Job Discussion Forums

[NickH]

Hi all, I am just about to actually sign my contract, but there is a big thing in the standard form that bothers me which may be familiar to you:

VIII. Breach Penalty

When either of the two parties fails to fulfill the contract or fails to fulfill the contract obligations according to the terms stipulated, that is, breaks the contract, it must pay a breach penalty of US $500 to 2,000 (or the equivalent in RMB).

If party B asks to cancel the contract due to events beyond control, it should produce certifications by the department concerned, obtain Party A�s consent, and pay its own return expenses; if Party B cancels the contract without valid reason, it should pay its own return expenses and pay a breach penalty to Party A.

If Party A asks to cancel the contract due to events beyond control, with the consent of Party B, it should pay Party B�s return expenses; if Party A cancels the contract without valid reason, it should pay Party B�s return expenses and pay a breach penalty to Party B.

I talked to my headmaster about inserting specifics about what is a "valid reason," but he says he doesn't know and he talked to the foreign affairs rep. and she says he's not allowed to change or add anything to it because it's the official standard document provided by the gov. Is it a valid reason to leave if my mother becomes seriously ill and I want to return to the US? No one knows or will tell me because it is arbitrarily in the hands of the Chinese government. I want to stay here and I like where I am well enough, but I feel extremely uncomfortable about entering into such a contract which says I must pay $2000 if I want or need to leave for some reason, regardless of circumstance or how much advance notice I give. What is the "standard" practice. Have most of you been aware of this and just sign away anyways, taking the risk? I need to figure it out by tommorrow and I feel very uncertain.

[7969]

as far as i know, that's a standard contract clause. its been in every contract i signed in china (3 of them now, all in different places).

the second paragraph of that clause is the one that i assume would apply if you asked to terminate the contract due to unforeseen circumstances. and depending on the circumstances, if you discuss leaving with your employer because of illness or other justified reasons, i'm sure you can work something out to avoid paying the breach penalty.

7969

[andyscott84]

But, it is also extremely hard to get fired. You would probably have to try and purposely get yourself kicked out for that to happen. Not that I've tried it or would promote trying it.

[Roger]

I honestly don't know why this provision should strike anyone as extraordinary! IT isn't, believe me!
In fact, certain of my peers make me believe it is an absolute necessity to maintain a modicum of continuity in our profession.

Having said this, you will most likely only pay if you abscond, break regulations repeatedly or cause your employer a hell of an embarrassment for incompetency.

On the other hand, it will be a lot harder to prove your employer wrong.

[Keath]

Here's a little FYI about contract law, breech penalties, are technically non-enforceable.. Parties need to show/prove damages (tangible or otherwise) in the court or during arbitration..

Still, its better to change the language of "Valid Reason " towards pointing to something illustrated in the contract itself, Eg. Valid reasons may include but are not limited to..

A school for example (Like huizhou E.F.) might try to extort the breach fee from you should you have a family member die in your home country requiring you to leave..

Its good to have the fees in place as for both parties, though without help the teacher will be on the losing side of any dispute with a school argued in a local arbitration venue.

www.journeyeast.org

[englishgibson]

EF Huizhou?! Scary staff!

That clause in the Contract does impose the obligations on you to follow your Contract, does it not? However, it also does give the employer an advantage/edge over any affairs/disagreements regarding your employment, does it not?
Nick, that is a standard contract in China. My advice to you is to sit down with that headmaster and discuss a �separate clause� between you and the school, although do keep in mind that the standard contract has got its number. So, when adding a �separate clause� if your headmaster agrees on such additional clause there, put that number there too. If you do not understand pm me.

Cheers and beers

[NickH]

Great suggestion. That's exactly what I decided to do.

[bearcanada]

There is quite a bit of bad advice in this thread, so be careful.

These penalty clauses are not as "standard" as some are suggesting, and the only reason they are in the contracts is that too many teachers sign them without knowing better.

