{"id":5325,"date":"2025-10-29T06:08:57","date_gmt":"2025-10-29T06:08:57","guid":{"rendered":"http:\/\/ms-advisory.flow-work.online\/?p=5325"},"modified":"2026-04-27T18:21:51","modified_gmt":"2026-04-27T18:21:51","slug":"china-employee-termination","status":"publish","type":"post","link":"https:\/\/msadvisory.com\/china-employee-termination\/","title":{"rendered":"Employee Termination China"},"content":{"rendered":"\t\t
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According to local labor regulations, employees in China have certain employment rights when an employer wishes to conduct layoffs, restructure, or liquidate a company<\/a>. These rights do not guarantee job retention but require a notice period and adherence to specific procedures. This article discusses when employee termination in China can occur and the circumstances and grounds for mass termination.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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<\/i><\/p>\n Read more \"right\"\"right\"<\/a>\n <\/div>\n <\/div>\n \t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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When Can Employee Termination Occur?<\/h2>

Employee termination in China can occur in two primary ways: upon expiration of the labor contract or through early termination. Employers must pay severance<\/a> upon expiration of the labor contract or in cases of early termination. Labor issues often arise during early termination.<\/p>

An employer cannot unilaterally terminate an employment contract without fault or at will unless certain statutory grounds exist (see Article 40 of the Labour Contract Law<\/a>). Termination generally falls under the following categories:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Termination Type<\/strong><\/th>Description<\/strong><\/th><\/tr><\/thead>
Mutual Agreement<\/strong><\/td>Both parties agree to terminate the contract. Severance payment is common.<\/td><\/tr>
Fault\/Misconduct<\/strong><\/td>Termination due to employee’s breach of contract or misconduct. No severance is required.<\/td><\/tr>
Without Fault<\/strong><\/td>Termination for reasons unrelated to misconduct. Requires 30 days notice or payment in lieu and severance.<\/td><\/tr>
Wrongful Termination<\/strong><\/td>Unilateral termination without legal grounds. This can lead to disputes and compensation.<\/td><\/tr><\/tbody><\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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Termination by Mutual Agreement<\/h3>

This occurs when an employer and employee mutually agree to terminate the relationship. Employers often provide severance payments to secure the employee’s consent.<\/p>

Termination Due to Fault or Misconduct<\/h3>

No severance payment is required when an employer terminates the contract due to an employee’s material breach or misconduct. Examples include:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Grounds for Termination<\/strong><\/th>\nDescription<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Probation Failure<\/strong><\/td>\nMinimum job requirements not met during probation.<\/td>\n<\/tr>\n
Neglect of Duties<\/strong><\/td>\nSerious neglect or damage to company interests.<\/td>\n<\/tr>\n
Rule Violations<\/strong><\/td>\nViolation of company rules and procedures.<\/td>\n<\/tr>\n
Conflict of Interest<\/strong><\/td>\nEmployment with another company affects the current job.<\/td>\n<\/tr>\n
Deception or Coercion<\/strong><\/td>\nActs against employer’s interests.<\/td>\n<\/tr>\n
Criminal Activity<\/strong><\/td>\nCommission of a crime.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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Termination Without Fault<\/h3>

This occurs when an employer terminates the contract for reasons unrelated to misconduct. Employers must provide at least 30 days’ notice or pay one month’s<\/a> salary instead of notice, along with severance pay.<\/p>

Severance Payment Following Termination<\/h3>

In China, severance pay is calculated based on the number of years of service, as set out in Article 47 of the Labour Contract Law<\/a>. The standard formula is one month’s salary for each full year of service. Any period less than a full year but more than six months is considered one year. Half a month’s salary is paid if the period is less than six months.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Years of Service<\/strong><\/th>\nSeverance Payment<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Less than 6 months<\/td>\nHalf a month’s salary<\/td>\n<\/tr>\n
6 months to 1 year<\/td>\nOne month’s salary<\/td>\n<\/tr>\n
Every additional year<\/td>\nOne month’s salary per year<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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Protected Employees<\/h3>

