Update on Jahwa General Manager Employment Case

January this year, I wrote a post commenting on the then ongoing high-profile employment dispute involving the general manager, Mr. Wang Zhuo and his employer, Shanghai Jahwa Corporation, a listed company in China. You can click here for more: http://www.sinoblawg.com/?cat=7.

Today, a piece of news ran on a news website shedding the final lights on the case.…

employee non-competition obligation in China labor/employment Laws

An expat working in Shanghai came to me the other day for advice on his non-competition obligation under his labor contract with in foreign invested company here.

The expat was ready to quit the current job and moved forward for a better one. In his contract with the Shanghai employer, he, as a senior manager, was subjected to a non-competition obligation. But…

What ensues when your China labor contract expires?

We are talking about fixed term China labor contract or employment contract. While this topic may not be very interesting to expat employees in China, it may be very relevant for foreign investors operating business in China.

Assuming that A signs a two-year labor contract with his employer, upon expiration of the contract term, his employer does not wish to…

Is it legal to terminate labor contract upon closure of branch office?

One of my corporate clients for whom I have been providing outside legal counsel service in regard to labor laws or employment laws recently put forward another interesting problem before me. It is always a pleasure to research on a new legal topic and find a solution for it.

Here is the situation: this foreign invested company is headquartered in Shanghai but…

risk of loss of freedom for serving as legal representative of a company in China

I have written a quite comprehensive post explaining the concept of legal representative of a Chinese company (click here for details).

Just recently, a new instance of foreigners being banned from leaving China prompted me to remind expat employees in China of the risk of loss of freedom for serving as legal representative of a company in China.

It is a simple…

Work ethic among Chinese employees: water that is too clear has few fish

Water that is too clear has few fish, and one that is too critical has few friends. This is a Chinese idiom from old history. This reflects well an aspect of Chinese culture and philosophy with respect to interpersonal dealing among Chinese people. It preaches the idea that one shall be tolerant with other people's mistakes and errors in order to be able to get along…

Can a Chinese employer lay off employees on the ground of business suspension?

There has been a slew of news on the internet telling layoff stories in big companies. The other day, it is AMD, the chip manufacturer, that was to slash 15% of its manpower throughout the globe. Today, the leading Chinese wind power company, SinoVel, sent dozens of its employees back home for “long vacation”, sparking anger among its staff. These…

dependent personal service or independent personal service?

There is a question in my mind for long, or I should rather say it is more of a contradiction or confusion rather than a question.

For expats working in Shanghai as chief or general representatives in representative offices, in the case of employment disputes with the rep office, their relationship with the rep office is not regarded as the normal labor relationship…

Chinese Labor Contract Law, it is not for you, dude!

One of my corporate clients recently asked about how to terminate the employment of one of its senior officers. The client is a WFOE invested by an American company. The poor employee is one who has served the WFOE for more than ten years taking up the regional sale manager position and receiving a hefty monthly salary of more than RMB 50,000. Due to the dipping Chinese…

Need I pay the individual income tax in China?

An American person had an issue regarding individual income tax with his employer. He approached me for advice on that.

It is a simple matter. The guy is hired by a newly established joint venture in HK and actually he is a minority partner in the joint venture also. The JV has business operation in China. The guy was sent to China for a few meetings for which he spent…

good faith attempt/consultation to sign labor contract?

In a recent case involving a labor dispute in which I represented the employer, a foreign invested trading company set up by an investor from Africa, an interesting question came up in regard of the double salary claim often raised by employees.

CASE FACTS: the employee (Chinese national, not expats) left the company after working for half a year and immediately…

Is this clawback clause in the employment contract effective?

I was asked a few days ago by an expat working in Shanghai in regard of his difficult situation:

he was relocated from Unites Stated to Shanghai two years ago; upon relocation, he signed an expat arrangement agreement with the parent company in which he agreed to work for the China subsidiary for up to three years; he was offered with good package of benefits including…

China’s new exit-entry law overhauled

China top legislature has passed the new law, namely, the Law of the People’s Republic of China on the Administration of Exit and Entry on June 30, 2012 that will come into force about a year later on July 1, 2013, a good gift for the communist party birthday then, I guess.

Needless to say, this law directly affects expats in China in many aspects. I would …

the dilemmas for expat employees in China

Recent two labor dispute cases in Shanghai I came to learn have further demonstrated the dilemmas that are faced by foreigner employees in China, which do not seem to be solved any time soon. Bear in mind, in this post, I discuss the dilemma for expat employees whose monthly salary is well above three times the average monthly salary (RMB 3896 in 2011) …

Manage your manager

A client came to my office telling a story that was shocking to an outsider. The client is a foreigner who has set up a WFOE in Shanghai two years ago producing cleaning products. As a foreigner unable to read any Chinese, she had to hire a Chinese manager as her right hand. In the WFOE, the manager is below one person only, the client, and above all other …

Notice About Administration of Foreign Expert Certificate Issued by State Administration of Foreign Affairs

[Jaosn’s Comments: I quote this article from the official website of SAFEA. SAFEA is one of my concern because every time a foreign investor intending to set up a language training school in China always brings up this issue. News had it also that many many English training schools or centres here in Shanghai failed to obtain proper employment permits/licenses,

A new view on the legal nature of the work permit for foreigners working in China

Every foreigner who works in China is supposed to hold a Work Permit issued by local labor department. Otherwise, the employment of the foreigner is illegal. The consequences of this illegality will be (1) penalties that may be imposed by local labor department and local police, and (2) more importantly, the change of the relationship between the foreigner…

Your employers no longer able to secretively cancel your work permit in Shanghai

Recently, I scored a big victory in a case against Shanghai Labor Department (“SHD“) in which we sued SHD for wrongly cancelling the work permit of my client, an American individual. The court judgment, coming after long period of intentional delay, declared that SHD’s cancellation of alien work permit based on the unilateral application…

Do I enjoy the tax credit benefit under China-USA income tax treaty?

Recently, an American expat working in China approached me for advice about his situation where he was ordered by local tax authority to pay individual income tax that is inadvertently evaded in the past five years.

The USA expat was originally dispatched by American parent company to offer engineering support to Chinese plant. He was however paid by the parent…