Frequently Asked Questions
My employer is trying to financially penalize me for changing jobs. What should I do?
Financial Penalty Clauses for Contract Breach
Simply put, in China it is generally not legal for an employer to impose a financial penalty on an employee for resigning from their job (Article 25 Labor Contract Law). There are two notable exceptions to this rule (Articles 22 & 23 Labor Contract Law) however these rarely, if ever, apply to foreign teachers in China:
Exception 1 (Article 22 Contract Labor Law) - A financial penalty may be legally imposed for training expensesincurred by an employee. However the penalty is limited to specific and actual training expenses incurred (including travel for training) and is reduced according to what percentage of the contract term has already been completed.
Exception 2 (Article 23 Contract Labor Law) - A financial penalty may be legally imposed on an employee for leaving a contract early when there are legally binding confidentiality obligations or non-competition arrangements in the employment contract. However this exception only able to be applied to employees in senior technician or senior management roles and compensation must be paid to an employee during a non-competition period (Article 24 Labor Contract Law).
Despite contract breach penalties not being technically legal, such penalties are unfortunately extremely common in employment contracts of foreign teachers in China. Employers do this because such clauses give an employer immense financial leverage over foreign employees who rarely know that such clauses are actually illegal. Foreign employees are also usually extremely intimidated by the thought of commencing legal proceedings against their employer in a foriegn country that has a confusing legal system that is completely in Chiniese.
What do I do if I have such a clause in my employment contract but want to leave my job?
Having a good strategy when resigning and changing jobs is of critical importance. Although as explained above the law is technically on your side in these types of situations, knowing exactly how and when to resign is a must to make sure your resignation puts you on a strong legal footing and minimises the financial and legal leverage your employer can otherwise have over you if you don't follow the correct process. The exact process you need to undertake in your individual situation depends on several variable factors such as which province/city you are in, your nationality, the wording of your employment contract and other additional factors such as your/your employer's conduct etc. Extreme care should be taken when changing jobs as it is easy to make small mistakes that can have large financial and legal consequences.
Book a free 15 minute online consultation with us to plan how to change jobs in a way which minimises / eliminates financial loss and makes your work permit transfer process as smooth as possible.
My employer won't give me my work permit transfer documents for changing jobs. What should I do?
What are Work Permit Transfer Documents?
The "transfer papers" foreigners in China often refer to comprise of 2 documents:
Work Permit Cancellation Notice (issued to the employer by the Foreign Experts Bureau once a work permit has been cancelled)
Termination of Employment Letter (issued by the employer)
The reason foreign employees and their future employers want these two documents so badly is that they can be used to conveniently register a new work permit for an employee with the Foreign Experts Bureau.
What if my employer is withholding these documents from me?
Legal Position
China's Contract Labor Law was written for workers in China generally so does not properly deal with the subject matter of work permit transfer papers or other special documents / permits that apply to foreigners but not locals. This legal phenomenon has the unfortunate and unintended side effect of foreigners having no obvious legal recourse in cases when employers unfairly gain leverage over employees by withholding the two work permit transfer documents mentioned above.
Article 50 of China's Contract Labor Law requires employers to hand over an employee's certification for the termination of the labor contract (the second of the two documents listed above). However China's Contract Labor Law does not mention anything about an obligation for employers to give employees their work permit cancellation notice (the first of the two documents listed above). It can be argued that Article 50 also extends to work permit cancellation notices or that this document is classed as "other certificates" as per Article 84 and is therefore required to be given to the employee when they resign.
Based on the above two paragraphs, it can be concluded that work permit transfer documents are therefore legally required to be given to an employee.
Practical Steps for How to Change Jobs in This Situation
If you find yourself in this situation then do not lose hope - There are several ways of changing jobs despite the fact that your employer is withholding your work permit transfer documents.
It is very important to choose the correct strategy based on your particular situation as the authorities in different regions of China have different rules and practices which affects which courses of action are available in any given situation.
To learn which strategy is best for your situation, book a free 15 minute online consultation with us.
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