The key lies in the essential core clauses.

This article is reprinted from: Labor Daily

Zhou Bin

If a labor contract lacks the legally required essential clauses, whether it is valid depends on whether the missing clauses are considered core essential terms.

According to Article 17 of the Labor Contract Law of the People’s Republic of China, a labor contract should include the following nine clauses: the employer’s name, address, and legal representative or main person in charge; the employee’s name, address, and resident ID card or other valid identification number; the term of the contract; the scope of work and work location; working hours and rest and leave; wages; social insurance; labor protection, working conditions, and occupational hazard prevention; and other matters that laws and regulations require to be included.

These essential clauses can be divided into three categories: First, major core clauses, mainly including the employee’s identity information, work content, and wages. If core clauses are missing and the parties cannot reach an agreement through negotiation, it should be deemed that the employer has failed to fulfill the legal obligation to establish a written labor contract and bears corresponding legal responsibilities. Second, remedial clauses, such as working hours and rest and leave, which can be supplemented and determined according to law if missing, without affecting the validity of the contract. Third, declaratory clauses, such as labor protection, working conditions, and occupational hazard prevention, which, even if absent, do not affect the recognition of a written labor contract.

Work content is a key element of the labor relationship, directly determining the scope of the employee’s obligations and job attributes. If the written contract does not specify the work content, courts cannot determine what labor the employee should perform, which undermines the fundamental basis for contract performance. Wages are the core consideration for the employee’s labor, a critical element of the labor contract. According to Article 11 of the Labor Contract Law, if wages are not clearly agreed upon, they can be determined based on collective agreements or the principle of equal pay for equal work; but if wages are not agreed at all, this constitutes a missing core clause, directly affecting contract performance and legal basis.

Whether the contract term is a core clause is subject to debate in judicial practice and theory. One view holds that the contract term is the basis for the duration of the labor relationship, determining the period for rights and obligations. Fixed-term, indefinite, and task-based contracts have distinct legal effects. If the contract lacks a term along with work content and wages, it should be deemed invalid, and the employer must pay double wages for uncontracted work. Another view considers that the provisions in Article 17 of the Labor Contract Law regarding essential clauses are normative guidelines; the absence of a contract term does not necessarily mean the contract is invalid, and missing or unclear terms can be supplemented legally.

Guiding Case No. 179 by the Supreme People’s Court clarifies that the absence of some essential clauses in a written agreement does not equate to the absence of a written labor contract, nor does it automatically negate the validity of the contract. If the written agreement between the employer and employee includes main terms such as work content, wages, and contract duration that comply with Article 17 of the Labor Contract Law, the employee’s claim for double wages due to the lack of a written contract will not be supported.

In summary, the absence of core clauses such as work content, wages, and contract duration significantly increases the legal risk of the contract being invalid. Even if the contract is deemed invalid due to missing essential clauses, the parties may still have an actual labor relationship, and the employer remains responsible as the main employment entity, potentially facing administrative penalties.

Text by Zhou Bin