Should Employer Give Notice to Trade Union before Terminate Employment in China?

trade union

 (By Albert Chen) The dispute over employment termination is quite common in labor conflicts, and whether the employer shall send a notice to the trade union before the termination is commonly seen in such disputes. What then, are the regulations regarding this aspect in China?

I. What is the function of trade union in China?

The role of the trade union is specified in Article 2 of Trade Union Law of PRC (the “Trade Union Law”):

“Trade unions are mass organizations formed by the working classes of their own free will.

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What Legal Risk May Come to Companies Enrolled in the Non Bank Loan in China?

(By Albert Chen) The capital shortage is inevitable during the company operation, and many operators could be head aching with the financing. Due to the strict demands and procedures for the credit approval in the banks, the company may suffer from the refusal of loan application or delay in lending. At that time, the non-bank loan could play another main role in the company financing. Then what risks may come to foreign invested companies as they enrolled in the non-bank loan when running business in China? Please check today’s post for the answer.

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How to Acquire the Trademarks of Companies Whose Business Have Been Canceled or Whose Licenses Have Been Revoked in China?

By Albert Chen

Trademark assignees may sometimes encounter an awkward situation: the target trademark is in the hands of a company that has had its business license revoked or that has been cancelled. Although the trademark is still valid, others seem to have no legitimate means to acquire it. So, under these circumstances, does the assignee really have no means to acquire the trademark? In today’s post, you will find the answer.

I. Why would trademarks be left unused?

According to relevant statistics, the average life of Chinese companies is seven years, and the average of life of privately owned companies is only 2.9 years. On the other hand, however, the validity period of a trademark is ten years, and there is nothing in Chinese law that states that the trademark shall automatically become invalid when the business license of its holder is revoked or the company is cancelled. Especially when the business license has been revoked, the company still has legal capacity. It is merely incapable of conducting civil acts, including the use and transfer of trademarks, because its business license or chop has been announced invalid or has been confiscated under the punishment of business license revocation.

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How to Respond Employees’ Compensation Claim for Office Relocation in China?

By You Yunting

A subscriber of our website asked that what the company shall reply when the employee hand in his/her resignation for the inconvenience occurred from relocation of the office and as for the employee’s claim of compensation.

We reply as follows: Obviously, it could come to the employee’s consideration that the relocation of the office is the statutory situation of “A major change in the objective circumstances relied upon at the time of conclusion of the employment contract renders it unperformable”, and it is also resulted by the employer, and for this reason, they would claim an extra one month salary and compensation.

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Analysis on Common Legal Risk of Chinese Company’s Ads

By You Yunting

The competition in Chinese market is so fierce that the company would strive to make their ads be more outstanding, yet that could also bring them the risks of administrative punishment. In today’s essay, you will see our analysis on the common risk for corporate propaganda.

I. No fulfilling to the promise in propaganda

The most typical case shall be the ads from Beijing Hyundai (note: the link is in Chinese), the joint venture of Hyundai in China. As claimed in the its ads, the chief of the company promised not to reduce the sales price of its vehicle in the coming 2 years, which soon be overthrown by its price adjustment within 120 days after that with the pressure from market competition. On that, we saw the consumer filing a group lawsuit against its break-in of promise. Despite as investigated by the company that, the words of the chief is not quit the same as claimed in the media report, and Hyundai was therefore judged of no liability, the Korean brand faced a devaluing of social reputation in China. In our opinions, the losses of intangible asset of the car maker are much more than the claimed compensation. And that shall mainly lie with the over promise by the company.

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What Financial Support and Tax Preferential Policies can be enjoyed for Patent Application?

Nowadays, the State and local governments have issued serious financial support and tax preferential policies to encourage innovation of patents.

