Publications

In the previous issue of ‘What should a creditor do if the debtor goes bankrupt? (1)’, we have analyzed the types of debt assets and the impact of whether the debtor has entered the litigation process on debt recovery. This issue will introduce various measures for safeguarding rights under special circumstances. Scenario 1: Creditors and debtors have debts toward each other. According to Article 40 of the “Enterprise Bankruptcy Law”, the creditor may propose to the administrator to set off the debt prior to the acceptance of the bankruptcy application. It should be noted that in order to avoid malicious…

If a company was deregistered, the labor contracts between it and its employees shall be terminated. However, in practice, there is dispute regarding the termination of labor contracts where a branch was deregistered. Because according to the “Company Law”, a branch does not have the corporate capacity and its liability shall be borne by the company. The reason for this dispute is the different interpretations of Article 44 (5) of the “Labor Contract Law”. Article 4 of the “Implementation Regulations of the Labor Contract Law” stipulates that, a branch which has obtained a business license, is entitled to conclude labor…

When an enterprise enters bankruptcy proceedings due to insolvency, the bankruptcy administrator will be responsible for distributing the remaining assets. As a creditor, normally, it could only declare its claim and wait for distribution, and the results of distribution are often unsatisfactory.   In fact, in regarding the type of a debt, the litigation status of related debt, etc., creditors may take more measures to recover more debts. (Note: This article will not mention the situation of bankruptcy of real estate development enterprises, as there are special regulations for this industry.) Firstly, to check whether the debt related property shall…

Recently, “layoffs” or “salary cuts” frequently popped up on social media. Employers believe that they could independently determine the salary level of all employees according to Article 47 of the “Labor Law”, which prescribes that, “An employer shall, in light of the characteristics of its production and business operations and its economic benefits, independently determine its own salary distribution measures and salary levels.” Employees believe that the salary level could only be changed based on employees’ consent according to Article 35 of the “Labor Contract Law”, which prescribes that, “Upon negotiation and consensus between an employer and an employee, the…

In contract dispute cases, if a court determines that the defendant has breached the contract, it often orders the defendant to pay liquidated damages. Whether the plaintiff should issue an invoice for such liquidated damages? Firstly, for those who are ordered to bear compensation liability due to the fault of one party in the contract, since the contract has not been established, is invalid or revoked, which means the business has not actually occurred, the plaintiff should not issue an invoice. Article 29 of the “Implementing Rules for the Administrative Measures for Invoices” (2024 Edition) prescribes that, where an invoice…

According to Article 40 of the “Labor Contract Law”, an employer could unilaterally terminate the labor contract with its employee who suffers from an illness or a non-work-related injury and is unable to undertake the original job duties or other job duties arranged by the employer following completion of the medical treatment period. Literally speaking, there are two prerequisites, which are, the employee is unable to undertake the original job duties, in addition, the employee is unable to undertake the other job duties arranged by the employer. Generally speaking, the first prerequisite refers to an employee who still needs medical…

A creditor applies for compulsory enforcement, if the court discovers that the debtor has real estate, movable property, or other property rights (such as equity), the court would auction such properties. However, if auction fails in a judicial auction, what could creditors do? Whether those properties could be used to offset the debt? According to the relevant provisions of the ” Provisions of the Supreme People’s Court on Auctioning or Selling off Property by People’s Courts in Civil Execution (Amended in 2020)” (hereinafter referred to as the “Auction Provisions”), the process of a judicial auction is as follows: The court…

On May 12, 2024, the All-China Federation of Trade Unions published an article titled as “A company fired an employee who was late 98 times with 2N compensation” ?!”. In this article, the company fired an employee who was late 98 times, however, both the Beijing Fangshan District People’s Court and the Beijing Second Intermediate People’s Court determined that such termination is illegal. This article has a ripple effect. Because the management of attendance is very important for enterprises, many of whom have stipulated punishment rules for being late and leaving early in their internal rules and regulations. If such…

Nowadays goods are being updated frequently. Consumers don’t have any trouble with the updated FMCG, however, there are troubles with those updated durable consumer goods (“DCG”), such as appliances. Because consumers may need components and parts for the maintenance and repair of DCG. Therefore, the manufacturer shall pay attention to two issues, 1) how long should components and parts be supplied after the product is discontinued? and 2) does the notification of product discontinuance shall be disclosed? How long should components and parts be supplied after the product is discontinued? It shall be determined based on the category of the…

According to the “Administrative Provisions on Employment of Foreigners in China” (hereinafter referred to as the “Provisions”), an employer hiring a foreigner shall apply an employment permit for the said foreigner. Many provinces and cities require the employer to provide a labor contract with the foreign as stipulated in Article 17 of the “Provisions” for applying the employment permit. However, considering that many foreigners are temporarily dispatched to work in subsidiaries in China and maintain the employment with the parent companies, some provinces and cities accept an assignment letter or a dispatch letter instead of a labor contract where the…