Interpretation And Application Of The Allowed Dismissal Due To Great Changes In Objective Situation

Due to the impact of COVID-19, great amounts of companies struggle in the crisis for up to one or two months after the Chinese Spring Festival vacation. The dilemma happens when they pursue to keep balance between the governments' restriction and the normal operation and labor. Some enterprises endeavor to reducing the labor cost by laying off employees. Based on this situation, this article will analyze the main legal rule of dismissal due to great changes in objective situation in accordance with Article 40(3) of the PRC Labor Contract Law. Guideline for implementing this rule will be provided.

1. What are the "great changes in objective situation"?

Article 40 of the PRC Labor Contract Law: