Chapter 12 Staff and Workers

Article 80. The employment, recruitment, dismissal and resignation of staff and workers of joint ventures, and their salary, welfare benefits, labour insurance, labour protection, labour discipline and other matters shall be handled according to the state provisions related to labor and social security.

Article 81. Joint ventures shall make efforts to conduct professional and technical training of their staff and workers and establish a strict examination system so that they can meet the requirements of production and managerial skills in a modernized enterprise.

Article 82. The salary and bonus systems of joint ventures shall be in accordance with the principle of distribution to each according to his work, and more pay for more works.

Article 83. Salaries and remuneration of the general manager, deputy general manager(s), chief engineer and deputy chief engineer(s), treasurer and deputy treasurer(s), auditor and other high-ranking officials shall be decided upon by the board of directors.

Chapter 13 Trade Union

Article 84. Staff and workers of a joint venture have the right to set up grass-roots trade unions and carry on trade union activities in accordance with the Trade Union Law of the People's Republic of China and the Articles of Association of Chinese Trade Union.　　

Article 85. Trade unions in joint ventures are representatives of the interests of the staff and workers. They have the power to represent the staff and workers to sign labour contracts with joint ventures and supervise the execution of these contracts.

Article 86. The basic tasks of the trade unions in joint ventures are: to protect the democratic rights and material interests of the staff and workers pursuant to the law; to help the joint ventures with the arrangement and rational use of welfare and bonus funds; to organize political, professional, scientific and technical studies, carry out literary, art and sports activities; and to educate staff and workers to observe labour discipline and strive to fulfill the economic tasks of the enterprises.

Article 87. Trade union representatives have the right to attend as nonvoting members and to report the opinions and demands of staff and workers to meetings of the board of directors held to discuss important issues such as development plans, production and operational activities of joint ventures.

Trade union representatives have the right to attend as nonvoting members of meetings of the board of directors held to discuss and decide on awards and penalties to staff and workers, salary systems, welfare benefits, labour protection and labour insurance, etc. The board of directors shall heed the opinions of the trade unions and win its cooperation.

Article 88. A joint venture shall actively support the work of the trade union, and, in accordance with stipulations of the Trade Union Law of the People's Republic of China, provide housing and facilities for the trade union's office work, meetings, and welfare, cultural and sports activities. Each month the joint venture shall allot an amount of money totaling 2 percent of all the salaries of the joint venture's staff and workers as trade union's funds, which the trade union of the joint venture shall use according to the relevant managerial rules for trade union funds formulated by the All China Federation of Trade Unions.

Chapter 14 Duration, Dissolution and Liquidation

Article 89. The duration of a joint venture shall be implemented according to the Interim Provisions on the Duration of Joint Ventures Using Chinese and Foreign Investment.

Article 90. A joint venture may be dissolved in the following situations:

(1) Termination of duration;

(2) Inability to continue operations due to heavy losses;

(3) Inability to continue operations due to the failure of one of the contracting parties to fulfill the obligations prescribed by the agreement, contract and articles of association;

(4) Inability to continue operations due to heavy losses caused by force majeure such as natural calamities and wars, etc.;

(5) Inability to obtain the desired objectives of the operation and at the same time to see a future for development;

(6) Occurrence of other reasons for dissolution prescribed by the contract and articles of association.

In cases described in (2), (3), (4), (5) and (6) of the preceding paragraph, the board of directors shall make an application for dissolution to the examination and approval authority; in the case described in (3), the party performing the contract shall make an application to the examination and approval authority.

In the situation described in (3) of this article, the party that failed to fulfill the obligations prescribed by the agreement, contract and articles of association shall be liable to the losses thus caused.

Article 91. Liquidation shall be conducted upon announcement of the dissolution of a joint venture. The joint venture shall set up a liquidation commission according to the provisions of the Liquidation Measures of Foreign Funded Enterprises, which shall be responsible for the matters of liquidation.

Article 92. Members of a liquidation committee are usually selected among directors of a joint venture. In case the directors cannot serve or are unsuitable to be members of the liquidation committee, the joint venture may invite accountants and lawyers registered in China to do the job. When the examination and approval authority deems necessary, it may send personnel to supervise the process.

The liquidation expenses and remuneration to members of the liquidation committee shall be paid in priority from the existing assets of the joint venture.

Article 93. The tasks of the liquidation committee are: to conduct thorough check of the property of the joint venture concerned, its creditors' rights and liabilities; to work out the statement of assets and liabilities and the list of property; to put forward a basis on which property is to be evaluated and calculated: and to formulate a liquidation plan. All these shall be carried out upon approval of the board of directors.

During the process of liquidation, the liquidation committee shall represent the joint venture concerned to sue and be sued.

Article 94. Joint venture shall be liable to its debts with all of its assets. The remaining property after the clearance of debts shall be distributed among parties to the joint venture according to the proportion of each party's investment unless otherwise provided by agreement, contract and articles of association of the joint venture.

At the time when a joint venture is being dissolved, its net assets or remaining property, after the deduction of the undistributed profit, various funds and liquidation expenses of the joint venture, that exceeds the registered capital is liquidation income, on which income taxes shall be levied according to law.

Article 95. On completion of the liquidation of a dissolved joint venture, the liquidation committee shall submit a liquidation report approved by a meeting of the board of directors to the examination and approval authority, go through formalities for nullifying its registration and hand in its business license to the registration authority.

Article 96. After dissolution of a joint venture, its account books and documents shall be left in the care of the Chinese participant.

Chapter 15 Settlement of Disputes

Article 97. Disputes arising over the interpretation or execution of the agreement, contract or articles of association between the parties to the joint venture shall, if possible, be settled through friendly consultation or mediation. Disputes that cannot be settled through these means may be settled through arbitration or courts of justice.

Article 98. In accordance with the relevant written agreement on arbitration, the participants may carry out arbitration at arbitration agencies in China, or at other arbitration agencies.

Article 99. If there is no written arbitration agreement between the parties to a joint venture, each side of the dispute can file a suit with the Chinese People's Court.

Article 100. In the process of solving disputes, except for matters in dispute, parties to a joint venture shall continue to carry out other provisions stipulated by the agreement, contract and articles of association of the joint venture.

Chapter 16 Supplementary Provisions

Article 101. The Chinese office in charge of visas shall give convenient service by simplifying procedures for staff and workers from foreign countries or from Hong Kong and Macao (including their family members) who frequently cross Chinese borders.

Article 102. Chinese staff and workers going abroad for study tours, business negotiations or training shall go through the procedures for going abroad (cross border) according to the relevant provisions of the state.

Article 103. Staff and workers from foreign countries or from Hong Kong and Macao working for a joint venture can bring in needed means of transport and items for office use, paying taxes according to the relevant provisions of Chinese tax laws.

Article 104. Joint ventures set up in the special economic zones shall abide by the laws and administrative regulations otherwise provided, if any.

Article 105. The regulations shall come into force on the day of promulgation.