On August 26, 2021 China’s Supreme People’s Court (SPC), together with the Ministry of Human Resources and Social Security (HR Ministry), issued guidelines (the Guidelines) on typical cases to clarify legal standards related to working hours and overtime.
The Guidelines aim to put an end to the 9-9-6 system which has become common practice especially with technology companies and which has employees working from 9am to 9pm, 6 days a week.
The “Labor Law of the People’s Republic of China” clearly stipulates that employees are supposed to work no more than 8 hours per working day. Article 41 of the Labor Law does however allow for working hours to be extended but under strict conditions and only when certain specific circumstances are met.
“Employers may extend their working hours after consultation with the labor union and workers due to production and business operation needs. But the extended working hours shall generally not exceed one hour per day. If such extension is needed due to special reasons, under the condition of ensuring the health of the workers, the extended working hours shall not exceed three hours per day but shall not exceed thirty-six hours per month.”
Furthermore, Article 43 explicitly stipulates that “Employers shall not extend working hours of employees in violation of the provisions of this law.”
And finally Article 26 of the “Labor Contract Law of the People’s Republic of China” provides that where labor contracts violate the mandatory provisions of the law or administrative regulations, such contracts shall be invalid or partially invalid. If a dispute arises over the invalidity or partial invalidity of a labor contract, the matter shall be determined by a labor arbitration commission or a People’s Court.
Which such a clear legal framework one may wonder why SPC guidelines are required to root out the 9-9-6 practice.
A catalogue of cases
The SPC will regularly issue such guidelines which work as a catalogue of “typical cases” ruled by various courts across the country and which are all dealing with the same legal question.
The purpose of the SPC is to provide courts and tribunals across the country with a clear indication of what the China’s Supreme Court sees as the proper application of the law in regard to a specific matter. The SPC will resort to Guidelines especially in matters which are unlikely to be brought to its docket by the parties, for instance because the issue at stake is not sufficiently important or generally of too little value to justify for either party to push the judicial procedure all the way to the SPC. The matters considered by the Guidelines are often issues of societal importance which somehow have caught the public’s attention recently.
This is exactly what happened with regard to the 9-9-6 issue. In recent months many conversations on social networks and other media have dealt with cases of workers being exhausted from work and some unfortunately falling seriously ill from having to work overtime constantly. We can only assume that the SPC and the HR Ministry have been made aware of these discussions and found it necessary to issue the Guidelines as a means to indicate that the 9-9-6 practice was in fact not a legal practice which could be sustained in law.
Some typical 9-9-6 cases
Case 1: One case in particular involved an employee of a courier company whose contract was terminated because he refused to abide by the 9-9-6 working schedule imposed by the company. The tribunal held that the 9-9-6 working schedule seriously violated laws and regulations and that the company shall compensate the employee for the wrongful termination of his employment contract.
Case 2: The employee handbook of an internet company provided that only working hours after 9 p.m were eligible for overtime payment. Based on this provision the company refused to pay overtime wage to its employee who worked overtime between 6-9 p.m. Both tribunal and court held that such provision is illegal and decided that the company shall pay for the employee’s overtime work.
Case 3: A technology company asked its employees to sign a document indicating that they voluntarily waive any overtime payment. Based on such document the company then refused to pay any overtime wage when the employee asked for it. The company in this case took advantage of its dominant position to force the employees to sign such agreement, which violates both legal provisions and the principle of fairness, and also infringes on the employees’ rights and interests in wage and compensation. Hence, the tribunal ruled that the company shall pay the overtime payment to the employee.
With the publication of the Guidelines the SPC is sending a very clear signal indicating that the 9-9-6 practice cannot be tolerated under any circumstances and that it shall be rooted out. All the courts and tribunals of the country now have a catalogue of cases which they can refer to in order to justify their decision to deny the application of a 9-9-6 policy. The catalogue deals with most of the situations they may have to decide about and brings a response to the arguments which employers may bring forward to justify their 9-9-6 practices.
Employers who apply illicit overtime systems and who try to find loopholes in order to legitimize unlawful overtime practices should be aware that they will have to face the consequences. With this in mind, it may be the right time to check whether the overtime policy in your company is compliant with the applicable legal provisions.
If you have any questions about working hours or labor disputes, please feel free to contact us.