Redundancy In China: Regulations And Our Practices

Redundancy has not been defined in any law or regulation in China so far. Article 41 of The Employment Contract Law of the People's Republic of China provides the following sole and exhaustive four situations where employers can reduce their workforce due to "redundancy." According to Article 41, an employer may reduce its workforce as a result of "redundancy" only if it:

• Is in the process of reorganization in accordance with the bankruptcy law;
• Encounters serious problems in terms of production and operation;
• Switches to other lines of production, introduces a material innovation of technique or adjusts its operation, and after amendment to the employment contracts, still needs to reduce its workforce; or