Certain employees cannot be terminated without fault, including pregnant women and those who have lost the capacity to work due to injury or disease contracted during employment (see Article 42 Labour Contract Law<\/a>). Additional circumstances include:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Protected Circumstances<\/strong><\/th>\nDescription<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Medical Treatment<\/strong><\/td>\nInability to work post-treatment for non-work-related injury or illness.<\/td>\n<\/tr>\n
Incompetence<\/strong><\/td>\nContinued incompetence after training and reassignment.<\/td>\n<\/tr>\n
Material Changes<\/strong><\/td>\nChanges in circumstances make contract performance impossible.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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\"Shanghai<\/a><\/figure>
Worried about terminating a protected-category employee (pregnant, on medical leave, injured at work) and facing double severance or litigation?<\/a><\/div>

Our team advises on Article 42 protections, helps you design a legally-sound alternative (re-assignment, performance improvement plan), and document the process to reduce risk.\u201d\nMessage  \u2192<\/span><\/p><\/div><\/div>\t\t\t\t<\/div>\n\t\t\t\t

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Wrongful Termination<\/h3>

Unilateral termination without legal grounds constitutes wrongful termination. Disputes can be settled through settlement payments, arbitration, or litigation. If reinstatement is not possible, employees may seek double severance.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Mass Terminations of Employment<\/h2>

Mass termination involves terminating 20 or more employees or 10% of the workforce. Employers must notify the labor union and provide the local Labor Bureau with a 30-day notice of the layoff plan (see Article 41 Labour Contract Law<\/a>).<\/p>

Grounds for Mass Layoffs in China<\/h3>

Once an employer has submitted the plan to the local Labor Bureau, they may terminate the employment relationship on the following grounds:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Grounds for Mass Layoffs<\/strong><\/th>\nDescription<\/strong><\/th>\n<\/tr>\n<\/thead>\n
Bankruptcy Restructuring<\/strong><\/td>\nCompany restructuring under bankruptcy law.<\/td>\n<\/tr>\n
Operational Difficulties<\/strong><\/td>\nSevere operational difficulties.<\/td>\n<\/tr>\n
Economic Changes<\/strong><\/td>\nMaterial changes in the economic situation affect contract performance.<\/td>\n<\/tr>\n
Technological Changes<\/strong><\/td>\nChanges in product line or technology necessitating staff reduction.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t
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Employers must ensure compliance with laws and regulations in their HR practices. Understanding the grounds for layoffs and the legal requirements is crucial for maintaining lawful operations.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t

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Severance formulas, written warnings, and compensation calculations are statutorily prescribed in China, limiting discretion and requiring precise documentation to defend against wrongful termination claims. HR & payroll<\/a> specialists at MSA Asia ensure termination procedures comply with labor law requirements. Drop us a line<\/a> to audit your termination procedures.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"

According to local labor regulations, employees in China have certain employment rights when an employer wishes to conduct layoffs, restructure, or liquidate a company. These rights do not guarantee job retention but require a notice period and adherence to specific procedures. This article discusses when employee termination in China can occur and the circumstances and […]<\/p>\n","protected":false},"author":19,"featured_media":45286,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"iawp_total_views":423,"footnotes":""},"categories":[69],"tags":[],"class_list":["post-5325","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-hr-payroll"],"acf":[],"_links":{"self":[{"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/posts\/5325","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/comments?post=5325"}],"version-history":[{"count":12,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/posts\/5325\/revisions"}],"predecessor-version":[{"id":49602,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/posts\/5325\/revisions\/49602"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/media\/45286"}],"wp:attachment":[{"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/media?parent=5325"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/categories?post=5325"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/msadvisory.com\/wp-json\/wp\/v2\/tags?post=5325"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}