In China’s new two-child era, couples are allowed (even encouraged) to have two kids, but no more, unless an exception applies.
Can an employer in China unilaterally terminate an employee who is having more than two kids or otherwise violates the relevant laws on family planning and population control? This is an easy question to answer regarding employees of state-owned enterprises and government agencies. Employees at such organizations are subject to more stringent regulations because they are government employees and they can by unilaterally terminated for having more than one child.
The question that most concerns China employment lawyers and China employers alike is what can privately owned companies do in this situation. As is so often the case when it comes to China employment law, the answer(s) is localized and complicated. For example, Shenzhen generally prohibits employers from unilaterally terminating an employee for violating family planning laws, but it also gives its employers some leeway by allowing them to deal with this issue in their employment contracts, collective contracts and/or their employer rules and regulations. But since the basis for my statement regarding the rules in Shenzhen are based on seminar minutes from a Shenzhen Human Resources and Social Security Bureau meeting minute, the legal authority for even this in Shenzhen is somewhat unclear.
It is also important for any employer in China to understand that because female employees are a special class for whom Chinese laws provide extra protections, unilaterally terminating a pregnant employee is almost always going to be more difficult and problematic than it may first appear under the written laws and regulations. For this reason, when our employer-clients seek our counsel on unilaterally terminating a pregnant employee we nearly always seek out alternatives, including usually a mutual termination with an appropriate Chinese language settlement agreement. See China Employee Termination: Avoid These Mistakes.
A related question is whether an employer can put in its rules and regulations that violating relevant family planning laws warrants employee termination. As noted above, such a provision may hold water in Shenzhen, but not necessarily elsewhere in China. Many cities in China are of the view that because the employee who has violated China’s family planning laws will be or already is facing fines imposed by the authorities overseeing family planning and population, it would be too harsh to also allow the employee to be unilaterally terminated for the same thing, no matter what is in the employer’s rules and regulations and no matter how “flawless” the termination. Beijing used to split on this question, with some of its labor bureaus believing that employers may rely on their rules and regulations to fire an employee for violating China’s family planning laws, while others held the opposite position. Around the time of International Women’s Day in 2015, Beijing’s Second Intermediate Court made clear its position in a press conference: employers cannot unilaterally terminate employees for violating China’s family planning laws. An employer may discipline such an employee (but not terminate her), provided there is an applicable provision in the employee rules and regulations. In other words, if you have no such rules in place, you do not even get to discipline the employee. However, whether this Court pronouncement settles the issue even for Beijing is still unclear.
In a follow-up post, I will discuss what China employers can and cannot do regarding various other protections (overtime, workload adjustments, etc.) normally provided to pregnant employees, when one of their employees violates China’s family planning law.
We will be discussing the practical aspects of Chinese law and how it impacts business there. We will be telling you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.