Some foreign employees complained that their labor contracts stipulate a requirement to provide three months’ advance written notice to the employer before resigning, and that compensation is required for early termination. They inquire about the legality of this provision and seek advice on what actions to take.
According to the labor law, our analysis and recommendations are as follows:
1. Advance Notice to the Employer
Article 37 of the Labor Contract Law of the PRC clearly states that employees have the right to terminate the labor contract by giving the employer written notice thirty days in advance or three days in advance during the probationary period.
Please be noted that, if the labor contract provisions are inconsistent with the law, such provisions are deemed illegal and invalid, having no binding effect on the employee at all. As long as the employee resigns within the legally stipulated period, the employer cannot unreasonably obstruct or demand compensation.
If the employer insists on compensation from the employee, the employer must prove the existence of losses and that they are caused by the employee.
Note: Some employers stipulate in the contract that they provided training, and therefore, the employee must compensate for training costs if leaving early, actually, this is another way for the employer trying to stop the employee from leaving, as they didn’t provide any training at all.
In court hearing, the employer must provide evidence that training was actually provided.
2. Employee Entitled to Economic Compensation if Employer’s Fault Leads to Resignation
According to Article 38 of the Labor Contract Law of the People’s Republic of China, if the employer has any of the following circumstances, the employee may terminate the labor contract:
(1) failure to provide labor protection or working conditions as agreed in the labor contract;
(2) failure to pay labor remuneration in full and on time;
(3) failure to contribute social insurance premiums for employees in accordance with the law;
(4) employer’s rules and regulations violate laws and regulations, damaging the rights and interests of employees;
(5) circumstances specified in Article 26, paragraph one, of this law that render the labor contract invalid;
(6) other circumstances as stipulated by laws and administrative regulations that entitle the employee to terminate the labor contract.
In accordance with Article 46 of the Labor Contract Law of the PRC, when an employee terminates the labor relationship in accordance with the aforementioned Article 38, the employer shall pay economic compensation to the employee. You may check our previous article for more information: What are the Rights of Employee in China?
3. Employee Should Handle Resignation Handover and File Transfer Promptly
According to Article 50 of the Labor Contract Law of the PRC, the employer must issue a certificate of termination or termination of the labor contract when terminating or ending the labor contract, and must complete the transfer of files and social insurance procedures for the employee within fifteen days. Meanwhile, the employee should handle work handover promptly according to the agreement between both parties.
In conclusion, for employees, if they submit their resignation within a reasonable period, perform proper work handover, the employer should cooperate in handling the resignation procedures without demanding any compensation from the employee.