There is nothing wrong with a penalty clause per se, but the wording is so loose that the penalty could be triggered by anything. The "not fulfilling the contract obligations" is too imprecise to be of value. Many teachers complain that this is just used as an excuse to not pay a teacher the last few months' salary.

To refer to a "valid reason" is nonsense as well. If you didn't have a 'valid reason', why would you cancel a contract? Same with the school. To say "I don't know" what a valid reason is, is just nonsense and will leave you wide open to all manner of potential abuse. If they can't define it, it shouldn't be in the contract.

To say that a penalty clause is "technically unenforceable" is plain wrong. And it absolutely is NOT necessary to 'prove damages' to be subject to a penalty clause, not in China and not in any Western country. If the contract says a breach (and the word is 'breach', not 'breech') results in a penalty, that is that. And don't let anyone tell you otherwise. The failure to comply with a contract provision will automatically trigger the penalty whether or not either party suffers a loss.

Arranging a separate side contract to cover this item may be possible, but you will have no guarantee that it will take precedence over the main contract.

My strong advice is to get the clause removed. And yes, you can do that. I've had emails from several teachers who have had no trouble with this.

I've placed some good contract information in the ESL section of my website. If you're interested, you should read it. The URL is http://www.bearcanada.com Click on the "ESL" button and then the "Bad Contracts" button.


Disclaimer:
"Do not eat. Not for use by children under 3. Do not leave in direct sunlight. May cause headache if worn instead of hat. Colors may vary. Batteries not included." (Courtesy of DOS)

[bearcanada]

As an addendum, I believe the original copy of that particular contract actually stated a penalty of "US $500 to $2,000". So your school is taking liberties by pushing the amount to the high end.

If you cannot have the clause removed, an easy way to settle this would be to reduce the penalty amount to $100 or some other amount you don't care about.


Disclaimer:
"Do not eat. Not for use by children under 3. Do not leave in direct sunlight. May cause headache if worn instead of hat. Colors may vary. Batteries not included." (Courtesy of DOS)

[englishgibson]

That school isn�t pushing anything yet as for your �YOUR SCHOOL IS TAKING LIBERTIES BY PUSHING THE AMOUNT TO THE HIGH END�. $500 - $2,000 is the government standard contract, so what are you talking about with your $100 and whatever else? Yes, the person is going to negotiate so don�t you see? What are you talking about?

[bearcanada]

Sorry. Maybe my manner was a bit too brusque. To be honest, it irritates the hell out of me that people are so eager to dispense legal advice without knowing what they're talking about. Kiddies, this is not the same as recommending a restaurant where the worst ending is some wasted money or a stomach ache. Legal recommendations, if followed, can have serious consequences. So unless you absolutely know something to be true, please refrain from advising.

First of all, the I believe the above-quoted clause is from a contract commonly in use in some form. I am told it was originated by SAFEA some years ago as a draft, and has been widely adopted by schools - since they would have had nothing else. But it also exists in many variations, and many of the individual clauses have been deleted or amended on the requests of teachers.

For all of you, just so you know, by Western standards this contract isn't worth a pinch of coonsh*t. Do I have your attention? The wording is so loose and imprecise you could drive a truck through every part of it. In a Western court it would be laughed out of the room.

However, there will also likely be a Chinese version that a teacher will have to sign. That version is likely to be more precise and would almost certainly be the governing document. But I would have to see it to know for sure.

The clause dealing with breach penalties is a concern to me because it is one of the few clauses that can do real damage and it is so wide open in its application that a teacher can incur a penalty for almost anything imaginable. When you have a clause that says something like, "if you don't do your duties properly, you will have to pay a penalty", you are potentially in serious trouble. The contract does not specify all the "duties" you will have to perform, nor does it define "proper" discharge of them. That means the employer can define them in any way it chooses and declare you in breach of your contract. The accusation may not be valid, but after they withhold $2,000 of your pay you aren't in the best bargaining position. There are several solutions.

