Employment protection during and after China's statutory medical period

Audit protection while the employee remains inside the medical period

Start with a verified medical-period ledger, not the planned end date in an HR reminder. Confirm total actual working years, current-employer service, first sick-rest day, accumulation window, included holidays, return intervals and any unresolved extension issue. Then identify the proposed statutory ground. Article 42 says the employer may not terminate under Article 40 or Article 41 while the employee is within the prescribed medical period. Record that limited legal effect precisely.

Do not state that the employer can never terminate for any reason. Other statutory grounds can raise different questions, but an employer should not manufacture misconduct, apply an unpublished rule or treat medically supported absence as unauthorised without a sound factual and legal basis. Review Article 43 if a trade union exists. Preserve warnings, communications, policy versions and employee responses. A high-consequence decision should receive qualified legal review before notice is issued.

Handle fixed-term contract expiry under Article 45

Record the contractual expiry date and whether the employee is within the medical period on that date. Article 45 generally extends the fixed-term contract until the protected circumstance ends. The extension is a statutory continuation of the existing contract, not a new promise of indefinite employment and not permission to stop payroll or benefits prematurely. Give the employee a written explanation of the recorded extension and preserve the medical-period calculation supporting it.

When the protected circumstance ends, determine the next lawful step rather than backdating termination to the original expiry date. The employer may face a contract-expiry route, an Article 40 route or another lawful outcome depending on the facts. Reconcile service for economic compensation, including the extension period where applicable. Separately screen the limited Labor Ministry Issue [1996] No. 354 and [1997] No. 18 route: where a fixed-term contract ends after the medical period or medical conclusion and a formal labor-capacity assessment is grade 5 through 10, the texts describe medical subsidy of at least six months' wages, with possible increase language for severe or terminal illness. The Ministry says No. 354 has not been repealed but later Labor Contract Law rules control any inconsistency. Do not treat the subsidy as automatic; verify the assessment, termination route, current local rules, wage basis and qualified legal interpretation.

Test original work and genuine alternative work after the period

Article 40 requires evidence that the employee cannot perform the original work and cannot perform the other work arranged by the employer. Build a current job description and compare it with reliable functional evidence. Avoid relying only on the diagnosis, an expired certificate or assumptions about disability. Then identify real alternative work, including duties, location, hours, qualifications, training, pay and relevant restrictions. Give the employee enough information and time to respond.

A generic instruction to “report for any work,” a role that does not exist, an unsafe assignment or a punitive demotion may not establish a reliable alternative-work record. Likewise, refusal should be recorded accurately with the employee's reason. If the employee requests adjustment or produces new medical evidence, assess it before deciding. Articles 6 and 7 of the 1994 medical-period provisions direct a formal labor-capacity assessment for specified non-work disability or difficult-disease cases at medical conclusion or period expiry. That route is not routine for every illness or every Article 40 review, is different from job-specific return evidence, and must also be distinguished from the 2025 disability-allowance assessment. The provisions' older grade 1-to-4 retirement or withdrawal wording should not be copied as a current outcome without reconciling the disability-allowance reform and local implementation.

Calculate notice, one-month wage and economic compensation

If the Article 40 conditions are met, record whether the employer will give 30 days' prior written notice or pay one additional month's wage. Under the implementation regulation, the additional month generally uses the employee's previous month's wage standard. State the notice issue date, delivery method, effective date and wage basis. Do not call ordinary final-month salary the additional payment, and do not use payment instead of notice to cure a missing substantive condition.

Calculate economic compensation separately under Articles 46 and 47. The national baseline is one month's wage for each full year of service, one month for six months to under one year and half a month for under six months, with the statutory high-earner cap where applicable. The implementation regulation uses the average monthly wage for the twelve months before termination, or the actual service months if fewer than twelve, subject to the applicable minimum. Preserve the service and wage worksheet, final pay, benefit and document handover.

Keep clinical safety outside the termination timetable

If an employee's condition becomes urgent during a meeting or notice process, call 120 or obtain emergency treatment first. A planned decision date should not delay care. The treating institution can issue a medical certificate or diagnosis certificate after an actual examination, but the clinician should not be asked to decide whether the employer may terminate. Record the interruption, subsequent evidence and any necessary meeting reschedule honestly.

Clinical care, the employee's sick-leave request, employer approval, sick-leave pay, the statutory medical period, return-to-work fitness and an employment decision are separate stages. A new medical document may require the employer to update facts, but it does not automatically prove an indefinite right or a lawful termination. This source-linked guide provides administrative information, not clinical advice and not legal advice for an individual case.

Use an Articles 40 to 45 decision map before drafting notice

Identify the exact proposed route. Article 40 covers specified no-fault termination grounds and includes the post-medical-period original-work and other-work test. Article 41 concerns economic redundancy. Article 42 protects employees in listed circumstances against termination under Articles 40 and 41, including prescribed medical-period protection. Article 43 can require prior trade-union notice. Article 45 can extend fixed-term expiry while the protected circumstance continues.

