Under the Labour Law, a labour contract must be signed between an individual worker and an enterprise, or workers may sign a collective contract with the enterprise. The contract forms the basis of labour relation between the enterprise and the employee.

In recruiting staff, an enterprise should obtain the relevant particulars of the candidates and check the validity of their documents before signing labour contracts with them.

The Labour Law and other relevant regulations clearly state the mandatory terms and conditions to be included in a labour contract, such as the term of the contract, conditions for changing, dissolving or terminating the contract, as well as compensations in the event of dissolving the contract. The Labour Handbook provided by the local labour department should be used as reference by enterprises in formulating their labour contracts.

7.2.2 Contract Authentication

Contract authentication is a legal process whereby the labour administrative department conducts full-scale examination, verification and validation of all labour contracts signed between an enterprise and its employees. Hence, the process confirms the legality of a labour contract. At present, it is compulsory for all labour contracts signed between enterprises and their staff to be authenticated.

The enterprise should submit the labour contract to the local labour administrative department for authentication within 30 days after the commencement of service by an employee upon signing a labour contract. In the case of collective labour contracts, they should be filed with the local labour administrative department for the record. Collective contracts automatically enter into force 15 days after the date of receipt by the labour department if no objection is raised during that period.

The following documents are required for contract authentication (the list may vary in different localities, so enquiry at relevant local departments is advised):

(a) Labour contract and its copy;

(b) Business licence or its copy;

(c) Proof of identity of legal representative or authorised person;

(d) Identity card or proof of domicile registration of the employee;

(e) Proof of education attainment, medical report, Labour Handbook, and other relevant information of the employee.

7.2.3 Personal Files Management

An enterprise or its resident representative office may entrust a service agency specialised in human resources employment to manage the personal files of its mainland staff. Such agencies should be located at the place of domicile registration or current work place of the staff concerned. The services they offer include verification of the staff's identity, salary track record and political reports (for overseas travel). Other services such as assessment of technical qualifications, contract authentication and social insurance are also provided.

7.2.4 Foreigners Working in China

According to stipulations, foreigners (including Hong Kong residents) are allowed to work in China. Any organisations or individuals employing foreigners (including Hong Kong residents) in the mainland are required to complete the necessary formalities with the labour bureau which is responsible for granting approval and handling registration. Otherwise, the employees and employers concerned would become "illegal workers" and "illegal employers" and may be fined or even prohibited from working in the mainland.

(a) Departments Responsible for Administration of Employment of Foreigners in China

The labour administration departments at provincial, autonomous region and municipal levels and their authorised labour administration departments at prefecture and city levels are responsible for the administration of employment of foreigners in China.

(b) Criteria for Foreigners Taking up Employment in China

• At least 18 years of age and in good health;
  
  
• Possessing the professional skills and working experience required for the work of intended employment;
  
  
• No criminal records;
  
  
• Having a confirmed employer;
  
  
• Having a valid passport or other international travel documents;
  
  
• Being able to obtain employment and residence permits for foreigners upon entry into China.

(c) Application Procedures for Foreigners Taking up Employment in China

China has a more liberal and pessimssive foreign labour policy than Hong Kong or other western countries. Hong Kong residents or foreigners wishing to work in the mainland are only required to register with the "foreign labour employment service centre" under the local city-level labour bureau by presenting the following documents:

The term of the employment permit for foreigners (including Hong Kong residents) issued by various mainland cities depends on the duration of the current labour contract and is usually one or two years. It is advisable to apply for extension of the employment permit within one month before its expiration as overdue applications are not only more costly and time-consuming but also involve more complicated procedures. Formalities for extending the employment permit are as follows: