Page 7 - SCBJ-201605
P. 7
May 2016
• Mr. B agrees to not terminate the labor collection agency to make or supplement failing to contribute social insurance
relationship or claim severance due to contributions within a stipulated period, premiums for employees pursuant to the
the company’s nonpayment of his social and shall be subject to a late payment fine law. In this situation, since the employer
insurance premiums; calculated from the due date at the rate of is legally at fault, the employee has the
0.05 percent per day. Where payment is right to terminate the labor contract
• Mr. B signs the letter of commitments not made within the stipulated period, the unilaterally and demand the employer
of his own free will and it will become relevant administrative authorities shall pay severance. The employer also must
effective on the date of signing by both impose a fine ranging from one to three bear the additional cost of violating the
parties. times the amount in arrears. Based on the law. It is essential for employers to avoid
above stipulations, both the employer and contravening China’s complex labor laws
In September 2013, Mr. B mailed a employee are obliged to contribute social and regulations. When a new employee
notice to the company to terminate the insurance premiums. is hired, it is up to the employer’s Human
labor relationship on the grounds of the Resources personnel to transfer the
company’s nonpayment of his social According to Article 52 of the PRC employee’s social insurance account from
insurance premiums. Thereafter, Mr. Contract Law, a contract, where illegal his previous company to the new one
B filed the case with labor arbitration, intentions are concealed beneath an within the first month of employment;
demanding the company pay him two appearance of legality, or where the thereupon the employer can contribute
years’ worth of severance and social mandatory provisions of laws and social insurance premiums for the
insurance contributions. administrative regulations are violated, employee in a timely manner.
shall be null and void.
Although the company presented the letter Since its establishment in 1992,
of commitments as evidence in its defense, In this case, Mr. B signed a letter of Dezan Shira & Associates has
the Arbitration Committee ruled that the commitments voluntarily renouncing been guiding foreign clients
company was at fault and obliged to pay the employer’s obligations to contribute through Asia’s complex regulatory
severance and social insurance to Mr. B for social insurance premiums. This letter of environment and assisting
his two years of employment. commitments was deemed signed by the them with all aspects of legal,
employer to avoid its legal obligations, accounting, tax, internal control,
Conclusion which is in violation of the mandatory HR, payroll and audit matters.
provisions of PRC laws. Thus, the letter of As a full-service consultancy with
In accordance with the Social Security commitments was null and void. operational offices across China,
Law of the PRC, the employer and Hong Kong, India and emerging
employee shall jointly contribute to the In addition, according to Article 38 of ASEAN, we are your reliable
basic pension insurance, basic medical the Labor Contract Law of PRC, where partner for business expansion in
insurance, work injury insurance, the employer fails to contribute social this region and beyond.
unemployment insurance, and maternity insurance premiums for the employee
insurance. Employers shall voluntarily pursuant to the law, the employee may For inquiries, please email us
declare and promptly pay social security rescind the labor contract. Further, at info@dezshira.com. Further
premiums in full and social security pursuant to Article 46, the employer is information about our firm can be
premiums payable by employees shall be obliged to pay severance to the employee. found at: www.dezshira.com.
withheld by their employer. Employers
who fail to promptly contribute social Since the Labor Contract Law of the PRC
security premiums in full shall be came into effect, many labor disputes
ordered by the social security premium have been emerging relating to employers
5
• Mr. B agrees to not terminate the labor collection agency to make or supplement failing to contribute social insurance
relationship or claim severance due to contributions within a stipulated period, premiums for employees pursuant to the
the company’s nonpayment of his social and shall be subject to a late payment fine law. In this situation, since the employer
insurance premiums; calculated from the due date at the rate of is legally at fault, the employee has the
0.05 percent per day. Where payment is right to terminate the labor contract
• Mr. B signs the letter of commitments not made within the stipulated period, the unilaterally and demand the employer
of his own free will and it will become relevant administrative authorities shall pay severance. The employer also must
effective on the date of signing by both impose a fine ranging from one to three bear the additional cost of violating the
parties. times the amount in arrears. Based on the law. It is essential for employers to avoid
above stipulations, both the employer and contravening China’s complex labor laws
In September 2013, Mr. B mailed a employee are obliged to contribute social and regulations. When a new employee
notice to the company to terminate the insurance premiums. is hired, it is up to the employer’s Human
labor relationship on the grounds of the Resources personnel to transfer the
company’s nonpayment of his social According to Article 52 of the PRC employee’s social insurance account from
insurance premiums. Thereafter, Mr. Contract Law, a contract, where illegal his previous company to the new one
B filed the case with labor arbitration, intentions are concealed beneath an within the first month of employment;
demanding the company pay him two appearance of legality, or where the thereupon the employer can contribute
years’ worth of severance and social mandatory provisions of laws and social insurance premiums for the
insurance contributions. administrative regulations are violated, employee in a timely manner.
shall be null and void.
Although the company presented the letter Since its establishment in 1992,
of commitments as evidence in its defense, In this case, Mr. B signed a letter of Dezan Shira & Associates has
the Arbitration Committee ruled that the commitments voluntarily renouncing been guiding foreign clients
company was at fault and obliged to pay the employer’s obligations to contribute through Asia’s complex regulatory
severance and social insurance to Mr. B for social insurance premiums. This letter of environment and assisting
his two years of employment. commitments was deemed signed by the them with all aspects of legal,
employer to avoid its legal obligations, accounting, tax, internal control,
Conclusion which is in violation of the mandatory HR, payroll and audit matters.
provisions of PRC laws. Thus, the letter of As a full-service consultancy with
In accordance with the Social Security commitments was null and void. operational offices across China,
Law of the PRC, the employer and Hong Kong, India and emerging
employee shall jointly contribute to the In addition, according to Article 38 of ASEAN, we are your reliable
basic pension insurance, basic medical the Labor Contract Law of PRC, where partner for business expansion in
insurance, work injury insurance, the employer fails to contribute social this region and beyond.
unemployment insurance, and maternity insurance premiums for the employee
insurance. Employers shall voluntarily pursuant to the law, the employee may For inquiries, please email us
declare and promptly pay social security rescind the labor contract. Further, at info@dezshira.com. Further
premiums in full and social security pursuant to Article 46, the employer is information about our firm can be
premiums payable by employees shall be obliged to pay severance to the employee. found at: www.dezshira.com.
withheld by their employer. Employers
who fail to promptly contribute social Since the Labor Contract Law of the PRC
security premiums in full shall be came into effect, many labor disputes
ordered by the social security premium have been emerging relating to employers
5
