Hardly a day goes by without one of our China employment lawyers getting an email or a phone call asking whether we can help them with such and such employment law matter with their existing or (usually) their ex-employer. Many times they will briefly describe their situation and conclude their email with something like, “do I have a case.” Our employment attorneys nearly always respond with something like the following:
We do not know and for us to know we would first need to run a conflict check to make sure we do not represent your employer. Most importantly, we also will need to review your employment contract and we probably will also need to briefly research China’s national employment laws and the local employment laws in your area as well.
And guess what? Much of the time when we do review these contracts they are just terrible for the expat employee. Like really really terrible. We then have to tell the expat that there is little to nothing we can do beyond trying to make their transition to any new job as smooth as possible.
Even though we are pretty certain we know what their answer will be before we ask it, we then ask whether any attorney reviewed their employment contract for them before they signed it. We ask this NOT to emphasize the need to use a China employment lawyer before signing a China employment contract, but on the off chance that their contract was actually reviewed by a lawyer who might be willing to pay the employee some money for having done such a poor job on the contract. So far, no such luck as the response has always been either “no” or “no, it just never occurred to me that might be necessary” or “there was no point because it was just a form contract anyway.” Ugh.
If you are an expat working in China or seeking a job in China or even just renewing your contract with your current employer and it is for a substantial job with a substantial salary, you should have an experienced China employment lawyer review your China employment contract before you sign it. This is especially true if you will be working for a Chinese domestic company. This is also true even if you are given a “form” contract. Many companies use some sort of template or form document for their employees but this does not in any way mean you should not have a qualified lawyer review what you will be signing. Just because the employer uses a template does not mean you will be protected nor does it mean you cannot or should not negotiate the changes you need in it.
In fact, the window after you are offered the job and before you sign the employment contract to take the job is usually the best time to go “back and forth” with your employer to make sure the terms and conditions in your proposed employment contract are as favorable to you as possible. Once you sign your employment contract and begin working, that window has closed and your employer has very little incentive to revise or add anything to your contract.
Your proposed employment contract should be reviewed to make sure it protects you and includes everything you need or want to be included. To the extent there are ambiguous terms, take the time to seek clarification. And make sure that what you have been promised orally or in some other writing that is not in your employment contract goes in your employment contract. Do not be pressured into signing an employment contract by an arbitrary deadline. If they want you on their team, they can and they will wait a couple of extra days for you to get your employment contract right.
Even on those provisions you cannot change, a good attorney review will give you actionable information for the future. What provisions in your employment contract are illegal and therefore not enforceable against you? What provisions are unfavorable or unfair to you? What matters important to you are missing? Answers to questions like these will give you clarity and help you decide whether to take the job or not. They also will let you know what you can and cannot do if you do take the job.
But in our experience, employers are nearly always willing to make concessions to get the expat on board as an employee. Employers are often reluctant to make changes to their form contracts but far more willing to add things to it. For example, if a bonus is created just for your position, you should make sure this bonus is mentioned in your employment contract and that it specifies how much and when and under what conditions you will receive it. Far too often expats are offered a guaranteed bonus that is not mentioned anywhere in their contract.
On a related note, “yin-yang” contracts are never a good idea for either the employer or the employee. These are contracts where the employer offers the expat an employment contract the expat knows is a fake. The real deal between the employer and the expat employee is in a different document or not in writing at all. These yin-yang contracts are illegal and usually done to skirt taxes and they pretty much invariably lead to trouble. Just don’t do it.
Bottom Line: Expats looking to work in China should have their employment contracts reviewed by a China employment lawyer before they sign it, not after. This is way cheaper and way better in the long run. Trust us on this.
This article was written by Grace Yang and published on China Law Blog. Original Post: https://www.chinalawblog.com/2018/06/china-expat-employment-contracts-because-they-matter-a-lot.html