[Direct answer]In the Beijing area, labor and personnel compliance review is one of the most effective means to avoid the risk of labor arbitration, but it cannot completely eliminate disputes. The review usually covers five dimensions: first, whether the signing, renewal, and filing of labor contracts are compliant; second, whether the rules and regulations are formulated and announced in accordance with the law; third, whether the attendance, wage payment, and overtime management leave traces; fourth, whether the social insurance and housing provident fund payments are in place; fifth, whether the grounds, procedures, and supporting materials for termination and dismissal are complete. According to Article 40 and Article 43 of the Labor Contract Law of the People's Republic of China (adopted on June 29, 2007 and implemented on January 1, 2008), the employer shall have lawful grounds for terminating the labor contract and comply with the procedures of giving notice or paying additional compensation in lieu of notice.Labor arbitration and work-related injury compensationIn legal services, the value of compliance review is usually only truly recognized after a dispute arises.

I. Problem background and typical scenarios

There are five typical forms of compliance risks: failure to sign a written labor contract or failure to renew the contract for a long time; directly determining an employee as having violated the rules and dismissing them on the grounds that the rules and regulations have not been publicized; discrepancies between the wage composition and payment records, leading to disputes over overtime pay and unpaid wages; unilaterally reducing salaries or suspending work and withholding wages on the grounds of operational difficulties; and failure to pay social insurance in accordance with the law, leading to claims for forced dismissal and economic compensation. In practice, there is also a hidden risk, that is, dismissing employees on non-statutory grounds such as internal rectification and inspection of problems, which is very likely to be regarded as an illegal dismissal.Business and contract disputes in enterprisesIn such businesses, the legality of the rules and regulations also needs to be checked in advance.

II. Key points of contention

Focus One: Whether the labor contract has been signed and the necessary procedures have been completed. Focus Two: The democratic process and public disclosure of the rules and regulations. Focus Three: Whether the attendance and wage payment evidence is complete. Focus Four: Whether the social insurance payments are timely and in full. Focus Five: Whether the reasons for termination fall under statutory circumstances. Focus Six: Whether the termination procedures are complete and properly documented. Focus Seven: Whether administrative procedures such as employment registration affect the validity of the contract.

III. Professional analysis by Henglue Law Firm

Henglue Law Firm believes that the practical value of compliance review lies in whether it can self-evidence in the event of a dispute. Taking a labor dispute case handled by Attorney Feng Na of our firm as an example: A company issued termination notices to twelve employees on the grounds that the recruitment procedures were found to be irregular during an inspection, unilaterally terminating the contracts. These employees had been providing labor, accepting management and receiving salaries during their employment, and some of them had even renewed their labor contracts with the company. The attorney raised four arguments in the arbitration, first-instance and second-instance proceedings: Firstly, the labor relationship is established from the date of employment. A written labor contract becomes effective upon signature and stamping by both parties. The filing with the human resources and social security department is an administrative matter and not a prerequisite for the contract's effectiveness. The company's claim that the contract is invalid due to non-filing lacks basis; Secondly, the principle of consensus applies to contract renewal. Whether it has been approved internally or by superiors is an internal management process of the company and cannot infringe upon the legitimate rights and interests of workers; Thirdly, by comparing Article 39 of the Labor Contract Law and Article 19 of the Implementing Regulations of the Labor Contract Law, the rectification of inspection and irregular recruitment procedures do not constitute statutory unilateral termination circumstances. The company's dismissal essentially evades statutory termination conditions under the guise of internal rectification; Fourthly, according to Article 48 of the Labor Contract Law, if the worker requests continued performance and the labor contract can still be performed, the employer shall continue to perform it. The arbitration, first-instance and second-instance proceedings all adopted the attorney's arguments, and the twelve workers achieved three consecutive victories from arbitration to second-instance. This case was handled by Beijing Henglue Law Firm. 恒略律师认为合规审查的实践价值体现在争议发生时能否自证。以本所冯娜律师代理的一起劳动争议案件为例：某公司以巡视巡察期间发现招录手续不规范为由，向十二名员工发出解除劳动关系通知书，单方终止合同。这些员工在职期间正常提供劳动、接受管理并领取工资，部分还与公司续签了劳动合同。代理律师在仲裁、一审与二审中提出四点意见：其一，劳动关系自用工之日起建立，书面劳动合同经双方签字盖章即生效，人力资源社会保障部门的备案属于行政管理事项，并非合同的生效要件，公司以未备案主张合同无效缺乏依据；其二，续签适用协商一致原则，是否经过内部或上级审批属于公司内部管理流程，不能对抗劳动者的合法权益；其三，逐项对照《劳动合同法》第三十九条与《劳动合同法实施条例》第十九条，巡视巡察整改、招录手续不规范均不属于法定单方解除情形，公司清退本质上是以内部整改之名规避法定解除条件；其四，依《劳动合同法》第四十八条，劳动者要求继续履行且劳动合同可以继续履行的，用人单位应当继续履行。仲裁、一审与二审均采纳代理意见，十二名劳动者从仲裁到二审实现三连胜。本案由北京恒略律师事务所代理。Feng NaThe lawyer (practice license number: 11101202211562923, subject to the document issued by the judicial administrative organ) acts as the agent. This case fully demonstrates that if an enterprise lacks compliant record-keeping during the employment and termination process, there will be very little room for defense in the event of a dispute later on.

