Termination for Cause in China

For-cause is for proven serious misconduct, not for a disappointing performer.

Article 39 lists grounds such as failing recruitment conditions during probation, serious violation of labour discipline or employer rules, serious dereliction causing major harm, holding a second job that materially affects this one, an invalid contract caused by the employee, and criminal liability. ‘Serious’ is judged against a specific, lawful, publicised handbook rule and the actual harm or persistence of the conduct. A single lateness, a business disagreement, or a PIP miss is usually Art. 40, not Art. 39. Skip union notice at your peril. If the ground fails, the cheap firing becomes the expensive one.

The classification screen

4 questions before you choose the route.

This page identifies the right question and evidence. It does not determine the legal outcome on a reader’s facts.

Which Art. 39 item actually fits?

Name the item; do not cite ‘for cause’ in the air.

Item

Is the rule lawful, consulted, and publicised?

Handbook process is often the whole case.

Rule

How serious was the act, and was the employee heard?

Investigation, explanation and proportionality.

Process

Would Art. 40 or a mutual deal be safer?

Performance and illness are not Art. 39.

Route

Working rule: Article 39 lists grounds such as failing recruitment conditions during probation, serious violation of labour discipline or employer rules, serious dereliction causing major harm, holding a second job that materially affects this one, an invalid contract caused by the employee, and criminal liability.

What changes the answer

The signal ledger.

These facts move the question beyond a label and into a product, money-flow and control analysis.

Signal

Ask the operating question

Why it changes the route

Performance dressed as misconduct

Is the file a missed KPI rather than a rule breach?

Arbitrators recharacterise these as unlawful Art. 39 cases.

Vague handbook

Does the rule say ‘serious violation of company culture’?

Unspecific rules cannot support summary dismissal.

No investigation

Was the employee walked out the same hour as the allegation?

Hearing the employee is part of lawfulness in practice.

Prepare before you escalate

Bring a compact evidence docket—not a pitch deck.

Give a compliance team or counsel the operating facts that reveal the perimeter.

01Handbook clauseThe exact rule, consultation proof and acknowledgement.

02Misconduct fileEmails, access logs, CCTV, amounts of loss, prior warnings.

03Employee explanationWhat they were asked and what they said.

04Art. 43 noticeUnion or representative service proof.

Common confusions

Questions people ask before they build.

Short answers for orientation. The right result can change with the service model and current rules.

Does for-cause mean no severance?

If Art. 39 is lawfully made out, statutory N is generally not due. If it is not made out, expect 2N or reinstatement risk — far more than N.

Is a criminal case required?

Only for the criminal-liability item. Other Art. 39 items are employment facts, but they must still be serious and proved.

Primary authorities

Reviewed sources support orientation, not a fact-specific assessment.

National laws database (NPC)

PRC Labor Contract Law (gov.cn)

Ministry of Human Resources and Social Security

Supreme People’s Court