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Leaving your employer should be as simple as providing a 30-day written notice, but this is not the case for expats working in China. To successfully transition to a new employer, you require your old employer’s cooperation in canceling your work permit and residence permit, as well as obtaining a cancellation and release letter. However, it is a common practice for employers to withhold these documents until they are no longer upset with you for leaving, often demanding a significant sum as compensation, sometimes even in the five-digit range. Unfortunately, even money may not resolve the issue if you have a particularly resentful employer. Therefore, let’s explore potential solutions for this prevalent problem faced by expats in China.
To address this issue, the first step is to determine whether your employer will facilitate a smooth departure. Review your contract and search for clauses concerning breach penalties. If you come across a clause stating that you must pay a breach penalty or cover visa processing fees should you terminate the contract prematurely, consider it a major warning sign.
Next, arrange a face-to-face meeting with your employer to discuss your intention to resign. Verbally express that you wish to leave due to personal reasons, such as relocating to another city to be with a family member, cousin, or partner. It is crucial to provide a personal reason to avoid offending your employer, and refrain from complaining about colleagues, customers, students, or the work environment.
If your employer agrees, you can submit a written resignation letter. If not, ask for their reasons and what they expect from you in order to grant permission to leave. Typically, it will either involve finding a replacement or providing compensation. In this case, you might consider assisting in the search for a suitable replacement or negotiating the terms of the penalty. If the penalty is unreasonable or your employer refuses to let you resign, it’s time to proceed with plan B, which involves utilizing Article 38 of the labor contract law to terminate your employment.
The most commonly used reasons under Article 38 are non-payment of social insurance and unpaid wages. If you haven’t heard about social insurance, it likely means it hasn’t been paid. In fact, around 99% of expats do not receive social insurance contributions, making this reason particularly effective. To determine whether your social insurance has been paid, approach your HR manager politely with a fictional story about a friend who needed medical treatment for kidney stones, discovering they had a social insurance card and received a significant discount on the procedure cost. Mention your family history of conditions like high blood pressure and express your curiosity about having similar insurance coverage for future medical needs. Asking in this manner will not raise suspicion, and your HR manager will likely respond by stating they have purchased commercial insurance for you, rendering social insurance unnecessary. Once you obtain this confirmation, it serves as sufficient evidence to resign immediately and pursue severance pay through legal channels.
Another frequently used reason under Article 38 is unpaid wages. If you have worked overtime in the past, you are entitled to overtime pay, which your employer may be unaware of or simply choose to ignore. Overtime pay is a complex topic that can be addressed separately, so we won’t delve into it here. Additionally, illegal salary deductions are also common. For instance, employers may deduct a sum from your salary for being five minutes late, which is illegal and will be covered in future discussions. When scrutinizing wages closely, it is not uncommon to discover illegal deductions. If your employer refuses to reimburse your salary in full, you have another valid reason for immediate resignation according to the law.
Once you have identified a valid reason for immediate resignation, labor laws stipulate that you are entitled to severance pay. Your lawyer will then be able to leverage this severance pay as a bargaining chip in labor arbitration court to negotiate a smooth release. The key to successful negotiation is to always have some leverage. Without it, the balance tips in favor of your employer, making it challenging to assert your rights.
Another effective method to put pressure on your employer and gain additional bargaining power is to file a complaint with the labor supervision department, a government entity responsible for handling release letters. However, it is important to note that this department does not possess significant enforcement power and can be considered more of a symbolic authority. They do not have the ability to issue enforceable court decisions. Nevertheless, in certain cases, it can be effective if the employer is wary of potential complications, as the labor supervision department has the authority to conduct audits on employees’ social insurance status and employment contracts.
To summarize, transitioning between jobs can be challenging, particularly with a stubborn employer. It is crucial to consult a bilingual lawyer before attempting the methods mentioned above. Immediate termination necessitates careful planning and a professionally written letter in Chinese. Mistakes can jeopardize severance pay and make it difficult to resolve the situation. Additionally, it’s important to note that Chinese courts and supervision require all evidence and claims to be submitted in Chinese. If you lack fluency in reading, writing, and speaking Chinese, you may encounter significant difficulties moving forward.