What is the Severance Agreement service?
Given that there is no “at-will employment” in China, improper termination of employment contracts often results in disputes and sometimes wrongful termination compensations. Employment arbitration in China is time-consuming and likely to result in favour of employees rather than the business. Therefore, should terminations arise, it is prudent for companies to have written agreements that comply with local regulatory requirements and avoid labour disputes.
Having an experienced lawyer draft a Severance Agreement tailored for your business will not only ensure the terminated employees comply with contractual obligations but also make sure your company complies with the local regulatory requirements.
English and Chinese versions of the Severance Agreement will be delivered to your Trustiics dashboard in 5 business days once all necessary information is provided to the lawyer.
Value and Benefits
High-quality and reliable: the agreement will be drafted in both English and Chinese languages by a lawyer with solid experience in employment law advising international clients in China. This guarantees you will satisfy your internal compliance requirements and comply with the regulatory requirement in China.
Fast and efficient: service provided by a vetted, experienced legal professional within 5 business days and sent directly to your dashboard.
Convenient: you don’t need to find an English-speaking lawyer in China by yourself or worry about making an international wiring payment.
Secure: all the data and information are transported on the secured Cloud operated by Amazon Web Service.
Private and direct: one-on-one communication and messaging available with the lawyer through your dashboard.
Transparent and affordable: The price for such a service provided by top-tiered lawyers in China is unbeatable. There is no hidden subscription fee. You don’t pay until the lawyer delivers the service.
Typical Use Scenarios
It is advised to have a lawyer draft a severance agreement when:
Your company is going to terminate any individual employee; or
Your company plans to lay off multiple employees due to company restructuring, closure of your business operation in China or exiting the China market.
One of the following lawyers will provide the service after the request is placed.
Sylvia has over 15 years of experience and has advised many international companies in their China-related investments, transactions, compliance and regulatory challenges and daily operational legal issues under Chinese law.
Frequently Asked Questions
Is the Employee Termination and Severance Agreement the same as a Severance Agreement?
Why is it important to sign a legally binding Severance Agreement with departing employees?
When your business terminates an employee’s contract, it is crucial to ensure there is no dispute with the employee, and the termination will not violate local employment law. A legally binding Severance Agreement clarifies the rights and obligations of both the employer and the employee so that the employee will not sue the employer. An agreement prepared by an experienced lawyer assures compliance with the local employment regulations, usually very complicated.
Will “severance pay” be covered by the Severance Agreement?
Yes. “Severance pay” refers to the financial compensation to be received by the terminated employee, and how it is calculated are important clauses included in a Severance Agreement.
Can I use a Chinese translation of my standard Severance Agreement from my own country, such as my previous ones in the U.S.?
No. Because each country has its own employment law, you will need to use China-law governed Severance Agreement when you terminate employees in China.
Can I use this Severance Agreement to lay off employees in different regions in China?
Yes, you can use the same Severance Agreement to lay off or terminate employees in different regions in China. However, it is strongly suggested to have the lawyer be aware of each city or province where you are dismissing employees. The reason is that the lawyer will consider the specific local employment regulations if varies when preparing the agreement.
Why do I need a lawyer to draft the Severance Agreement instead of Googling a template?
There are two significant benefits to engaging an employment lawyer to draft the Severance Agreement:
- A customized Severance Agreement prepared by an experienced lawyer will comply with local employment law (such as restrictions on non-compete arrangements), and therefore it will be legally binding on employees and enforceable against them if they change their minds later; and
- The agreement will be up to date and reflect any recent changes in employment rules and regulations, and therefore satisfy all your internal and external compliance requirements.