- Human Resources and Payroll in China 2016-2017 (5th Edition)
During the probation period, the employer may dismiss the employee if he/she is found to not
meet the requirements for the position. The burden is on the employer to prove this. (Read more
in section 4.1)
Note: An employer cannot make an employee take a new probation period, for example, after promotion or when
the company has been merged or acquired by an investor.
Non-competition Clauses
The non-competition clause, which aims to prevent an employee from working for a competitor
after terminating the labor contract, is usually used only for senior positions and can be signed for
a maximum period of two years. Companies are obligated to continue paying a proportion of the
employee’s salary after their departure from the company in order tomaintain the effectiveness of the
non-competition agreement. There is no unified standard about the amount of the compensation.
Employers are advised to make an agreement with their employees or consult with the local labor
bureau in charge.
Confidentiality Clauses
The confidentiality clause, which normally covers corporate secrets, may include terms relating to
the scope of the secret, the confidentiality period, the secret-keeping method, as well as the legal
liabilities of divulging the secret. To be noted, the confidentiality clause must be made with the
agreement of both the employer and the employee. That is, the employee shall not be obliged by
the confidentiality clause if it is made by the employer unilaterally.
Company Rulebook
Any company with over ten employees is recommended to create a company rulebook, which
provides supplemental explanations concerning mandatory terms, and makes it easier to
demonstrate an employee has broken a company rule.
The contents of the rulebook will vary per industry. Manufacturing companies will want to focus on
issues relating to promptness, break lengths, safety requirements, etc. Business process
Maximum Probation Period by Contract Term
Contract Term
Maximum Probation Period
Less than 3 months
None
3 months to 1 year
1 month
1 – 3 years
2 months
3+ years or non-fixed term contract
6 months