Labour law risk control in the recruitment process

By Ivy Zhang, Rui Bai Law Firm
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On 18 February 2019, the Ministry of Human Resources and Social Security, together with eight other departments, issued the Notice on Further Regulating Recruitment and Promoting Women’s Employment. The most notable provision is “prohibition of gender discrimination in the recruitment process”, with changes including employers must not ask about a female candidate’s marital and childbearing status, and penalties of up to RMB50,000 (US$7,450).

The notice caused widespread concern and discussion. In the author’s view, most of the news and interpretations are “clickbait”, which may easily create misunderstanding with readers. According to articles 2 and 3 of the notice, inquiring about the marital and childbearing status of female candidates does not directly lead to administrative penalties. An employer will receive a fine of between RMB10,000 and RMB50,000 only if it publishes recruitment information containing gender discrimination content, and refuses to make corrections after being order to.

Nevertheless, the employer needs to pay attention to labour law risk control in the recruitment process. Labour risks may arise from the moment when a recruitment advertisement is posted. This article discusses some misunderstandings and traps that employers should try to avoid during the recruitment process.

Ivy Zhang
Senior Attorney
Rui Bai Law Firm

Avoid employment discrimination in recruitment advertisements. The PRC Employment Promotion Law provides that employees must not be discriminated against on the basis of ethnicity, race, gender and religious beliefs. An employee is entitled to file a lawsuit directly with the court if they encounter discrimination.

Generally, it would suffice to state in a recruitment advertisement the work location, salary package, academic requirements, work experience, ability and qualifications, and other content directly related to the position. There is no need to mention unrelated or less relevant factors such as gender, marital and childbearing status, ethnicity, household registration, etc, which may cause an unnecessary negative influence on public opinion, or even lawsuits against the employer.

Application form is important. Most employers require candidates to fill out a personal information form stating their basic personal information, education background, work experience, etc. It is recommended that the employer include an employee statement in the form, requiring the employee to undertake that all the information submitted is true and accurate, and to voluntarily bear the relevant legal consequences.

The principle of good faith is one of the basic principles in labour relations. In practice, there have been cases where the employer finds a new employee’s performance is not satisfactory and further investigation reveals that the employee has lied on his or her resume, or seriously exaggerated past work experience and achievements. Under these circumstances, the information provided by the employee at the time of application can be used as key evidence for consultation and negotiation with the employee.

Add recruitment requirements in the offer letter. Recruitment requirements are often missing from offer letters. The law is silent on recruitment requirements and allows employers to set the requirements or stipulate them with employees. If an employer does not set recruitment requirements and both parties do not have agreement in this regard, then it would be very difficult for the employer to terminate an employment contract with the employee on the ground of failure to meet recruitment requirements.

Requirements generally would include background checks, work ability, professional ethics, labour disciplines, etc. From a practical point of view, the recruitment requirements should be as specific and quantified as possible so that they can be used in the future.

Are job duties the same with recruitment requirements? In practice, recruitment requirements are often mixed up with job duties. But they are different from every aspect including content, application and purpose.

Recruitment requirements are only applicable in a probation period, and used by employer to determine whether an employee is fit for a position or not. If an employer does not dismiss an employee on the ground of failure to meet recruitment requirements before the expiry of the probation period, then by default the employee will be considered as having passed probation. The employer will lose the right to dismiss the employee on such ground after the probation period.

Job duties are what employees should do in their work. If an employee does not perform job duties, he or she may violate the employer’s internal policies such as absenteeism, disobeying instructions, etc. If the employee cannot perform job duties to the satisfaction of the employer, incompetence issues may arise.

Can an employer revoke an offer letter? It happens in practice that an employer is unable to hire an employee after the offer letter has been issued. The parties have not established an employment relationship because the employee has not started working for the employer. Thus, labour laws will not apply to such a situation.

However, the Contract Law provides liabilities for a contracting fault. In many cases, the offer letter is a valid offer as defined by the Contract Law (and will be an agreement binding on both parties if both parties sign). If an employee suffers losses due to the employer’s breach of the offer letter, the employee has the right to ask for compensation, such as rent or moving expenses incurred due to preparation for the new job. In Shanghai’s judicial practice, the court may rule in favour of the employee and support a discretionary compensation based on salary standard, such as three months.

All in all, labour risk control is a systematic process that requires employers to invest resources to build and maintain. In the process of handling labour disputes, the author inevitably encounters cases in which employers lose due to the lack of sound employment management systems. It is recommended that employers sort out their employment management systems, employment document templates, practical operations, management practices and the like, to check for loopholes to due compliance management and mitigate labour risks.

Ivy Zhang is a senior attorney of Rui Bai Law Firm. Rui Bai and Xin Bai are members of the PwC global network of firms.

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Shanghai 200021, PRC
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