Laws of the People's Republic of China

(Effective Date 1984.07.14)

   Article 1. The present regulations are formulated in accordance with the relevant laws and decrees of the People's Republic of China.

   Article 2. SEZ enterprises decide their own labor plans and composition of their staff and report to the Xiamen City Bureau of Labor for the record.

   Article 3. The workers and staff members of an enterprise may be recruited by the enterprise itself or may be recommended by the labor service company of the special economic zone, and shall be selected by the enterprise through examination on the strength of their individual qualifications.

Those recruited may undergo a probation period lasting three to six months.

   Article 4. SEZ enterprises should not employ school children or those under 16, and if they recruit those from the rural areas or inland areas, they must have the approval of the Xiamen City Bureau of Labor.

   Article 5. SEZ enterprises should conclude contracts with workers and staff members for their employment. The labor contract should include terms on the following: employment, dismissal, resignation of the workers and staff members, contract duration, job responsibilities in production and other work, wages, rewards and punishment, working time and vacations, labor insurance and welfare, labor protection and discipline. The labor contracts must be reported to the Xiamen City Bureau of Labor for the record.

   Article 6. SEZ enterprises have the right of management over their own employees in accordance with the terms of the labor contracts. The employees enjoy all the rights protected by law and stipulated in the contracts.

   Article 7. The structure and scale of wages, and the ways of reward and subsidy for the workers and staff members are determined by the SEZ enterprises themselves.

   Article 8. The labor insurance system the SEZ practises is one which is provided by a social labor insurance fund.

SEZ enterprises must each contribute every month to a social labor insurance fund the equivalent of 25% of the enterprise's total monthly wages of the Chinese workers. Payment of the contribution is to be made to the organization designated by the Xiamen City People's Government to be used as pension for the retired, spendings for funerals of those whose death is due to causes other than accidents, pension for the disabled or for the family of the deceased, medical fee for the retired, and allowance for those waiting for re-employment after dismissal.

   Article 9. SEZ enterprises should draw a certain amount of money from their profits to be paid into a workers' welfare fund for such purposes as welfare, medical care and assistance for those who are in difficulty.

   Article 10. SEZ enterprises must each take out an employer responsibility policy at the insurance company designated by the Xiamen City People's Government. On-the-job injuries, disability and deaths and occupational diseases of workers and staff members shall be handled by the insurance company in accordance with relevant regulations.

   Article 11. SEZ enterprises follow the six-day work-week and eight-hour work-day practice. Overtime work must not be longer than 12 hours a week and extra pay will not be lower than 150% of the wage of the individual concerned and extra pay for those who work on holidays will not be lower than 200% of the wage.

   Article 12. Public holidays and paid vacations of the workers and staff members of the SEZ enterprises are as follows:

General holiday: one day per week

Statutory holidays: seven days with pay, namely New Year's Day (one day), the Spring Festival (three days), the International Labor Day (one day), and the National Day (two days)

Wedding leave: three days with pay

Maternity leave: not less than 56 days with pay

Sick leave: full pay to those whose sick leave is less than 13 days, and 60%, 70% and 80% of the pay to those whose sick leave is 13 to 24 days and whose length of service is less than ten years, ten to 15 years, and more than 15 years, respectively. The length of time and the amount of pay shall be decided by the enterprises themselves for the yearly vacation, leave for attending the funerals of the employee's next of kin and sick leave exceeding 24 days.

   Article 13. Workers and staff members of the SEZ enterprises have the right to establish grassroots trade union organizations and organize activities in accordance with the Trade Union Law of the People's Republic of China.

The main tasks for these trade unions are: to safeguard the legitimate rights of the workers and staff members, help the enterprise to plan the use of welfare funds, organize sports, cultural and recreational activities for the workers and staff members, educate them to observe labor discipline and work hard to fulfil the various economic tasks of the enterprise.

The SEZ enterprises should actively support the work of the trade unions, and allocate an equivalent of 2% of the total wages of the workers and staff members as the trade union fees every month.

   Article 14. A SEZ enterprise may dismiss its workers and staff members in line with its labor contracts, but it must inform the individual concerned, the enterprise trade union and the SEZ labor service company of the dismissal one month in advance. No dismissal is allowed when a worker or a staff member is receiving medical care for injuries as a result of on-the-job accidents and occupational diseases, and for illness and non-accident injuries, and when women workers who are pregnant for more than six months or who are spending their maternity leave.

When a worker or a staff member is dismissed before or upon the expiration of the labor contract, the SEZ enterprise concerned is to pay a compensation fee calculated on the basis of the individual's seniority in the enterprise and average monthly pay of the six months prior to his resignation.

The norms for the compensation fee are: 50% of the average monthly pay if the individual has worked for less than half a year; one month's pay for one year, including those who have worked for more than six months but less than one year; one-and-a-half months' pay for one year starting from the 11th year for those who have worked for more than ten years.

   Article 15. Workers and staff members may resign according to the labor contract and they should notify the enterprise one month in advance.

Workers and staff members who have worked for less than two years and who have been released for training by the enterprise but want to resign after training should pay the enterprise a certain amount of training expenses. What the amount should be and other conditions may be covered by the labor contract.

The SEZ enterprise should submit a list of those who have resigned to the special economic zone's labor service company.

   Article 16. The employment contract should include regulations on employment, dismissal, resignation, pay, welfare, reward and punishment as well as social insurance of the foreign and Hongkong, Macao and Taiwan workers and staff members in the enterprise of the zone, and a duplicate of the contract should be submitted to the Xiamen City Bureau of Labor for the record.

   Article 17. The SEZ enterprises must follow the laws and decrees of the People's Republic of China on labor protection and special protection for women workers, guarantee safe operations and health of the workers and staff members, over which the Xiamen City Bureau of Labor has the right to examine and supervise.

   Article 18. The SEZ enterprise may, according to the seriousness of each case, give the necessary punishment and even dismissal to those workers and staff members who violate rules and regulations and cause certain consequences. The enterprise should inform the dismissed and the enterprise trade union of the decision in writing, and report to the Xiamen City Bureau of Labor for the record.

   Article 19. Labor disputes that occur in the SEZ enterprises may be solved by the parties involved through consultation; the enterprise trade union may take part in the consultation when it deems necessary; those who are involved in the labor disputes may ask for arbitration from the Xiamen City Bureau of Labor if the disputes cannot be solved; and if those involved are dissatisfied with the arbitration ruling the case may be brought before the people's court.

   Article 20. The regulations shall come into force on the date of promulgation.