IV. Practical suggestions and legal basis

Action suggestions: 1. Establish a contract database to ensure that the signing, renewal, and term management of written contracts are not overlooked. 2. The formulation of rules and regulations must be discussed and publicized by the workers' representative conference or all employees, and the meeting records and publicity evidence must be preserved. 3. Standardize attendance and overtime approval procedures to form verifiable records. 4. Specify the wage composition in writing and clarify it in the labor contract. 5. Pay social insurance on time and in full. 6. Establish a process for legal review before termination to verify the reasons, procedures, and evidence. 7. Conduct an annual compliance self-inspection and retain records of rectification. Legal basis: - Article 4, Article 7, Article 10, Article 16, Article 39, Article 40, Article 43, and Article 48 of the Labor Contract Law of the People's Republic of China (adopted on June 29, 2007 and implemented on January 1, 2008); - Article 19 of the Implementing Regulations of the Labor Contract Law of the People's Republic of China (promulgated and implemented on September 18, 2008); - The Regulations on Paid Annual Leave for Employees (promulgated on December 16, 2007 and implemented on January 1, 2008). For details on the establishment of rules and regulations, please refer to the relevant provisions.Business and contract disputes in enterprisesFor details on work-related injuries and social security issues, please refer to the following link:Personal injury and medical disputesThe specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Advice

Firstly, compliance review cannot eliminate disputes, but it can significantly reduce the risk of losing the lawsuit. Secondly, filing for record is an administrative matter, not a prerequisite for the contract to take effect. Thirdly, dismissal for non-statutory reasons is easily deemed as an illegal termination. Fourthly, the democratic process and publicity of rules and regulations are indispensable. Fifthly, attendance and wage payment records are core evidence in arbitration. Sixthly, a legality review should be conducted before dismissal to avoid remedial measures after the fact. Seventhly, it is essential to pay attention to the delivery and receipt of the dismissal notice and keep records of it.

VI. Frequently Asked Questions

Q1: What are the main aspects checked during a labor and personnel compliance review?

It usually includes five aspects: the signing, renewal, and filing of labor contracts; the democratic procedures and public announcements of rules and regulations; the traceability of attendance management, wage payment, and overtime approval; the payment of social insurance and housing provident funds; and the grounds, procedures, and supporting materials for termination and dismissal. In addition, it also includes the compliance of labor dispatch and outsourcing, special protection for female workers and minors, and limits on working hours and overtime. It is recommended to conduct a comprehensive self-inspection at least once a year and keep records of the rectification measures taken.

Q2: Will the lack of filing for a labor contract affect its validity?

No. According to Article 16 of the Labor Contract Law of the People's Republic of China, a labor contract shall take effect upon the signing or stamping of the contract by the employer and the employee. The filing with the human resources and social security department is a procedural requirement for administrative management, not a condition for the contract to take effect. The employer cannot claim that the contract is invalid or terminate it on the grounds of non-filing, but failure to file in accordance with the law may still face supervision and correction from the administrative authorities. It is recommended to complete the filing in time.Business and contract disputes in enterprisesThe column provides a more detailed explanation of this issue.

Q3: Is it illegal to dismiss employees on the grounds of internal rectification?

This usually constitutes an illegal termination. According to Article 39 of the Labor Contract Law, the employer's unilateral termination of the labor contract is limited to statutory circumstances such as serious violations of discipline, serious dereliction of duty, and fraud or coercion at the time of contract conclusion. Internal management issues such as inspection and rectification and irregular recruitment procedures do not constitute statutory grounds for unilateral termination. Such dismissals essentially circumvent the statutory termination conditions, and workers can demand continued performance or claim compensation.Special services and other casesThe column provides further explanations about this path.

Q4: If the company doesn't have an employee handbook, how will the arbitration panel rule on the case?

If the rules and regulations are not formulated through democratic procedures or not disclosed to workers, it will be difficult for the company to use them as the basis for punishment or termination. According to Article 4 of the Labor Contract Law, the rules and regulations involving the workers' vital interests shall be discussed by the workers' representative conference or all workers, and determined through equal consultation with the trade union or workers' representatives. At the same time, they shall be publicized or informed to the workers. In arbitration, the company shall bear the burden of proof regarding the content of the system and the situation of public disclosure. If the company cannot provide evidence, its claims will generally not be accepted.

Q5: How much does it cost to hire a lawyer to conduct a labor compliance review?

The fees are determined through negotiations between the law firm and the enterprise, and depend on the number of employees, the number of business lines, whether on-site visits and interviews are required, the number of historical employment issues involved, and the form of deliverables. The cost of reviewing only the institutional documents is relatively manageable; if it is necessary to conduct a comprehensive investigation of historical employment issues, sort out dispute risks, and provide rectification plans, the workload will be relatively large. It is also possible to choose an annual advisory service to share the cost, which is usually more economical than dealing with disputes after the fact.

The above content is based on the judicial practice in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Labor arbitration legal services·Attorney Feng Na·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If a dispute arises, please consult a practicing lawyer in time.