Laws of the People's Republic of China

   Article 1. These Interim Regulations are formulated in the light of specific conditions and in accordance with the relevant laws and regulations of the People's Republic of China.

   Article 2. Foreign citizens, overseas Chinese, compatriots in Taiwan, Hong Kong and Macao and their companies, enterprises and other economic entities shall, when establishing enterprises in the Development Zone (hereinafter referred to as the Development Zone enterprises), report for the record to the Labour Bureau of the cities where they are located the labour plans of the enterprises which shall be determined by the board of directors of the enterprises.

   Article 3. The Development Zone enterprises shall implement the labor contract system in employing the staff and workers. The labour contract shall include the following items: the term of the contract; the employment, dismissal and resignation of the staff and workers; the production of the work tasks; labour service charges and provisions of awards and punishment; work schedules and holidays; labour insurance and welfare benefits, labour protection and discipline and other rights and obligations agreed upon by the parties.

The labour contract shall be signed by the enterprise with the labour union of the enterprise or directly with each of the staff and workers, and shall become effective after the examination and approval by the Labour Bureau of the city where the enterprise is located.

   Article 4. The Labour Service Company shall be established in the Development Zone to aid the enterprise recruiting and training the staff and workers, direct the staff and workers in seeking employment, guide them in signing labour contracts with the enterprise and centrally control the social labour insurance funds of the staff and workers.

   Article 5. The staff and workers to be employed by an enterprise may be recruited by the Labour Service Company on behalf of the enterprise or by the enterprise itself under the approval by the Labour Bureau of the city. The probation period for newly employed staff and workers will be three to six months. Those qualified shall go through the procedures for regular membership through the Labour Service Company.

   Article 6. The staff and workers to be employed by the enterprise shall be over at least sixteen years of age. Students may not be employed.

   Article 7. The Development Zone enterprise shall pay wages to the staff and workers on individual basis. The wage standards shall be settled in the labour contract according to the category of the enterprise and the types of work in production, and shall be increased annually in accordance with the individual technical competence and the beneficial result of the enterprise. The range of increase shall be determined by the enterprise and the labour union through consultation.

The types of wages and the system of bonuses and subsidies for the staff and workers shall be determined by the enterprise itself and be reported for the record to the Labour Bureau of the city where it is located.

   Article 8. The Development Zone enterprise and its staff and workers shall pay monthly social labour insurance funds to the Labour Service Company respectively at 25% of the total amount of wages of its Chinese staff and workers and at 2% of their wages during the contract period. The funds shall be paid before the fifth day of the following month. In case of failure to do so, a surcharge for overdue payment equal to 1% of the payable amount shall be imposed for every day in arrears.

The social labour insurance funds shall be used for the staff and workers for the following purposes: retirement pays, medical fees after retirement, funeral expenses, pension for the disabled and the deceased, relief funds and subsidies for living expenses before reemployment after dismissal.

   Article 9. The staff and workers of the enterprise have the right to establish labour union in accordance with Chinese laws, to organize union activities and to protect their rights and interests. The enterprise shall support the work of the labour union and allot money as the union's funds in accordance with the pertinent regulations. The union shall support the proper business activities of the enterprise and educate the staff and workers to observe labour disciplines.

   Article 10. The work schedule of the staff and workers of the enterprise shall not exceed eight hours a day and six days a week. For the work that has to be done overtime, an agreement of the labour union shall be needed beforehand and an overtime pay shall be given.

   Article 11. The staff and workers of the enterprise shall enjoy the rest days and official holidays provided by the government and other rights and interests stipulated in the labour contract.

   Article 12. The Development Zone enterprise shall implement the Pertinent rules and regulations of Shandong Province and the People's Republic of China concerning labour and environmental protection and ensure safe and civilized production. The Administrative Commission of the Development Zone and the labour union have right to inspect and supervise them.

   Article 13. The Development Zone enterprise shall give special labour protection and maternal health protection to women staff and workers in accordance with the pertinent rules and regulations of Shandong Province and the People's Republic of China.

   Article 14. The staff and workers of the enterprise who are injured at post or undergo treatment of their occupational diseases and the women staff and workers who are pregnant for over six months or on maternity leave shall not be dismissed.

   Article 15. The Development Zone enterprise shall exercise management over the staff and workers employed in accordance with the regulations stipulated in the contract and the business requirements of the enterprise. The enterprise may impose sanctions against the staff and workers who violate the rules and regulations of the enterprise in the light of seriousness of the case. When imposing sanctions, the enterprise shall consult the labour union of the enterprise for its opinion and the person being punished for his argument. Any sanction shall be determined by the general manager and the deputy general manager. When dismissing any of the staff and workers, the enterprise shall report it for the record to the competent governmental authorities of the enterprise and the Labour Bureau of the city where it is located.

   Article 16. The staff and workers who want to resign shall submit the resignation to the enterprise one month in advance and report it to the Labour Service Company. In case of the staff and workers who have received training provided by the enterprise, they shall make certain compensation for the expenses the enterprise has incurred for their training if they want to resign before expiration of the contractual period.

   Article 17. During the contract period, the enterprise may dismiss, with the agreement of the labour union, the staff and workers who become superfluous as a result of changes in production and technical conditions or cannot meet the requirements of production and are not suitable for transfer of other work within the enterprise. The dismissal shall be reported to the Labour Service Company one month in advance. The enterprise shall pay the dismissed staff and workers according to the length of their work in the enterprise. The standards for compensation are as follows:

For length of employment under ten years, one month's basic wage for each full year's work;

For length of employment over ten years, one and half a month's basic wage for each full year's work for the eleventh year and onwards;

For length of employment under one year, one month's basic wage;

For person on probation, half a month's basic wage.

For those dismissed for the sake of the business conditions of the enterprise, an extra compensation of three to six months' basic wages shall be paid besides the amount described above. The enterprise shall give one to three months' basic wages to the staff and workers on expiration of the labour contract if the contract may not be continued.

   Article 18. Any labour dispute arising between the enterprise and the staff and workers shall be solved first through consultation by the enterprise and the labour union of the enterprise. If the consultation fails to arrive at a solution, either party or both parties to the dispute may require for arbitration by the Labour Bureau of the city where the enterprise is located. Either party that disagrees to the arbitration may file a suit at the people' court of the city.

   Article 19. Matters such as wages, remuneration, awards and punishment, welfare, social insurance, dismissal and resignation of the staff and workers of foreign nationality and from Taiwan, Hong Kong and Macao employed by the enterprise shall be determined by the board of directors of the enterprise and be specified in the employment contracts. A copy of the contract shall be submitted for the record to the Labour Bureau of the city where the enterprise is located.

   Article 20. These Interim Regulations shall come into force on the date of promulgation.