One is to amend the wording in an attempt to define what constitutes a breach. For example, the contract says you are to teach 20 hours per week and the school gives you an extra hour. Well, they are in breach of the contract, so fine them $2,000. That isn't likely, is it? A contract breach resulting in a large penalty is not meant for trivial things. So amend it with words like, "A continued and substantial failure to perform required duties", or some such. At least this will permit small disobediences on either side without ending in court.

Another is to delete the clause altogether. Just refuse to sign the contract until the clause is removed. After all, you don't agree to such a condition in Western schools, nor for any job with a Western company. Nor, I suspect, would you be asked to agree to it in any job with a Chinese company. So why in a teaching position? And yes, you can have the clause removed. I advise teachers to try this approach first, and I've had emails telling me it worked without a problem. Ask and you shall receive.

Another solution is to reduce the penalty payable to an amount sufficiently low that you don't care if you have to pay it. I am not recommending recklessness here. If you are responsible for a serious breach of a contract in other than extreme conditions I think you should have your ass kicked. I have seen the amount of this penalty vary all over the map, so schools do not feel generally obliged to specify $2,000. If they won't remove the clause or redefine the conditions, try hard to reduce this amount to something negligible.

You do need to protect yourself from unscrupulous schools who will try to use the clause to steal money from you. Deleting the clause may not help, since I've read many stories of schools "fining" teachers for all sorts of imaginary things. If your employer is really dishonest, good words in a contract will not protect you.

On the other hand, if your employer is largely, if not entirely, honest, you are probably safe in any case. But you may not know at the beginning, and everybody is nice on the first day.

I suggest every teacher tell the school that this clause makes them very uncomfortable because it is so open. Tell them it is a very foreign thing to you and that you really do not want to agree to it. Tell them you don't want penalty money from the school either. You just want a job and a happy place to work. Be firm without being obnoxious, and try to have the clause removed.

My comments about "bad advice" related to things like penalties being "unenforceable" and "having to show damages" - things that are plain wrong. Also, the suggestion that this penalty clause is "common and widespread", implying that everyone else agreed to it because they had to do so. And that isn't true either. Most of the teachers who agreed to it simply didn't know any better, and many contracts do not have such a provision. And in any case, almost any contract wording is negotiable. I can tell you some quite amazing stories of teachers who have followed my suggestions and had dozens of changes made to their contracts - air fare refunded in cash on arrival, penalty clause removed, duties defined, apartment photographed and specified, travel expenses paid, weekends free, 2 consecutive days off per week, absence of shift work....... Don't get greedy, but don't accept everything that's offered, either. It's your life and you have to be happy living it.

<Quote>The issue of the Standard Contract (foreign experts) is a very actual one as well as very legitimate one. It's tremendeously ambiguous with few details and it contains a fair amount of "Chinese English" in it.
<Endquote> Couldn't have said it better. You are perfectly correct on all points. But it's a two-sided problem. The schools are not experts on contract wording either, and they go with what they have. The best is to bargain for reasonable changes and let it evolve.



Disclaimer:
"Do not eat. Not for use by children under 3. Do not leave in direct sunlight. May cause headache if worn instead of hat. Colors may vary. Batteries not included." (Courtesy of DOS)

[Midlothian Mapleheart]

Edited to remove offensive content.

Middy

[nolefan]

[bearcanada]

If "there is no avoiding it" (the penalty clause), how do you explain the instances where teachers have negotiated it out of their contract?

How do you explain the other contracts that teachers sign, which bear little or no resemblance to the SAFEA version? For one, all of the large language schools have their own contracts which, from the samples I've seen, are very different. Are you suggesting all these people are employed illegally?

How can you say that adding some wording specifying reasons is "the only way" when teachers have had this clause removed or the amount reduced? There are clearly other ways.


Disclaimer:
"Do not eat. Not for use by children under 3. Do not leave in direct sunlight. May cause headache if worn instead of hat. Colors may vary. Batteries not included." (Courtesy of DOS)

[YearOfTheDog]

It is a standard clause in contracts you sign when you work in CHINA.