Source: OT-Team(G), 人民法院报
A foreign teacher in Beijing has successfully had his labor relationship recognized under China's newly implemented labor law.
The Beijing No.1 Intermediate People's Court applied the newly implemented Interpretation (II) of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases ("Interpretation II") to conclude a labor dispute case, ruling to dismiss the appeal of a bilingual kindergarten and uphold the lower court's decision.
Case Background
The kindergarten, which offers specialized English-taught programs, had employed a foreign national, S, as an English instructor from March 13, 2023, to March 19, 2024. According to S, he worked full-time from Monday to Friday, clocking in and out, and was required to be on-site even when not teaching. The kindergarten paid him a fixed monthly wage. S argued that this constituted an employment relationship.
The kindergarten, however, contended that the two parties had signed a "Statement of Employment Terms" defining their arrangement as a service relationship, not an employment one. S applied for labor arbitration, requesting confirmation that a labor relationship existed during his employment. The local labor arbitration commission ruled in favor of S. Dissatisfied, the kindergarten filed a lawsuit, claiming there was no labor relationship.
First Instance Judgment
The trial court found that S was under the kindergarten's management and performed work integral to its operations, receiving fixed monthly remuneration. The court therefore held that the working arrangement met the substantive characteristics of an employment relationship.
However, the court noted that under Chinese law, employers hiring foreigners must obtain employment permits on their behalf. Only after approval and the issuance of a work permit may the foreigner be lawfully employed.
S began working on March 13, 2023, but did not obtain a work permit from the Beijing Foreigners Working in China Service Center until May 12, 2023, valid for one year. Therefore, S only acquired legal work eligibility from that date. The court ruled that a lawful employment relationship existed between the two parties from May 12, 2023, to March 19, 2024.
The kindergarten appealed the decision to the Beijing No.1 Intermediate People's Court.
Appellate Court Ruling
The appellate court reviewed the case under Interpretation II, which took effect on September 1, 2025. Article 4 of the Interpretation stipulates that:
"Where a foreign national establishes a working relationship with an employer within the territory of the People's Republic of China, and one of the following conditions is met, the people's court shall support the foreign national's request for confirmation of a labor relationship:
(1) The foreign national has obtained permanent residence;
(2) The foreign national has obtained a work permit and is lawfully residing in China;
(3) The foreign national has completed relevant procedures in accordance with state regulations."
During the appeal, S submitted valid residence permits covering the periods from April 14, 2023, to May 25, 2023, and from May 25, 2023, to March 31, 2024. Accordingly, the court held that between May 12, 2023, and March 19, 2024, S met the dual legal requirements of having a valid work permit and lawful residence, qualifying him to establish a labor relationship with a domestic employer.
The court therefore affirmed that the employment relationship during that period was lawful and valid, rejecting the kindergarten's appeal and upholding the lower court's decision.
Legal Significance
Under Article 41 of the Exit and Entry Administration Law of the People's Republic of China, foreigners working in China must obtain both a work permit and a work-type residence permit. Employers are prohibited from hiring foreigners lacking either document.
However, the Exit and Entry Administration Law only prescribes administrative penalties—such as fines, confiscation of illegal income, or liability for responsible personnel—for violations, without clarifying whether a labor relationship is legally established in the absence of these permits.
Before Interpretation II took effect, Article 33 of Interpretation I provided that if a foreigner had not lawfully obtained employment documents, the court would not support a request to confirm a labor relationship. In practice, courts often interpreted "employment documents" to mean only the Employment Certificate defined under the Regulations on the Administration of Employment of Foreigners in China, overlooking whether the foreigner also possessed a valid residence permit.
This sometimes created inconsistencies, as foreigners might obtain a work permit but fail to renew or timely apply for residence permits. Interpretation II resolves this issue by explicitly requiring both a valid work permit and lawful residence status for a labor relationship to be legally recognized—emphasizing that the two are necessary and inseparable.
Guidance for Foreign Workers and Employers
Foreigners seeking employment in China must ensure that their employers apply for and obtain the requisite work permits and employment certificates, and that they themselves apply promptly for residence permits. Only after obtaining both permits may they legally work in China.
Foreigners who work without the "dual permits" not only risk administrative penalties but also forfeit legal protection of their labor rights. Employers, meanwhile, must lawfully assist in processing employment permits and ensure compliance with regulations.
Once foreigners have obtained both the work and residence permits, they enjoy the same lawful labor rights as Chinese employees, including timely and full payment of wages and social insurance coverage. Employers who fail to meet these obligations may face legal risks and potential litigation.
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