In China legally speaking, terminating an employee is not an easy task. Since 2008, strict rules and regulations were formed for the employers on terminating employees. To avoid the expensive labor disputes which are likely to arise from the termination of the employees, the employers in China need to have the information about all the laws and issues relating to employee termination.

The employers need to take preventive measures starting from the appointment of the employee till his/her termination. The firing of an employee should be done with a proper and legal reason. Otherwise, the employer has to face legal issues and compensate for that. Below are ten reasons through which you can be legally fired from Chinese Company:

Termination of Contract Period Expiry

While appointing an employee, there is a first fixed term contract done with the employee. The employer has full right to terminate the employee when the contract period has expired. The employer is not liable to renew the contract if he wants to fire the employee, but the employer needs to pay the economic compensation to the employee. As per the Chinese labor laws, if the second fixed-term contract is supposed to expire, the employee can request an open-ended employment contract, and it becomes mandatory for the employer to accept that request.

So, if you don’t want to get terminated or fired due to contract period expiry, you can request for open-ended employment contract from the employer. Just remember that you cannot request for an open-ended employment contract while your first fixed term contract is expiring, that can be done only after the second-term contract has expired and not before that.

So, just show your best performance to stay to your job in China. For the employers, if you want to fire an employee for certain reasons and he/ she is working on an open-ended employment contract, or the contract is not near to its expiry date, then you need to deal with early termination of the employee.

Early Termination of an Employee

In China, an employer cannot fire an employee due to any personal reason. There should be a legal and valid reason to do so. In the case of early termination, an employer can terminate an employee for certain circumstances only. Otherwise, the employer can get trapped in some legal issues which would be very bad for the reputation of the company. In such cases, the employer has to pay additional compensations and legal penalties. Still there are some ways as given below through which an employer can enable early termination of an employee by convincing the employee for mutual termination.

Through mutual termination, the employer can save their company from expensive legal disputes and at the same time can terminate the employee. If the employer is not able to convince the employee, then there are some specific reasons or situations in which the employee can be fired. Examples include termination due to fault or misconduct, incompetency of the employee, lack of expected performance, contagious illness, violation of the company’s rules and policies, committed a crime, establishing relationship with the competitor company and much more to be listed below:-

Employee Has Not Satisfied Employment Conditions During Probation Period

During the probation period, if the employee’s behavior, conduct, or performance is not found satisfactory, the employer can fire the employee. If the employee is short tempered and keeps on fighting and arguing with his/her colleagues, then that behavior cannot be accepted in the organization. Many times, the employees are involved in office politics and let other colleagues down deliberately, or take credit for things which they have not done. The management needs to take special care of this situation.

If the employee doing this kind of wrong act is not stopped, then other well-deserved employees suffer and lag behind in their careers. The career growth of each and every employee is the responsibility of the employer, and thus, the employer can fire the employee who is not performing well and behaving in a weird manner with other employees. As termination at the time of probation period is totally the will of the employer, still the employee has to give a three days notice to the employer and the employer can then relieve the employee.

The Employee has Violated the Company’s Rules or Procedures

Each and every company in China has specific rules or procedures which every employee has to follow. If the employee is a foreigner (resident of any other country besides China), then they need to have the work permit signed by the Government of China. Below mentioned are some rules and procedures that must be followed by the employer.

(i) Coming late and leaving early every day

(ii) Wasting productive time by gossiping with others

(iii) Sleeping during working hours

(iv) Having alcohol during working hours or coming drunk to the workplace

(v) Sleeping or showing laziness towards the work assigned to him/her

(vi) Working or freelancing for other companies in the premises of the organization

(vii) Any act which is not for the good being of the company

(viii) Joining hands with the competitor and leaking the company’s information

(ix) Abusing colleagues or the employer in their presence or absence.

(x) The employee is seriously negligent towards his/her duties and commits a major mistake

(xi) The employee has deceived in any way and caused financial loss to the company
Employee Has Committed a Crime

An employer can immediately fire an employee in China if he/she has committed a crime. The crime can be of any form like theft, murder, corruption, coercion, human trafficking, drug trade, domestic violence, etc. If the employee has committed any of these crimes and reported to the police station or a legal case is going on in the court, the employer can terminate the employee.

Keeping an employee who has committed such kind of crime can be dangerous as he/she could commit such a crime at the workplace and spoil the reputation of the company. Moreover, the security of all the employees is the responsibility of the employer. If due to a criminal employee harm is caused to other employees, or if any of the employees feels insecure or in danger, then the employer might face legal issues, and the organization spoils its reputation. In such cases, it is always better to fire such employee who is having a criminal background, has committed a severe crime or has been charged with any crime.

