Case: MissA has worked for the company for over a year and has signed anemployment contract with the company, but the contract duration is one year and the company has not renewed her employment contractafter its expiry.

Q:Is the company liable for double pay compensation?

Yes,if the employment contract is not renewed afterits expiry but the employment continues, two times the salary shall stillbe paid after more than one month until the employment contract isrenewed.

Riskprevention for enterprises: renew the employment contract with theworker in time after it expires,or if it is not renewed in time, you can avoid the legal risk by signing the contract ina backdating way afterwards.

1. Renewal of an employment contract

Renewalof the employment contract is the continuation of the employmentcontract by consensus between the employer and the worker after theexpiry of the employment contract, to form acontinuous employment relationship.

Ifan employer enters into a fixed-term employment contract with aworker for the firsttime, the employer may, upon the expiry of the employment contract, still enter into a fixed-term employment contract at the time of thesecond employment contract. However,at the time of signing the employment contract for the third time,the employer may not renew the fixed-term employment contract, exceptwhen the worker proposes to renew the fixed-term employment contract.

Thenumber of consecutive fixed-term employment contracts shall becounted from the time the fixed-term employment contract is renewedafter the implementation of the Labor Contract Law.

2. Legalconsequences of non-renewal of employment contracts

Afterthe expiry of an employment contract, unless the employee refuses to renew thecontract even though the conditions offered by the employer are thesame as or better than those stipulated in the current contract, theemployer shall pay the worker economic compensation according to thenumber of years the worker has worked in the employer and at the rate of one month’ssalary for every full year the worker has worked in the employer. Ifthe period is more than 6 months or less than 1 year, the economiccompensation paidto the worker shallbe calculated on the basis of 1 year; if it is less than 6 months,the worker shall be paid economic compensation of half a month’ssalary.

Ifthe employment contract is not renewed uponits expirybut the employment continues, two times the wages shall still be paidafter more than one month until the employment contract is renewed.

Article written by:Zhang Xintian and ZhouHaibo