Recruiting in China

By Adam Ehrlich

Expat Labor Contracts: Be aware before you sign on the line that is dotted.

Living and working in a foreign country can be a daunting endeavor - the native language is not your own and you are thousands of miles/kilometers away from your family/friends. So, I think it's natural for an expatriate to look to and depend on its Shanghai employer as a source of comfort and assistance. It is reasonable to believe that your Shanghai employer understands your vulnerable situation and will shield you from predators that feed off the naive that venture into Shanghai from foreign lands. But, when the employer is actually one of the predators, your Shanghai adventure may soon be over.

So how could you avoid problems with your employer and what do you do now if you have one? If you are contemplating signing or have signed a contract, here are a few tips….

1. Insist on signing ONLY an English-language copy. If the prospective employer balks at this and explains that it is illegal to only sign an English version, you should try to convince them that that is not true. In China, you can be legally employed with signing an English-only version. But, if they insist, it is OK to sign a Chinese version, but DO NOT sign a Chinese-language contract without simultaneously signing a purported English-language copy. When signing the Chinese version, you should add a note near your signature that you do not understand Chinese and as a result are unaware of the contents of that version. The fact that the company provided the translation should influence a judge to lean in your favor with any discrepancy between the two versions.

2. Make sure the language (the version you understand) in your employment contract is WATER-TIGHT. The employment contracts that I have seen from my expatriate clients are so poorly written it feels like I have to cup the contract with two hands for fear that it may slip through my fingers. Make sure someone who passed high school with a “C” average can read the contract through one time and understand it. It should be written in clear, basic English which can easily be translated into Chinese by an average-skilled translator, yet still have enough sophistication that a lawyer or judge can feel secure when reviewing.

3. Memorialize all subsequent amendments and insist an authorized company representative sign it. Often times, the employer wil lpromise to sign it but use delay tactics. Do not be lulled into putting this off. A signed writing is almost necessary for a China judge to enforce an employer’s promise.

4. If a promise is not delivered, make a written demand with a time-certain a reply must be received (should be 10 days or less). The establishment of the date a written demand made is crucial to enforcing your rights within the China Labor Arbitration system.

If you cannot settle the dispute with your employer, then you can file a petition with the Labor Arbitration Bureau. It sounds like a scary place to be, but it can be surprisingly pleasant, even for a foreigner.

But before you can have your case heard, you must have these things:

1. Signed and notarized Labor Arbitration Petition(notarized by the Shanghai notary office);

2. Alien Employment Permit (it looks like a passport which your employer must give you in order for you to legally work in China)

3. Labor Contract (whichever versions were signed must be submitted).

You will submit these to a clerk of the court. This is not a simple, perfunctory step. The clerk (through the Review Committee) actually has the power to refuse your petition for either procedural or substantive reasons. If the clerk accepts your petition, then it will set a preliminary hearing date about two weeks later. This date is important because the judge must issue a decision within about three months of that date.

Most expats believe that pursuing a case in court requires thousands of dollars in legal fees and expenses (especially in litigious countries like the U.S.).This is not the situation here. First, a lawyer can pursue your case on contingency which means you don’t pay unless you receive money from the employer. You will need to expend some money up-front for translation and notarization fees, but it is relatively cheap ($500 is about average). But, if you receive a favorable judgment, it is possible for the court to award these fees to you in addition to the disputed amount (as long as there is no counter-claim, then it is highly improbable for the court to award expenses to the defendant).

If you don’t want to stay in China to battle in court, don’t worry, you don’t have to. The court will hear your case despite your absence in the country as long as you have a licensed China lawyer representing you. But you have to first sign, in-person, some documents with the Notary office.

The best advice I can give is to make sure the contract cannot be interpreted in more than one way which is the way you understand it to mean. If the employer violates an unambiguous promise, the judicial process should be swift and rewarding.