Job Discussion Forums

[kev7161]

Since we seem to be hijacking the other thread of concerns by a new poster, I thought we could further discuss these issues in a new thread dedicated solely (?) to this topic.

So Red says that there is China Labor Law that states:

Article 47. A worker shall be paid severance pay based on the number of years worked with the Employer at the rate of one month�s wage for each full year worked. Any period of less than one year shall be counted as one year. If the monthly wage of a worker is greater than three times the average monthly wage of employees in the municipality directly under the central government or municipality divided into districts where the Employer is located, the rate for the severance pay paid to him shall be three times the average monthly wage of employees and shall be for not more than 12 years of work. For the purposes of this Article, the term �monthly wage� means the worker�s average monthly wage for the 12 months prior to the termination or ending of his employment contract.

Is there a link to this that can be provided?

I realize that many FTs here flit from one job to another and some don't even stay in China beyond a year or two, so this may not be a big deal for them, but others (like me) have been at the same school for years and our salaries have gone up and up during those years of servitude.

From what I understand from above is, if my salary is 10,000 rmb per month but the average salary of a Chinese employee is 3,000 rmb per month, then I stand to bring in 3X the average salary (9000). Is that correct? 10,000 is what I started out at 7 years ago and my salary is a quite a bit higher than that at the present. However, 9000 x 7 (or 8 or 9) is still a good chunk of change. If this is something that is really and truly owed to me, I'd want to collect this upon my "retirement" from China. This would give me a good nest egg to use with my return home. I wouldn't have to sweat finding work RIGHT AWAY when I got back.

If Red or anyone else can give more details, I for one would certainly appreciate it. Also, is there anyone here who has (or know anyone who has) collected severance pay such as this? What are the procedures for laying a claim? Do you think it is realistic that it can be collected? If I approach my school about it now, do you think they would find a reason to get rid of me so they don't have to pay out in a year or two when I plan on legitimately leaving them?

With this new insurance plan affecting some and not affecting others (like me), I know there is some sort of retirement fund one is paying into and are allegedly supposed to collect when they leave their job here. How is this different than the severance pay as referred to above?

Any other hidden benefits that we should be aware of?

[kev7161]

To answer some of my own questions:

http://www.fdi.gov.cn/pub/FDI_EN/Laws/GeneralLawsandRegulations/BasicLaws/P020070831601380007924.pdf

Now this is all in English and I've read elsewhere that the laws governing Chinese citizens also govern expats working in the PRC.

And from this website:

http://www.pacificbridge.com/publications/termination-issues-in-china/

[7969]

Looks like you're right. If you finish a contract and want to move on, but are offered a new contract then your employer doesn't have to offer severance pay. If you want to stay but are not offered a new contract (and there's no good reason not to offer you one) then they have to give you the severance pay. If you're getting fired, then forget about it in that case as well.

[Lobster]

Seems right, but the law itself makes no mention of one having to agree to extending the contract. Also in the Labor Law it states that if you work a certain number of fixed-term contracts, you must be offered an open contract. That type would provide severance. In my case, I just wrote the severance into the contract to be paid at the end of each year, so I don't have to worry about them balking at a big payout when I have to go. FTs who are unaware of the laws here will certainly get short changed in some way.

RED

[kev7161]

If a fixed-term employment contract expires and is not renewed, severance pay is required in China. Firms can avoid this by offering renewal on the same or better conditions.

If the employee does not accept, severance pay will not be required.

I think if one is aware of all the laws and by-laws of China and the demand for his or her services are high, then putting a clause in such as you mentioned would certainly be fortuitous. However, in my case, I feel my school, although they have always fulfilled my contract in full with no problems, may not think of me as necessary should I try to do something like this at the present. Certainly my current contract is already in place and signed and stamped, but if I were to broach this topic for next contract, I am guessing they would politely decline. They might well offer me a new contract for the next school term but not deign to include an end-of-year severance pay clause in it. If I disagreed and chose not to sign said contract, then they would not be obliged to offer me any sort of severance pay at all and I would be out looking for another job!

My principal did mention fleetingly last spring about how I would receive "something" once I hit the 10-year mark at the school. That would mean, however, staying in China for 3 more years and that "something" could be a new car, or a piece of paper commemorating my 10 years of service . . . written in Chinese of course!


But you're right in that Article 47 does not state that I must renew. But there are dozens of articles there and I'm guessing (without having read through the entire thing) there is a clause that states that, unless I'm violating the school's rules, I either accept a new contract and continue working or reject it and receive no severance. Severance pay is not really the same as retirement pay. Severance is more of a forced retirement, an on-the-job injury that prohibits me from working, a lay off situation or some other reason whereas the employer no longer requires my services but has no good reason to out-and-out fire me.

[kev7161]

By the way, why aren't the Chinese labor laws (or at least the link to the laws) not a sticky here? I would think this would be a very important document for all teachers (as well as other employees) to be aware of . . . and could possibly prevent legal woes down the line.

[ecubyrd]

I did a pretty long tour in KimchiLand and was always paid severance upon the completion of a yearly contract, which was definitely a nice bonus. My current school here will pay severance (equal to one month's salary) after 3 year's service. I'd just assumed that China doesn't do the severance thing and this was just something that my particular school does. I plan on asking about the yearly thing now after reading this thread.

[Shroob]

I'm not sure on that this will be a 'hidden benefit', but how about hongbao?

[kungfuman]

Don't you think Kev that employers will somehow term the airfare reimbursement as severance pay in an effort to get out of paying ANYTHING that they don't have to?

Govt rules or not?

[kev7161]

Oh, I have no doubt that once I bring up the subject, they will certainly try to talk around it. That is why I mentioned in the other thread that I actually get a full month's salary over the summer months (July and August) and don't need to do any work for it. THAT could actually be their way of complying with govt. regulations, but it would be nice if it were worded in the contract that way.

[wonderingjoesmith]

I've just signed my first contract in the country. I feel so far from where most of you are here. What I have noticed in my employment agreement is that I am a sort of 10 month seasonal employee. From what i've heard, my local colleagues aren't on such terms as I am. They're on 1-3 year deals. Doesn't that make a difference?

[bestteacher2012]

[Lobster]

If you include a clause in your contract stating that the contract must follow all Chinese labor law, there is no reason for you to have to specifically mention severance pay as it is an employer's obligation. The part about having to accept renewal or lose severance is nonsensical and seems bogus to me. There is no mention of this requirement in the labor law, and I'd like to know the source.

[wonderingjoesmith]

Sounds like agree and leave with a little or disagree and leave with less. What do the lawyers cost here? And, how long is the legal process?

I somehow doubt 10-month contracts qualify for the severance described above but maybe I am misreading something here. Most Chinese uni offers, which I have looked at this year, offer 10 months.

[kungfuman]

But in the spirit of Chinese labor laws and new "taxes" then we should have a level playing field - according to the law- as Chinese employees?