Breaking Cyber Laws

If the employees of Chinese companies break cyber laws as given below, they can be terminated immediately from the organization:-

· Speaking bad or abusing the company or the employer on Facebook, Linkedin, Twitter or any other social networking sites.

· Unauthorized surfing on the net.

· Watching porn during working hours

· Using shopping sites during working hours

· Breach of company emails or using company emails for your personal benefit

· Using company internet for your personal reason

· Personal chats using a company Skype account

If any of the above is done by the employee and he/she is caught, they can be terminated as it is a serious offense considered in China because due to all these acts by employees, the company has to face financial loss. The employees being engaged in other cyber activities during working hours could lead to company closure as the overall productivity decreases, and also the reputation of a company can be spoilt. Moreover, negative marketing of a company while working in the same company cannot be tolerated by any employer.

Sexual Harassment to the Co-worker

If an employee is involved in sexual harassment of a co-worker whether senior or junior, can be terminated from the job immediately. According to the research by a China-based firm, every year the number of women harassed at work is increasing. Still sexual harassment is not something which is widely discussed in China.

If any woman complains of any co-worker about the sexual harassment he has done to her, then that employee can be immediately fired as per most of the rules and regulations of companies in China. Though, some Chinese citizens are expecting stricter laws relating to sexual harassment in companies. They believe that the Chinese Government can impose severe punishments for sexually harassing the women at the work place.

The respect and protection of women working in an organization are the responsibility of the employer, and they need to make sure that all the women in their organization feel secure and safe while working. So, it is always better and liable to fire a person harassing women and trying to indulge with them sexually without their consent.

Refusing to Follow Directions or Orders of the Seniors

In any organization, the juniors are supposed to follow the directions and orders of the seniors. Failing to do that, the organization can suffer regarding productivity and revenue. So, it is always advisable for the juniors to follow the orders of the senior managers and work in harmony.

Due to some ego issues, sometimes the juniors fail to follow the orders and in that case, the employer has to fire the employee doing that. It is obvious that the senior in a company is much more experienced, and he/she knows the way a company works and which acts are in the betterment of a company.

It is always wise to follow the rules of the company and the orders and instructions your seniors have given to you. It is better for the employers to place this clause in the appointment agreement of the employee that they will be following the instructions and orders of the seniors so that the harmony is maintained in the organization and all tasks are done smoothly. On doing so, the growth of the company can be ensured.

Changes in Company Policies or Government Regulations

Over the period, there are many changes coming in company policies or government regulations, due to which the employer has to terminate the services of the employees. Examples include:

· The employer is facing extreme difficulties in production and operations

· The employer is facing financial difficulties and restructuring as per the Chinese Bankruptcy Law

· The employer has introduced some changes in products and services. They have removed some outdated procedures due to which amendments in employment contracts occur and need to decrease manpower.

· Where the objective economic situation upon which the labor contract is based has considerably changed, and the employer is unable to perform the labor contract.

· The economic situation of the company has changed, and the employer is unable to retain the number of present employees.

In these cases, a good compensation is given to the employee, and they are relieved on good notes after 30 days notice period by the employer.

Termination Without Fault

The termination without fault can occur when the employee has not done any fault and is terminated due to below mentioned reasons:-

· If the employee has developed a noncurable disease and cannot get engaged in any activities going on in the organization.

· If the employee has met with an accident out of the company premises and has a serious kind of injury due to which he/she cannot resume working.

· If the employee is incompetent in the work for which he has been appointed and even after giving training for other work, he has remained incompetent.

· If the performance of the employee discussed at the time of appointment, becomes impossible due to some external factors or some other factors.

· For any reason if the employee is disturbed due to some personal problems or is depressed and is not able to concentrate on work.

If the termination is without fault, then the employer is supposed to give 30 days notice and provide complete salary to the employee about the notice period.


The employers can take several measures in retaining and terminating employees but within the mentioned rules and regulations. While dealing with the termination process, the employers should be careful so that they do not fall into costly legal issues relating to labor laws.

The company should create a detailed employee handbook with complete rules and regulations for the employees to sign and acknowledge. The company should also maintain detailed records of the employees performances to avoid future disputes.

Before termination, the company should facilitate proper training or alternatives in changing their duties. There should be proper dispute resolution procedures and an employee consultation team to get the information about the problems your employees are facing (if any) while working in the organization. If the employee takes care of all these issues, then cannot fall in an expensive legal trap and run their business on their accord.