Job Description
A GOOD JOB DESCRIPTION FOR YOUR EMPLOYEES IN CHINA IS KEY
September 1, 2020
Almost all employment contracts in China include clauses describing the position, scope of work and duties of each employee. They are such common clauses that many employers underestimate their importance to a practical binding relationship and as the basis of the employer’s legal rights vis-à-vis its employees in the employment relationship. When dismissal becomes necessary, the written job description can be key.
Each employee’s position and duties should be identified, but why is a careful description of the scope of work especially important? Of course, it sets out the work to be handled, which is one of the main terms of employment. But even more importantly from a legal and practical perspective, this description can be used as a key standard to support the employer’s decision to terminate the employment contract if an employee’s performance is not satisfactory.
Unlike the law of most U.S. states, Chinese employment laws do not permit at-will termination of an employee. If the employer intends to terminate a contract with an employee unilaterally without mutual agreement (i.e., involuntary termination), the reason for the termination must fall within the limited statutory grounds set out in the Employment Contract Law of the PRC. That is, the employer must have legal grounds to dismiss an employee.
Among legitimate legal grounds is “incompetent for the job”, in practice surely one of the most typical reasons for an employer to want to dismiss an employee. Under the rubric of incompetence, for example, an employer may decide to terminate because the employee is “not proactive enough”, “his/her response is not fast enough”, or “he/she cannot speak or understand English well”.
Although these may be sound business grounds, none are sufficient legal grounds to terminate without demonstrating that the employee did not fulfill his or her duties, i.e., did not satisfy the scope of his or her employment. In practice it is very challenging to win an involuntary termination case on the basis of employee incompetence. A statistical review of rulings in Chinese courts shows that employers lose 90% of termination disputes brought on grounds of employee incompetence, and around 1/3 of those losses can be attributed to the employer’s failure to produce sufficient evidence. Thus, solid and convincing support is vital for an employer to prevail when involuntary terminating on the basis of the employee’s incompetence.
How to draft a job description that can be used to support an incompetence-based termination claim? There are no official standards or guidelines, and, in practice, the employer’s claim will be reviewed based on the specific facts and circumstances of the work situation. Judges in different cities or even different districts may have different opinions and follow local practices regarding the quantum of evidence required to prove incompetence. That said, we offer the following suggestions regarding the description of scope of work and job duties in employment contracts to facilitate proof of incompetence if a dispute should arise:
In addition to scope of work, the employment contract should include job standards the employee is required to follow and benchmarks to measure achievement. Although this sounds like common sense, we have seen many employment contracts listing only the position and scope of work without including standards or benchmarks. It may be difficult to quantify standards or an employer may have a concern that detailed requirements may deter qualified candidates from considering the job. These concerns are understandable, but completely omitting specifications leaves an employer with few options if an employment relationship turns sour and the employee does not agree to leave voluntarily. Typically the employer is forced to pay the employee a premium to agree to mutually terminate the relationship.
Almost all employment contracts in China include clauses describing the position, scope of work and duties of each employee. They are such common clauses that many employers underestimate their importance to a practical binding relationship and as the basis of the employer’s legal rights vis-à-vis its employees in the employment relationship. When dismissal becomes necessary, the written job description can be key.
Each employee’s position and duties should be identified, but why is a careful description of the scope of work especially important? Of course, it sets out the work to be handled, which is one of the main terms of employment. But even more importantly from a legal and practical perspective, this description can be used as a key standard to support the employer’s decision to terminate the employment contract if an employee’s performance is not satisfactory.
Unlike the law of most U.S. states, Chinese employment laws do not permit at-will termination of an employee. If the employer intends to terminate a contract with an employee unilaterally without mutual agreement (i.e., involuntary termination), the reason for the termination must fall within the limited statutory grounds set out in the Employment Contract Law of the PRC. That is, the employer must have legal grounds to dismiss an employee.
