How to Cancel and Terminate the Labour Contract in China

There are several ways to end a labour contract:
Cancelled by one party or both of them.
(1) Employer and Emloyee both agree to cancel the labour contract.
An employer and a worker may cancel the labor contract upon consensus by consultation.
(2) An employee’s right to cancel the labour contract:
Cancelling wtih advance notice : A employee may cancel the labor contract if he informs the employer in written from 30 days in advance. During the probation period, a employee may cancel the labor contract if he informs the employer three days in advance.
Cancelling at any time: In the case of any of the following circumstances occurring to an employer, a worker may cancel the labor contract:
① It fails to provide labor protection or work conditions as stipulated in the labor contract;
②It fails to pay the full amount of remunerations in a timely manner;
③It fails to pay social security premiums for the workers according to law;
④The by-laws thereof are inconsistent with any law or regulation and damage the rights and interests of the workers;
⑤If it concludes or modifies, by way of deception or coercion or taking advantage of the other employee’s difficulties, makes the employee to conclude or to make an amendment of a labor contract that is contrary to that employee’S true will, the labour contract is invalidated.
⑥Any other circumstance as prescribed by law or administrative regulation under which the labor contract may be cancelled.
Cancelling Immdiately without informing the employer: Where any worker is forced to work by violence, threat or illegally limiting his personal freedom, or is forced to perform dangerous operations which may endanger his personal safety under illicitly commands or forces of the employer, the worker may immediately cancel the labor contract without informing the employer in advance.
(3) An employer’s right to cancel a labour contract:
Cancelling at any time: In the case of any of the following circumstances occurring to a worker, the employer may cancel the labor contract:
①He/she has been proved not to satisfy the recruitment requirements during the probation period;
②He/she is in serious violation of the by-laws of the employer;
③He/she causes any severe damages to the employer due to his grave negligence to duties or seeking private benefits;
④He/she establishes a labor relationship with other employers at the same time and may seriously influence his completion of the work in this entity, or he refuses to make a correction after the employer has pointed it out;
⑤If he/she concludes or modifies, by way of deception or coercion or taking advantage of the other employer’s difficulties, makes the employer to conclude or to make an amendment of a labor contract that is contrary to that employer’S true will, the labour contract is invalidated.
⑥He/she is subject to criminal liabilities according to law.
In a word, all the circumstances above are about the employee’s wrongful behaviour, which entitles the right to employer to cancel the labour contract.
Cancelling with advance notice: In the case of any of the following circumstances, the employer may cancel the labor contract after it notifies the worker himself in written from 30 days in advance or after it pays the worker an extra month’S salary:
① The worker falls ill or is injured for a non-work-related reason, and is not able to bear the original post after the expiration of the medical treatment period , nor can he assume any other position as arranged by the employer;
②The worker is incapable of doing his job and remains so upon training or upon adjustment to his post; or
③The objective circumstance on which the conclusion of the labor contract is based has changed significantly, which results in that the labor contract is unable to be performed and no agreement concerning the modification of contents of the labor contract is reached after consultation between the employer and the worker.
Evidently, the employer should notify the employee in advance when the employee haven’t done anything wrong.
Economic Employee Releasing: In the case of any of the following circumstances, if the employer needs to cut down above 20 workers, or if it needs to cut down less than 20 workers but the number accounts for 10 percent or above of the total number of the workers, the employer shall make an explanation to the labour union or to all workers 30 days in advance. After it has solicited the opinions of the labour union or the workers, it may have the reduction after reporting the plan to the labor administrative department:
①It is under revitalization in accordance with the Enterprise Bankruptcy Law;
②Serious problems in production and business operation occur;
③ The enterprise has changed products, made significant technological renovation or adjusted the form of business operation, and still needs to have reduction after the labor contracts are altered; or
④The objective economic circumstance, on which the labor contract is based, has altered significantly and it is unable to perform the labor contract.
2. Termination of Labour Contract
In the case of any of the following circumstances, labor contracts shall be terminated:
(1) The term of the labour contract expires;
(2) The worker has begun to enjoy the basic endowment insurance treatment;
(3) The worker is deceased, or is dead or missing as announced by the people’S court;
(4) The employer is announced bankrupt according to law;
(5) The employer is revoked of business license thereof, ordered to close down, discharged, or it determines to dismiss before the schedule; or
(6) Other circumstances as prescribed in laws or administrative regulations occur.