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Provisional Regulations on Institution Of Labour C
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1986.10.01
STATE COUNCIL OF CHINA
PROVISIONAL REGULATIONS ON INSTITUTION OF LABOUR CONTRACT SYSTEM IN
STATE-OWNED ENTERPRISES
(Issued by the State Council on July 12, 1986)
                CONTENTS
CHAPTER I GENERAL RULES
CHAPTER II RECRUITMENT AND EMPLOYMENT
CHAPTER III SIGNING, MODIFICATION AND TERMINATION OF LABOUR CONTRACT
CHAPTER IV IN-SERVICE REMUNERATION AND JOB-WAITING BENEFITS
CHAPTER V RETIREMENT BENEFITS
CHAPTER VI ORGANIZATION AND MANAGEMENT
CHAPTER VII SUPPLEMENTARY PROVISIONS
            CHAPTER I GENERAL RULES
Article 1 The present Regulations are specially drawn up for the purpose
of reforming the labour system in State-owned enterprises, strengthening
their vitality, tapping to the full the initiative and creativeness of
the workers, protecting their legitimate rights and interests, and
promoting socialist modernization.
Article 2 Enterprises recruiting workers for regular jobs within the
targets of the State labour and wage plans shall practise the unified
labour contract system, except otherwise stipulated by the State. The
form of employment can be varied in accordance with the needs and
characteristics of work and production. It can be long-term workers of
five years and more, short-term workers from one to five years, and
workers on a regular rotation basis. However, a labour contract shall be
signed for all of these forms in accordance with the Regulations.
The contract is also applicable to casual and seasonal workers  with
terms of less than a year.
Article 3 Workers under the labour contract system enjoy equal rights as
permanent workers to labour, work, study, participation in democratic
enterprise management, and acquiring political honours and material
incentives.
         CHAPTER II RECRUITMENT AND EMPLOYMENT
Article 4 In recruiting labour-contract workers, the enterprises shall,
under the guidance of local labour administration, follow the principles
of  open competition, application on a voluntary basis,  overall
evaluation of moral characters, intelligence and physique, and giving
priority to the best. The employment procedure shall be completed by the
enterprise with local labour administration. The focus for evaluation of
re-employed workers shall be on their skills. Those who are qualified
shall be given the priority.
Article 5 A Labour Manual system shall be introduced for labour-contract
workers.
The Labour Manual will be issued by the Ministry of Labour and Personnel
Affairs.
Article 6 While recruiting labour-contract workers, the enterprise shall
state explicitly in the contract a probational period. It can be between
three and six months, to be decided by the enterprise in line with
different kinds of job.
 CHAPTER III SIGNING, MODIFICATION AND TERMINATION OF LABOUR CONTRACT
Article 7 When signing the labour contract, the enterprise and the
workers shall abide by State policies and regulations, persist in the
principles of equality, voluntariness and negotiations, and state in
written form the responsibility, obligations and rights of both parties.
Once the contract is signed, it comes under the protection by the law,
requiring strict observance by the parties involved.
Article 8 The contents of the labour contract shall include:
(1) Quantity and quality targets of production, or the task to be
completed;
(2) The length of probation and contract;
(3) Conditions of production and work;
(4) Remuneration, insurance and benefits;
(5) Labour discipline;
(6) Responsibility to be taken by violators of contract;
(7) Other matters that are deemed necessary by the two parties.
Article 9 The length of the labour contract shall be determined by the
enterprise and the worker through negotiations.
Execution of the labour contract shall terminate at its expiration. It
can be renewed with full agreement of both parties in accordance with
the needs of production and work.
The labour contract for workers on rotation must be terminated upon its
expiration.
Article 10 The related contents of the contract can be modified when the
enterprise, with the approval of competent authorities at the higher
levels, has to change the line of production, readjust production tasks,
or when the situation changes, through negotiations by the two sides.
Article 11 The transregional transfer of a contract worker, owing to
needs of production and work, or government regulations, shall be
approved by the labour administration of the regions concerned, and move
with his residence registration and retirement pension fund. He can
terminate his contract with his enterprise and sign another contract
with the receiving unit.
Article 12 The enterprise can terminate the labour contract in any of
the following situations:
(1) It is discovered that the contract worker does not qualify for the
employment

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