Work in China(3): Can I Accept Another Offer after Verbally Agreeing to Renew Current Contract？
When one’s labor contract is about to expire, after verbally agreeing to the employer that the contract will be renewed, it is possible for him/her to be attracted by offers from other companies. In this case, will the verbal commitment limit your choice? If you choose to accept the new offer, will there be any illegal consequences?
For the above questions, our answer is: No.
According to Article 7 of the PRC Labor Contract Law (中华人民共和国劳动合同法), and refer to Case No.(2014) 三中民终字第01117号 of Beijing Third Intermediate People's Court, the labor relationship between an employer and an employee is established from the day when the employee starts working for the employer. According to Article 10 of the PRC Labor Contract Law, after an employer and an employee establish a labor relationship, they shall sign a labor contract in writing.
According to Articles 5 and 6 of the Implementation Regulations of the Labor Contract Law (劳动合同法实施条例), within one year from the date when the employer and the employee establish a labor relationship, if the employee decides not to sign a written labor contract with the employer after the employer’s written notification, the employer shall notify the employee in writing to terminate the labor relationship, the employee shall be paid for his actual working hours, and the employee does not need to pay any compensation to the employer.
According to the above-mentioned laws, when your original labor contract expires, the original labor relationship you established with the employer is terminated. Although you have verbally agreed to renew the contract, as long as you have not worked for the employer after the expiration of the original labor contract, you have not established a new labor relationship with the employer, and you undoubtedly have the right to refuse to sign the written labor contract and accept the offer from another company without paying any compensation.
In addition, even after you start working for the employer after the original contract expires, which means establishing a new labor relationship with the original employer, you can still choose to terminate the labor relationship and work for another company before signing a new written labor contract with the original employer.
In summary, as long as you have not signed a new written labor contract with the original employer, verbally agreeing to renew the contract will not prevent you from accepting another company’s offer.
Larry Zhou, Partner
Landing Law Offices China
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