Shall we give a 30 days’ notice to the employee for the expiration of his/her labor contract?

The labor contract signed between a company in Beijing and Tian is valid until October 8, 2021. The company sent a renewal notice to Tian on October 8, 2021, but the two parties did not reach an agreement on the renewal afterwards. Later, Tian filed a labor arbitration, one of his claims is that he requested the company to pay compensation for failure to provide 30 days prior notice. The labor arbitration, the court of the first instance, and the court of the second instance all supported this claim ((2023) Jing 02 Min Zhong 7836).

Many people may be surprised at this result. Because it is widely recognized that Article 40 of the “Labor Contract Law” clearly stipulates that if an employer unilaterally terminates a labor contract in accordance with the law, it should give a 30 days’ notice in advance or pay one month salary in lieu of the notice period, while Article 44 does not specify the prior notice period for the expiration of a labor contract. However, the result in the aforementioned case has a local regulation as its legal basis.

Article 47 of the “Beijing Labor Contract Regulations” (implemented in 2001 and revised in 2021, this Article 47 had been implemented in 2001) stipulates, “If an employer violates Article 40 by terminating the labor contract without notifying the employee 30 days in advance, the average daily wage of the employee in the previous month shall be used as the standard, and compensation for one day of delay shall be paid to the employee.”. Therefore, the company in the aforementioned case was ordered to pay such compensation.

How about other cities and provinces?

After sorting out, it is found that in Hubei province and Jiangsu province, such prior notice period is stipulated in local regulations, but those regulations have not specified any liabilities. In addition, after searching relevant cases in those provinces, no cases have been found where an employer is ordered compensation due to lack of prior notice.

In several other cities and provinces, there is a slight difference, that is, the relevant local regulations have not stipulated such prior notice period, however, there is a provision for a 30 days’ prior notice in the labor contract template. For example, the Annex of the “Labor Contract Template” attached to the “Notice on Further Strengthening Labor Contract Management in Zhejiang Province (2003)” has such provision. However, similarly, no cases have been found in those provinces and cities, where an employer is ordered compensation due to lack of prior notice.

In summary, it is recommended that employers pay attention to whether there are relevant requirements in the local regulations regarding the prior notice period for the expiration of labor contracts. To put it another way, even if there are no such requirement in the local regulations, from the perspective of compliance management and risk reduction, it is recommended to give a 30 days’ prior notice to employees if there are no special circumstances. By doing so, employers could avoid the neglect of the management of labor contracts, which resulted in the expired labor contract directly becomes an open-ended labor contract, or double wages should be paid when the labor contract is not signed in a timely manner. In addition, the employer could well arrange the handover of work and the unused annual leave, and so on.