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Yanying Li

How to calculate employees' service years for merger or division of enterprises?

Article 33 of the 'Employment Contract Law of PRC' provides that: "A change of an employer's name, legal representative, principal person-in-charge or investor or the like shall not affect the performance of the employment contract." Article 34 provides that: "In the event of a merger or division of an employer, the original employment contract shall remain valid and be succeeded to the rights under the employment contract by the employer.


Article 10 of the Implementing Regulations: "Where an employee is transferred to a new employer other than for personal reasons, his/her service period with the former employer shall be consolidated into his/her service period with the new employer. If the original employer has paid monetary compensation to the employee, the new employer may not take into account the employee's term of service with the original employer when calculating monetary compensation payable to the employee for dissolution or termination of labor contract in accordance with the law. "


Therefore, an employee's calculation of service years would not be affected by the change of his/her investor, the change of his/her name, merger or division. In case of a transfer of working relationship not attributable to the employee, the employee's previous service years shall be recognized and calculated as a continuous basis.


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  • This article has been prepared for general reference purposes only and should not be relied on as legal advice or regarded as a substitute for detailed advice in individual cases.

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