Under the Labor Contract Law, a written employment contract is necessary to establish an employment relationship. However, a part-time employee, who works no more than 24 cumulative hours per week and four average hours per day, is subject to different requirements and may be employed under an oral contract. Usually, the contents of an employment contract can only be modified in writing after both parties have reached a consensus through mutual negotiation. However, a verbal modification of an employment contract may also be valid if the modification has actually been performed for longer than one month and does not violate any law, administrative regulation, state policy, public order or good morals.
Employment contracts in China can have three different types of terms: fixed, open-ended or terms that expire upon completion of an assignment. Under the Labor Contract Law, if an employer opts to enter into a fixed-term contract with an employee, after the completion of two fixed terms, that employer must offer the employee an open-ended contract. Since open-ended contracts are inherently difficult to terminate, employers may want to use fixed-term contracts for new hires. This would give the employer a chance to evaluate its new employees. If the employee’s performance is poor, a fixed-term contract provides the employer with the option of discontinuing the employment relationship at the end of the term.
In China, the employee trial period is also known as the probationary period. A probationary period is commonly included in employment contracts. However, Chinese labor law contains restrictions on the length of the probationary period.
In China, an employee may unilaterally terminate his or her employment contract by giving a written notice 30 days in advance or 3 days in advance during the probationary period. On the other hand, an employer may unilaterally terminate an employment contract by giving a written notice 30 days in advance or providing one month’s salary in lieu of notice in certain circumstances.