Among legitimate legal grounds is “incompetent for the job”, in practice surely one of the most typical reasons for an employer to want to dismiss an employee. Under the rubric of incompetence, for example, an employer may decide to terminate because the employee is “not proactive enough”, “his/her response is not fast enough”, or “he/she cannot speak or understand English well”.
Although these may be sound business grounds, none are sufficient legal grounds to terminate without demonstrating that the employee did not fulfill his or her duties, i.e., did not satisfy the scope of his or her employment. In practice it is very challenging to win an involuntary termination case on the basis of employee incompetence. A statistical review of rulings in Chinese courts shows that employers lose 90% of termination disputes brought on grounds of employee incompetence, and around 1/3 of those losses can be attributed to the employer’s failure to produce sufficient evidence. Thus, solid and convincing support is vital for an employer to prevail when involuntary terminating on the basis of the employee’s incompetence.
How to draft a job description that can be used to support an incompetence-based termination claim? There are no official standards or guidelines, and, in practice, the employer’s claim will be reviewed based on the specific facts and circumstances of the work situation. Judges in different cities or even different districts may have different opinions and follow local practices regarding the quantum of evidence required to prove incompetence. That said, we offer the following suggestions regarding the description of scope of work and job duties in employment contracts to facilitate proof of incompetence if a dispute should arise:
In addition to scope of work, the employment contract should include job standards the employee is required to follow and benchmarks to measure achievement. Although this sounds like common sense, we have seen many employment contracts listing only the position and scope of work without including standards or benchmarks. It may be difficult to quantify standards or an employer may have a concern that detailed requirements may deter qualified candidates from considering the job. These concerns are understandable, but completely omitting specifications leaves an employer with few options if an employment relationship turns sour and the employee does not agree to leave voluntarily. Typically the employer is forced to pay the employee a premium to agree to mutually terminate the relationship.
Don’t state the job requirements too generally or broadly. Terms such as “satisfactorily”, “timely”, and “high standard” will likely be considered by a labor tribunal or court to be too general in the event of a dispute. On the other hand, if the job specifications are too narrow or strict, they may unnecessarily increase the difficulty of recruiting qualified candidates. A good job specification should be reasonable and practical, balancing the employer’s demands and the employee’s practical concerns.
Try to set objective standards, especially relating to work quality, efficiency and language skills expected from the employee. For example, instead of stating that the employee should possess good writing skills, the employer may specify that acceptable reports or emails drafted by the employee should not contain any major errors and no more than two or three minor errors.
Carefully balance the job requirements specified in the employment contract with company policies. Many employers and HR managers rely too much on company policies and the employee handbook for details of rules and standards employees must meet. It should be noted that, under Chinese law, company policies must be formulated through a democratic conciliation process by seeking the opinions of all the employees or the employee representatives. Also, they must be read and signed by the each employee for the rules in the policies to be binding on that employee. By including all detailed requirements in company policy documents or the employee handbook, the employer increases its risk because it must prove in court that these policies and the company rules are legally valid and bind the individual employee to the dispute, i.e, that the employee read and signed them.
Include some catchall terms. Catchall terms are not panaceas and more often than not they will be rejected by a labor tribunal or court. That said, they serve to show the mutually agreed intentions and goals of the parties, and there should be no harm to add them to the job description, e.g., “complete other related work according to the standard and time required by the managers of the company”.
While there are many factors to consider when implementing an involuntary termination, we hope that the above tips will help you prepare to increase your chance of prevailing in an employment dispute in China by having a well-planned employment contract in place.
While there are many factors to consider when implementing an involuntary termination, we hope that the above tips will help you prepare to increase your chance of prevailing in an employment dispute in China by having a well-planned employment contract in place.
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By Jeff Sun with Allan Marson. Jeff is a founding partner of Jaguar Law in Beijing, P.R.C. and Allan is the founder of Marson Law, P.C. in Palo Alto, CA, U.S.A.
