Circular on the Proper Handling of Labor Relations Issues During the Novel Coronavirus Outbreak Prevention and Control Period (Mainland China)

Joyce Wen

The General Office of the Ministry of Human Resources and Social Security issued on January 24, 2020 the Circular on the Proper Handling of Labor Relations Issues During the Novel Coronavirus Outbreak Prevention and Control Period (the “Circular”).  The Circular aims to properly handle labor relations, protect the rights and interests of employees, ensure that enterprises may maintain a normal order of production and operation, and promote harmonious and stable labor relations during the disease prevention period.  The Circular primarily covers the following three aspects:

1. Labor contracts shall not be terminated at will. For workers infected or suspected to be infected with the novel coronavirus, as well as workers in close contact with the above who cannot provide their labor services due to quarantine, medical observation or other emergency measures by the government, the enterprises shall pay the workers their wages during such period and shall not terminate the labor contract via Articles 40 and 41 of the Labor Contract Law. If a labor contract expires during such period, the contract will be extended to the end of such period.

2. Workers’ rights such as wages shall be protected pursuant to law. If an enterprise suffers difficulties in its production and operation due to the outbreak, it may adopt methods such as wage adjustment, shift rotations, and shortening of work hours to stabilize work positions after consulting the workers, and strive to avoid or reduce layoffs. Eligible enterprises can receive job stabilization subsidies pursuant toapplicable regulations.  If an enterprise suspends production within a wage payment cycle, the enterprise shall pay wages to the employee in accordance with the standards stipulated in the labor contract.  In case such suspension period exceeds one wage payment cycle, if the workers provided normal services, the wages paid shall not be lower than the local minimum wage; if the workers have not been able to provide normal services, the enterprise shall pay living expenses.  The living expenses standards shall be implemented in accordance with the measures prescribed by the provinces, autonomous regions and municipalities under the direct jurisdiction of the State Council.

3. Labor disputes shall be properly mediated.  If the parties cannot apply for labor dispute arbitration within the statute of limitations for statutory arbitration due to the outbreak, the statute of limitations for arbitration shall be suspended and will not resume until the day when the cause for suspending the statute of limitations is eliminated.  If it is difficult for the arbitration institution handling the labor disputes to timely hear the case due to the outbreak within the statute of limitations, the relevant deadline for hearing such cases may be extended accordingly.