Asked by: Manufacturing HR
Employees are now requesting the renewal of the collective contract. Regarding the renewal of the collective contract, must the employer negotiate with the employee representative 3 months in advance? If the company chooses not to renew, what is the legal risk?
Answered by: RDL·Shanghai Attorney Zhang
Take Jiangsu province for example. According to Article 29 of the "Regulations on Collective Contracts of Jiangsu Province", within three months prior to the expiry of the collective contract, both parties should negotiate and renew the collective contract. It can be inferred that the three-month period is a reference period determined by considering factors such as negotiation process and communication costs. So, it is not mandatory.
According to Article 26 of the "Regulations on Collective Contracts of Jiangsu Province", within the validity period of the collective contract, the employer and the worker can negotiate and change or cancel the collective contract. The party proposed shall explain the reasons in writing and provide the relevant basis.
As far as the legal regulations are concerned, no punitive provisions have been introduced on "does not renew collective contracts." However, according to local practice, if no agreement can be reached on the renewal of the collective contract, a written explanation and relevant basis must be provided to explain specifically why the parties have not reached an agreement for renewing the negotiation and reported it to the high-level labor union or to the local labor security administrative department for coordination. It should be noted that even if neither party raises an objection to this situation, the labor and security administrative department in the district is obliged to do the necessary examination and supervision. By then, the employer must still explain the situation of the parties' negotiation.
In this regard, the lawyer suggested that about the renewal consultation process, regardless of the success or failure, be sure to record and retain the relevant evidence of the consultation.