I. Financial Support Policies

Firstly, from the perspective of the State, the Chinese applicants applying to the State Intellectual Property Office (SIPO) for patents can enjoy the policy of reduction or postponement of the payment of the patent fee. The relevant expenses include the application fee (excluding printing expense and surcharge), substantive examination fee of the invention and 3 years’ annual fees from the year when the patent right is granted. On the other hand, for the Chinese applicants applying for patents overseas, they can obtain the financial support to the extent of certain amount, which includes the official fee of application for foreign patent, retrieval expense paid to patent retrieval organization, service expenses paid to the agency and so forth.

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Guiding Case by China Supreme Court: JV’s Minority Shareholders May Undertake All Company’s Debt

By You Yunting

By judicial practices in China, in case the Sino-foreign invested company, which however is operated under the management of Chinese shareholder, is trapped in the insolvency, the foreign investors could be judged to take all the debt of the company, not subject to the total amount of its investment, when Chinese partner chooses to disappear or refuse to clear the debt. And in recent, as per the latest 3rd guiding cases by China Supreme People’s Court, by a decision indicated in it, the non controlling shareholder shall be liable to the joint liability to the non-settled debt of the company, that obviously aggravates the burden of the company shareholder. Then, what is the fair way to avoid such risks? We put forward our answer to it in today’s post.

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The Validity of Foreign Investor’s Share Holding In the Name of Chinese Dormant Citizens

By Luo Yanjie

As reported, 24quan.com, a Chinese daily-deal website, is undergoing a contentious conflict (note: the link is in Chinese) between its operation team and investors. Berjaya Corporation Bhd (Berjaya), the biggest investor of the website and registered in Malaysia, accused the operation team of withholding  RMB 2 million yuan with no authorization, yet the team responded by saying that the investor was unilaterally deducing the share held by the team from 40% to 3%. Currently, the website and the company is under the control of the team, who has dismissed the staffs appointed by the investor, and in retaliation, the investor announce that their funding cease.

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Infringement on Privacy? Comment on Enterprise’s Monitoring of Employee’s Chat

Recently, Techweb, a technology website in China interviewed our lawyer for the company’s monitoring on employee’s chat, and the following is the digest of the interview:

Q: For the monitoring on phone call and online chat of the employees by the company, could you share us you opinion on it from the professional view?

A: For the monitoring on employee’s phone call and chat in working time, there’s no corresponding regulation in law, and we usually reply to our clients for such questions like this:

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Tax Preferential Policy in China’s Animation Industry

It is reported by SECURITIES DAILY (note: the link is in Chinese) that there will be adjustment on tax policy in China animation industry. In recent, China Ministry of Finance and the State Administration of Taxation jointly issued a new policy supporting the animation industry, which introduces the VAT and the preferential business tax. And less tax and taxation of the both VAT and business tax will be made hereby.

I. For the sales of the independently developed animation software by the company of the general tax payer itself, the VAT shall be levied at the rate of 17% first, and the exceeding 3% amount of the actual tax bearing will be refunded. That’s the so called levy-refund policy.

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MCC Released the New Foreign Investment Industry Guide Catalog of 2012 Version


The Ministry of Commerce of China (the “MCC”) has recently revised the Foreign Investment Industry Guidance Catalog (the “Catalog”) recently, which will come into effect on 30th, January, 2012.

The Catalog is the important industry policy on guiding the foreign investment, and before this modification, it has been modified forth in 1997, 2001, 2002, 2004 and 2007 since the promulgation in 1995. And this post is the conclusion on the newly revised Catalog by Bridge IP Law Commentary.

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The Officer of U.S. Consulate Visited Bridge IP Law Commentary

On 20th December, Mr. Steven Duke (杜史文), Vice Consul of U.S.A, visited DeBund Law Offices/Bridge IP Law Commentary for the survey on the IPR protection in China.

On the meeting with the Consul, Mr. You Yunting introduced the IPR protection in China and replied the questions interested by the visitor, which mainly include the national treatment of foreign companies in IPR dispute settlement, the destroy of knockoff model through judicial way, the copyright of video-sharing programs, the transaction and transfer of patent, the protection of trade secret and the development of IPR judge and lawyers in China.

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