The outbreak of the 2019 Novel Coronavirus (now designated COVID-19) caused massive disruption in China, including a nationwide extension of its Spring Festival holidays. Though February 10, 2020, was the last “public holiday,” some businesses remain closed, and many still encourage China-based employees to work from home. Now that most of China is returning to work, below are a few updates for employers with China operations as they continue to monitor government directives and market conditions.
To stabilize labor relations during this period of uncertainty due to the COVID-19 epidemic, the Ministry of Human Resources and Social Security and the All-China Federation of Trade Unions (ACFTU) jointly released the Opinions on Stabilizing Labor Relations and Supporting Enterprises’ Resumption of Work and Production (关于做好新型冠状病毒感染肺炎疫情防控期间稳定劳动关系支持企业复工复产的意见) on February 7, 2020. The Ministry of Human Resources and Social Security of the People’s Republic of China (a ministry under the State Council which is responsible for national labor polices, standards, regulations, and managing the National Social Security Fund) and the ACFTU (the nationalized organization federation of the People’s Republic of China, and the only legally permissible trade union) set forth several nonbinding guidelines designed to support employee relations, including, in relevant part, the following:
- Employers and employees are encouraged to resolve employment issues through negotiation before employees return to work.
- In order to avoid crowds gathering, employers are encouraged to consult with employees to adopt flexible working methods, such as shift rotations and flexible commute times.
- Employers are required to provide routine cleaning on all frequently touched surfaces in the workplace, and provide employee protection measures if possible. (See Guidelines for Hygienic Protection From Pneumonia Caused by Novel Coronavirus Infections in Public Places [公共场所新型冠状病毒感染的肺炎卫生防护指南].) Examples of protection measures might include supplying face masks and hand sanitizer, posting signs on proper handwashing, etc.
- If an employee is unwilling to return to work and lacks a valid reason, the employer shall first attempt to persuade the employee to return to work, and if the employee without justification still refuses to come back to work, the employer can discipline the employee according to applicable law or internal policies.
- Note: This point addresses payment, not leave balance, and most likely, employers can reasonably count these leaves against “sick leave” accrual as long as they pay full wages under each of these circumstances. For those employees who have already exhausted sick leave, employers may want to carefully review their policies and procedures before counting this type of leave against annual leave balances.
- In circumstances other than infection, close contact, or government-imposed quarantine or emergency measures, with employees affected by the epidemic and unable to resume regular work on time or employers unable to resume operations, employers are encouraged to proactively communicate with their employees. If possible, employers may want to consider arranging for employees to work from home, and if working remotely is not possible, employers may consult with employees about prioritizing to take vacation days or employer-provided leave.
- Employers that are experiencing difficulties in production and operation as a result of the coronavirus outbreak are encouraged to discuss with their employees salary adjustments, shift rotations, reductions of working hours, or other ways to stabilize their workforces. Employers that are unable to pay salaries are encouraged to consult on deferred salary payments with the workers’ union or worker representatives.
- The Chinese government will take certain steps to reduce the burden on employers:
- Reducing recruitment costs: The Chinese government encourages employers to use online recruitment services by creating online platforms, promote remote interviews, and improve the direct point-to-point connection rate between recruiting companies and potential employees. The government will also monitor closely the service fees charged by recruiting agencies, and encourage agencies to provide free services to those employers that have been severely affected by the coronavirus outbreak.
- Reasonably sharing the cost of job stabilization: The Chinese government has encouraged employers to take advantage of unemployment insurance, the employee training subsidy, and funds for small business.
- Training: The government has opened all functions of the government-owned website China Vocational Training Online to the public, which provides complimentary trainings and teaching resources for employees.
Employers can glean from the February 7, 2020, opinions that the government expects employers to take reasonable precautions to prevent infection and to collaborate with employees in good faith on matters affecting workforces. The guidance specifies no enforcement measures, and it appears that the government is unlikely to impose fines or administrative penalties based solely on these guidelines—but employers may want to consider aligning their actions with the guidelines in case an employee or union mounts a challenge. Employers may also want to pay attention to similar publications from local authorities such as local governments, municipal and provisional human resources, and the social security bureau.
The opinions further underscore an important point applicable to China employers generally: any disciplinary or workplace action affecting employees relies on properly implemented work rules.
Employers may want to use this opportunity to check their handbooks and local policies for the following:
- Proper implementation: Before an employment policy can become effective, Chinese employers (whether unionized or not) are required by law to consult with employees on it and provide them an opportunity to give feedback.
- Chinese language availability: Employment policies are difficult to enforce if they are in English only; in some localities, the Chinese language is required.
- Coverage of relevant subjects: Consider reviewing handbooks and other materials to assess whether subjects such as annual and sick leave accruals, requirements for applying for and taking leave (e.g., medical certifications and return-to-work documentation), disciplinary regulations, remote work policies, and workplace safety/sanitation have been addressed.