72 Measures of Shenzhen Special Economic Zone on Reduction of Enterprises’ Staff Due to Economic Reasons[深圳经济特区企业经济性裁减员工办法（1996）]

Archived（May 28, 2018）

（Adopted at the 42nd Meeting of the Second Permanent Meeting of the Shenzhen Municipal People’s Government on September 19, 1996）

Article 1 In order to standardize the enterprise’s activity of reducing the staff due to economic reasons, protect the legal rights and interests of the staff in enterprises and maintain the order of labor market of the Shenzhen Special Economic Zone, these rules are formulated.

Article 2 An enterprise may reduce the staff, when it is under any one of the following circumstances and reduction of the enterprises’ staff is necessary: :

(1) Being on the edge of bankruptcy and in the period of legal rectification;

(2) Having been losing for two consecutive years, in the state of insolvency and difficulty in continuing operation;

(3) Being in consecutive state of shutdown, unable to pay wage to employees for more than two months and difficulty in continuing operation;

(4) Other circumstances recognized by the government, such as optimizing the structure of industry, important technical reformation etc.

Article 3 In case the staff are all qualified in the same post, an enterprise shall reduce the staff in the following order:

(1) Employees without registered permanent residence in Shenzhen;

(2) Employees with registered permanent residence in Shenzhen.

An enterprise shall not lay off the employees with registered permanent residence in Shenzhen, if his or her spouse has been laid off by the enterprise, or has been listed in the roll to be laid off.

Article 4 The procedure of cutting down the number of workforce shall be the following: Enterprises shall reduce the staff according to the following procedures:

(1) Explaining the situation to the trade union and representatives of the staff 30 days in advance, and providing materials involving production and operation status;

(2) Putting forward reduction plan involving the following: the list of employees to be laid off, date and implementing steps of the reduction, economic compensation measures for the employees to be laid off, which shall be in accordance with the provisions of laws, regulations and agreed terms of collective contracts;

(3) Soliciting opinions from the trade union and representatives of the staff about the reduction plan, amending and perfecting the plan according to their reasonable opinions;

(4) Reporting the reduction plan to the Administrative Department of Labor, when the plan approved, going through the procedures of terminating the contracts with the employees laid off, paying sum of indemnity according to relevant provisions, and providing reduction certifications to the employees laid off.

The “trade union” , mentioned in the preceding paragraph, refers to an enterprise labor union; In case there is no labor union in an enterprise or no union in a trade, it shall separately refer to the industrial labor union and the Shenzhen Municipal Federation of Trade Union.

Article 5 If an enterprise need to reduce the staff because of optimizing the structure of the industry or significant technical reformation, they shall conduct necessary training to the employees to be laid off, after being approved by the Administrative Department of Labor. If the employee is still unqualified for his post, the enterprise may lay them off according to article 4 of these measures.

Article 6 In case that an enterprise reduces the staff in violation of laws, rules, regulations and terms of collective contracts, the trade union has authority to order the enterprise to make correction.

Article 7 If a reduced employee with registered permanent residence in Shenzhen is job-losing, he may go through the procedures of unemployment registration in the organization of unemployment insurance, and apply for unemployment pension pursuant to relevant provisions.

Article 8 An enterprise, which has reduced staff according to item 1 to item 3 of Article 2, shall not recruit employees within one year from the reduction. If an enterprise is available to and in need of recruiting employees, it shall give priority to the laid-off persons with registered permanent residence in Shenzhen on the premise that they are qualified for the posts.

Article 9 If an enterprise reduces the staff in violation of these measures, the Administrative Department of Labor shall order it to reinstate the reduced employees in their posts and give the wage and social insurance pension payable of the period from reduction to reinstatement.

Article 10 In case that an enterprise violates Article8 in these measures, The Administrative Department of Labor shall warn and order it to make correction in a limited time.

Article 11 If an enterprise violates these measures, the Administrative Department of Labor shall not allocate the quartos of blue-stamped residence registration and of recruiting or transferring employees outside of the city to the enterprise; if the quartos mentioned above have been allocated but the relevant procedures have not been gone through, they shall become valid.

Article 12 These measures may apply to public institutions which are managed as enterprises.

Article 13 If there is labor dispute arising from reduction of the staff, the two parties shall deal with it in accordance with relevant provisions.

Article 14 These measures shall go into effect as of the day of promulgation.