In China’s job market, many employers seek to attract and retain talent by assisting recruits to obtain local “hukou”, the official household registration that formally identifies an individual as a resident of the area. As hukou is closely tied to a person’s education, job and housing prospects, its derived benefits are especially enticing in cities like Beijing.
To retain talent and dissuade new recruits from leaving as soon as hukou is obtained, employers often insist on a hukou-related employment service period, with a default penalty for breaching it.
This article takes Beijing as a prime example and analyses how courts approach disputes arising from employees breaching the service period agreement after receiving their assisted hukou.
Service period refers to a timeframe of continual labour relationship agreed between the employer and employee with special binding effects on the employee as a result of special benefits. Article 22 of the Labour Contract Law states: “Where an employer pays special training expenses for the special technical training of his employees, the employer may enter an agreement with his employees to specify their service time period.”
Does this provision technically rule out service periods established over special treatment other than technical training, such as hukou? Courts in Beijing do not necessarily think so. Considering the provision an authorising norm, they believe it entitles employers to decide whether to set a...
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