{"id":43275,"date":"2025-04-02T08:24:49","date_gmt":"2025-04-02T08:24:49","guid":{"rendered":"https:\/\/studiozunarelli.com\/2025\/10\/02\/china-attention-to-the-renewal-of-fixed-term-contracts-companies-risk-open-ended-employment-contract\/"},"modified":"2026-02-17T12:00:17","modified_gmt":"2026-02-17T12:00:17","slug":"china-attention-to-the-renewal-of-fixed-term-contracts-companies-risk-open-ended-employment-contract","status":"publish","type":"post","link":"https:\/\/studiozunarelli.com\/en\/china-attention-to-the-renewal-of-fixed-term-contracts-companies-risk-open-ended-employment-contract\/","title":{"rendered":"China: attention to the renewal of fixed-term contracts, companies risk open-ended employment contract"},"content":{"rendered":"

An analysis of the new guidelines provided by the High People\u2019s Court of Shanghai and their implications for companies and employees<\/em>.<\/p>\n

On January 1, 2025, the Extracts of Opinions on Difficult Labour Disputes Issues<\/strong> (hereinafter referred to as the \u201cOpinions\u201d), published by the Shanghai High People\u2019s Court<\/strong>, came into force, also in the face of the increasing number of layoffs and the rise in the unemployment rate in China.<\/p>\n

This document represents a significant update in Chinese labor law<\/strong>, providing clarifications on complex legal issues that, until now, have caused interpretative and practical uncertainty. Among these issues is the employee\u2019s right to establish an open-ended contract<\/strong> upon the completion of the second fixed-term contract with the employer.<\/p>\n

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    Legal value and relevance<\/h3>\n<\/li>\n<\/ol>\n

    The Opinions are part of the wider context of efforts towards standardization and predictability in China\u2019s labour law system, an aspect that is increasingly important in a country where the labour market is constantly changing. Although not legally binding, the views expressed in the Opinions \u2013 especially the majority views \u2013 significantly influence the direction of local courts, serving as guidance for judges, lawyers, and legal practitioners in resolving labor disputes.<\/p>\n

    An interesting aspect of the Opinions is the presence of both majority and minority views. This approach reflects the High People\u2019s Court\u2019s intention to offer a broad and articulated view of the legal debate, allowing legal professionals to evaluate different nuances of interpretation.<\/p>\n

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    1. \n

      Regulatory framework<\/strong><\/h3>\n<\/li>\n<\/ol>\n

      The recent intervention by the Shanghai High People\u2019s Court falls within a regulatory framework that already provides \u2013 at least in theory \u2013 significant protection for employees<\/strong> in terms of job stability. Specifically, Paragraph 2, Article 14 of the Labor Contract Law of the People\u2019s Republic of China (2007) states:<\/p>\n

      \u201cIf an employer consecutively concludes two fixed-term contracts with the same employee, and the employee is not in any situation that allows the termination of the employment relationship under the law, upon the expiration of the second contract, if the employee requests an open-ended contract, the employer shall conclude it<\/em>\u201d.<\/p>\n

      This provision grants the employee the right to obtain an open-ended contract, subject to two conditions:<\/p>\n