On Tuesday 22 September Zhong Lun Law Firm and Valueplus Consulting – in collaboration with the Australian Chamber of Commerce (AustCham) South China, the BritCham Chamber of Commerce (BritCham) Guangdong, and the Guangzhou Association of Enterprises with Foreign Investment – organised a seminar at Zhong Lun’s Shenzhen office on China employment and visa issues throughout and beyond COVID-19.
Kenneth Lam, Board Director of AustCham South China, began by welcoming the seminar participants and introducing the speakers from Zhong Lun and Valueplus Consulting.
Matthew Warr, Legal Consultant at Zhong Lun Guangzhou, then took the stage and started his presentation by covering some basics about Chinese labour laws. Matthew then talked about employment of foreigners and work permits in China, focusing first on the legal obligations of foreigners switching employers and/or location of employment by using a real life case study. The case study involved a foreigner whose work permit was registered with the head office of their company in one city but who was working in their company’s office in another city, which is considered as illegal employment. He also covered the question of whether employers are permitted to keep their employees’ ID cards or work permits in their possession, with the short answer to this being that they cannot.
Matthew then discussed a very important and relevant issue: how to reduce labor costs due to COVID-19 without terminating employees. Some legal-based solutions to this include reducing employees’ working hours or adopting work shifts; arranging annual leave, welfare leave and compensatory leave; deferring salary payments; and taking advantage of exemptions from or reductions to social insurance and housing fund contributions. Furthermore, he explained that when an employer suspends production or operation for reasons not related to its employees, the employer may be entitled to reduce the employees’ salary to the minimum wage or a percentage thereof until production or operations resume.
Following Matthew’s part of Zhong Lun’s presentation, Kent Woo, Partner at Zhong Lun Guangzhou, continued the presentation by covering labor contract termination – the last resort if the abovementioned labor cost reduction strategies fail or are not possible.
Kent first covered the six main reasons for which an employer can legally terminate employees without notice and severance pay. One of the most important of these reasons, he explained, is termination for “a material breach of the employer’s rules and regulations” (which should be contained within an employee handbook signed by employees when they begin their employment), such as for consistently turning up late for work, smoking in the bathrooms, and stealing items from the office etc., so long as the employer can prove in labor arbitration or court that it followed necessary procedures (e.g., sending warning letters) and that the breach was serious enough to support its actions. Through a practical case study, he demonstrated how an employee’s termination without notice and severance pay for lying about her sick leave (the employee in fact went travelling) was supported by the court as lawful termination without severance pay.
Kent then talked about the reasons for which an employer can legally terminate employees with notice and severance pay, including for suffering from an illness or non-work related injury, incompetency, and a major change in the objective circumstances relied upon at the time of conclusion of the labour contract.
Additionally, he covered mass lay-offs with notice and severance pay, employees protected from termination by the employer, employees prioritised for retention in mass-layoffs, and the reasons for which employees can terminate their labor contract and still be entitled to severance pay. Through another interesting case study, Kent demonstrated one such reason that employees can terminate their labor contract and still obtain severance pay: when the employer fails to pay the social insurance premium for employees. Other termination circumstances requiring severance pay, he explained, include mutually agreed termination but which is proposed by the employer, and when an employee’s fixed-term contract expires but the employer does not renew such contract, among other reasons.
Kent then discussed how to calculate severance and compensation payment for terminations under different scenarios with cause (i.e., some of the reasons mentioned above) and without cause (i.e., for unjustifiable reasons not stipulated in the law). He concluded the presentation with some final tips.
Following Zhong Lun’s presentation on China employment issues, Betty Zhang, Founder and General Manager of Valueplus Consulting, took the stage to talk about visa issues in light of the current ban on the entry of foreign nationals into China after 28 March.
Betty explained and analyzed the up-to-date visa and entry policies in a practical manner by using three typical and successful Invitation Letter (PU Letter) and New Visa application cases. By sharing her successful experiences in handling PU Letters for executives, businesspeople, professionals and their family members from all over the world, she offered solutions to the five major issues/questions that foreign nationals who are seeking to return to China care about the most, such as “Who is eligible to apply for a new visa without a PU letter to return to China?” and “Who is eligible for a PU letter to apply for a new visa to enter China?”
Betty通过三件典型的成功获得邀请函（PU Letter）及新签证申请的案例，实践性地介绍并分析了最新的签证及准入政策。通过分享为全球各地高管、商业人士、专业人士及其家属处理PU Letter的成功经验，就五项急需回华的外籍人士最关心的主要问题，她提供了解决措施。例如“谁有资格无需PU Letter即可申请新的签证回中国？”以及“谁有资格获得PU Letter以申请新的签证进入中国？”
Betty stressed that as foreign nationals with Chinese green cards are exempted from the entry ban and are free to enter China during the pandemic, it would be highly recommended for foreign nationals to apply for permanent residency in China if they are qualified. Some of Valueplus Consulting’s clients have already started the application for permanent residency as soon as they had re-entered China.
Betty also covered the current quarantine procedures and hotels in Guangdong Province. She strongly suggested that inbound travelers enter Mainland China directly instead of flying to Hong Kong and then entering Mainland China via Hong Kong to avoid having to do 14-day quarantine on both sides of the border twice. She shared with the audience the good news recently released by the Chinese government about the implementation of the 7+7/2+1 quarantine procedures.
After the presentation by Zhong Lun and Valueplus Consulting, a lively Q&A session was held. During the Q&A session, the most frequently asked legal-related employment questions were in relation to the legal obligations of foreigners switching employers and/or location of employment, reducing employees’ salary to the minimum wage or a percentage thereof until production or operations resume, and legally terminating employees with cause. The most frequently asked visa-related questions by the audience were whether their executives or colleagues are eligible for a PU Letter, and new visa application procedures at different Chinese embassies/consulates all over the world. Zhong Lun and Valueplus Consulting offered professional solutions according to their actual situation. The seminar came to an end with food, drink and networking.
AustCham South China received lots of positive feedback and are looking to hold similar informative seminars in the future and continue bringing value to our members and the wider community.