Write one page stating the asserted article, every substantive condition, evidence owner, unresolved fact and required procedure. Do not blend a redundancy reason, alleged misconduct and post-medical-period incapacity into a vague “business decision.” Different grounds carry different facts and defenses. If the employer changes route, document why and restart the relevant audit instead of repurposing evidence gathered for another ground. Qualified legal review is appropriate before a high-consequence notice.

Verify the protection clock and its underlying absence evidence

Recalculate the medical period from total actual working years, service with the current employing unit, the three-to-twenty-four-month matrix and the paired six-to-thirty-month accumulation window. Inspect every supported sick-rest interval, included rest day and statutory holiday, actual return, overlap and unresolved special-disease extension issue. Give the employee an opportunity to identify missing service or dates. An HR calendar reminder is not evidence of exhaustion.

Reconcile provider documents, employee requests, employer leave decisions and attendance without treating them as identical. A payroll statement can help prove dates but does not automatically establish the legal protection ledger. If a document is questioned, use a proportionate authenticity process and do not demand unrelated medical history. Medical and health information is sensitive personal information; the decision team should receive only what is needed for the stated legal and operational question.

Do not manufacture misconduct or use redundancy as a shortcut

Medical-period protection is not absolute, so other statutory grounds can require separate analysis. That does not permit an employer to relabel supported illness absence as absenteeism, invent a certificate defect or apply a rule that was never lawfully formulated and communicated. Audit the exact conduct, policy clause, consultation and publication history, employee knowledge, proportionality and response. Preserve favourable as well as adverse evidence.

An Article 41 economic-redundancy process also has its own thresholds, grounds, consultation, reporting and selection issues. Article 42 bars Article 41 termination of an employee within the protected medical period, so a general restructuring label does not bypass that protection. Do not move the employee onto a list simply because sick leave makes performance data incomplete. Use current qualified advice on the actual restructuring process.

Complete trade-union, delivery and decision governance

Where the employer has a trade union, review Article 43 before unilateral termination and preserve the notice, union opinion and employer response. Confirm who holds delegated authority to approve the decision and whether internal legal, compliance or employee-relations review is required. A manager's email should not substitute for a properly authorised notice. Keep drafts marked as drafts so they are not mistaken for an issued decision.

Plan lawful delivery with the employee's current address and available channels, including reasonable language support for a foreign employee. Record issue date, receipt or attempted service, effective date and attachments. Do not backdate notice or ask the employee to sign an inaccurate acknowledgement. If thirty days' notice is chosen, identify the working and leave status during that period; if the additional-month route is chosen, state the separate wage basis.

Price every termination payment as a distinct line

Prepare separate entries for wages through the final date, accrued entitlements, unresolved sick-leave wage, the one additional month's wage if used instead of notice, economic compensation, reimbursable expenses, social-insurance handling and any agreed settlement amount. Cite the service period and wage reference for each. The prior month's wage standard used for the additional month is not automatically the same as the twelve-month average used for economic compensation.

Explain rounding, the high-earner cap where applicable, deductions and payment date. Reconcile a fixed-term extension under Article 45 before calculating service. Do not describe an unexplained lump sum as full compliance, and do not treat payment as curing absence of the original-work and alternative-work conditions. Give the employee a worksheet and time to seek advice before signing a release or settlement.

Add a separate conditional medical-subsidy line where a fixed-term expiry follows medical-period expiry or medical conclusion and a qualifying grade 5-to-10 labor-capacity assessment exists. Record the source, assessment body and date, grade, wage basis, six-month minimum calculation, any severe- or terminal-illness increase considered and the current local-law check. Do not merge this possible subsidy with sick pay, notice pay, economic compensation, disability allowance or a Shanghai-specific dismissal subsidy, and do not include it without verifying that the narrow route applies.

Separate foreign-status, work-injury and disability routes

For a foreign employee, identify the China employer, work permit, residence permit, passport and social-insurance record. Termination or contract expiry may trigger separate work-authorisation and residence actions, but the employment notice does not itself cancel or extend the documents. Record responsible parties and deadlines and give the employee usable documents. Do not withhold medical or separation records to pressure immigration departure.

If the condition may be work-related, preserve work-injury recognition, suspension-of-work-with-pay and labor-capacity assessment instead of forcing the case into ordinary medical-period termination. The national disability-allowance assessment for complete loss of work capacity is another purpose and is not a routine job-fitness certificate or automatic Article 40 prerequisite. Ask the responsible authority which route applies and obtain qualified advice where the classification changes rights.

Prepare a dispute file that can be reviewed without reconstruction

Index the contract, rule versions, consultation and publication evidence, service documents, medical-period calculation, provider evidence, leave approvals, payroll statements, job description, functional restrictions, alternative-work proposals, meeting notes, union material, notice, compensation worksheet and delivery receipts. Preserve metadata and originals. A clean chronology should show what the employer knew at each decision point rather than relying on a later narrative.

If the employee challenges the decision, use internal correction where genuine error exists and preserve the change. Labor arbitration or court proceedings have procedural and time-limit questions beyond this guide. Avoid asking a clinician to write legal conclusions or altering the absence ledger after notice. A settlement should identify the claims and amounts it addresses and should be reviewed with independent qualified legal advice where consequences are material.