Labor Contract Law 3

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Article 39 An Employer may terminate the labor contract if the employee:

(1) fails to meet the requirements for employment during the probation period;

(2) materially breaches the Employer's rules and regulations;

(3) causes substantial loss to the Employer due to his serious dereliction of duty or engagement in graft for personal gain;

(4) establishes an employment relationship with another Employer simultaneously which materially affects the completion of his task with the original Employer, or he refuses to rectify the situation after being cautioned by the Employer;

(5) causes the labor contract to be invalid due to any of the circumstances stipulated in item (1) of the first paragraph of Article 26 of this Law; or

(6) is subject to criminal liability in accordance with the law.

Article 40 An Employer may terminate the labor contract under any of the following circumstances by giving the employee 30 days prior written notice or one month's wages in lieu of notice:

(1) where the employee is unable to resume his original work nor engage in other work arranged for him by the Employer after the expiration of the prescribed medical treatment period for an illness or non-work-related injury;

(2) where the employee is incompetent and remains incompetent after training or adjustment of his position; or

(3) a material change in the objective circumstances relied upon at the time of conclusion of the labor contract renders it impossible for the parties to perform and, after consultation, the Employer and the employee are unable to reach an agreement on amending the labor contract.

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