Can an employer unilaterally terminate an expired employment contract more than one month later?

The Judicial Interpretation (II) of the Supreme People's Court on the Application of Law in the Trial of Labor Dispute Cases took effect on 1 September 2025. Since then, employers have been uncertain about the one-month grace period that follows the expiry of an employment contract. Can an employer terminate unilaterally within that month, and what happens once more than a month has passed?

First, the one-month grace period as originally understood concerns the conclusion of an employment contract with a newly hired employee and exemption from liability for double wages. If no written contract is concluded within one month, the employer must pay double wages as prescribed. The prevailing view is that the employer still enjoys that one-month grace period when it renews an existing contract. Article 11 of Judicial Interpretation (II), by contrast, introduces a one-month "objection period", which aims to balance the protection of employees against respect for an employer's managerial autonomy. It safeguards the employee's right to renew on the original terms while giving the employer one month to raise objections, so the two concepts differ slightly. An article published on the official WeChat account of the Xuhui District Human Resources and Social Security Bureau, entitled "Terminating more than one month after expiry: beware of N becoming 2N", notes that after an employment contract expires the employer has a one-month "termination window". Where the conditions for termination are met, termination within that window is lawful, and the employer need only pay economic compensation (N). Once one month passes without termination, the employee acquires a "right to request renewal" and the employer loses the right to terminate at will. A forced termination is then unlawful and statutory compensation for unlawful termination (2N) is payable. In (2025) Jing 01 Min Zhong No. 13494 and (2026) Min 05 Min Zhong No. 1590, the courts held that the contracts were fixed-term and that no statutory circumstance required an open-ended contract. The company had notified the employee of termination less than one month after expiry, in conformity with the judicial interpretation. The company's claim that it need not pay statutory compensation for unlawful termination therefore conformed to the relevant legal provisions.

Second, the employee's "right to request renewal" means that once the employer's objection period has run beyond one month, the employee may require renewal. The court will support that request. This preserves a balance between the parties, but it fundamentally alters the position under Article 34 of Judicial Interpretation (I), where the parties stood on equal footing and either could end the relationship at any time. To some extent it places the initiative in the employee's hands. Three elements must be satisfied for the court to grant the request: the employee keeps working after expiry, the employer raises no objection for more than one month, and the employee asks to renew on the original terms. On that analysis, more than a month may have passed while the employer says nothing at all. If the employee then asks to renew, and the employer ignores even a request for explanation and reasonable discussion, a unilateral termination on the ground that "the employee does not agree to renew" is highly likely to be unlawful. Where the employer has expressed no position whatsoever, it cannot be treated as having asked the employee to renew or conclude a contract. Article 6 of the Regulation on the Implementation of the Labor Contract Law therefore cannot apply.

Finally, employers should decide whether to renew in good time and communicate that decision. On the one hand, they should establish an expiry alert mechanism that flags and handles each contract one month before it expires, so that renewal or termination is discussed with the employee before expiry. On the other hand, when the first employment contract expires, the employer should assess the employee fully before deciding whether to renew. If the contract is renewed, the expiry of the second contract will convert it into an open-ended one. If it is not renewed, the employer should terminate unilaterally in good time and pay compensation. If the employer remains undecided, the parties may agree to extend the term by no more than one year, which preserves the right of unilateral termination.

Employees whose contracts are about to expire and who wish to renew should submit a written request to the employer promptly, in a form that preserves evidence, such as email, EMS courier, WeChat message or SMS. This avoids the adverse legal consequences of refusing to renew. Those consequences are mainly twofold: no compensation is payable where the employee declines renewal on maintained or improved terms, and compensation is payable where the employee still refuses to sign after more than one month.

Relevant statutory provisions:

Articles 44(1) and 46(5) of the Labor Contract Law of the People's Republic of China provide that, upon expiry of an employment contract, an employer that ends a fixed-term contract must pay economic compensation. The exception is where the employer offered to renew on the terms agreed in the contract or on improved terms and the employee declined.

Article 11 of Judicial Interpretation (II) provides that where, after an employment contract expires, the employee continues to work for the employer and the employer raises no objection for more than one month, the court shall support the employee's request that the employer renew the contract on the original terms. Where the circumstances for concluding an open-ended employment contract are met, the court shall support the employee's request that the employer conclude an open-ended contract on the original terms. Where the employer terminates the contract, the court shall support the employee's request that the employer bear the legal consequences of termination in accordance with the law.

Article 34 of Judicial Interpretation (I) of the Supreme People's Court on the Application of Law in the Trial of Labor Dispute Cases provides that where, after an employment contract expires, the employee continues to work for the original employer and the original employer raises no objection, the parties are deemed to have agreed to continue performing the contract on the original terms. If either party proposes to end the employment relationship, the court shall support it.

Under Article 14 of the Labor Contract Law, where an employer should have concluded an open-ended employment contract with an employee but did not, the court may deem an open-ended employment relationship to exist between the parties. It may then determine their rights and obligations by reference to the original employment contract.

Article 6 of the Regulation on the Implementation of the Labor Contract Law of the People's Republic of China provides that where an employer fails to conclude a written employment contract with an employee for more than one month but less than one year from the date employment commenced, it must pay the employee double wages each month in accordance with Article 82 of the Labor Contract Law and conclude a written contract with the employee retroactively. Where the employee does not conclude a written employment contract with the employer, the employer must notify the employee in writing of the termination of the employment relationship and pay economic compensation in accordance with Article 47 of the Labor Contract Law.

The double wages referred to in the preceding paragraph run from the day after the employee has completed one month of employment until the day before the written employment contract is concluded retroactively.