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April 2025
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Spotlight on News
1. Supreme People's Court and Supreme People's Procuratorate issued judicial interpretation on criminal cases of intellectual property rights to strengthen trade secret protection.
2. Ministry of Human Resources and Social Security and the Supreme People's Court jointly released the Fourth Batch of Typical Cases of Labor and Personnel Disputes.
Legislation Updates
1. Shanghai released the Supporting Cases for Compliance Guidance on Preventing Commercial Bribery Risk in Pharmaceutical Enterprises.
2. Shenzhen Intermediate People's Court issued the Guidelines for Enterprise Trade Secret Management and Rights Protection.
3. Guangzhou Human Resources Bureau introduced standardized template documents for flexible retirement policies, designed for corporate reference and use.
Case Study
1. The Shanghai No. 2 Intermediate People's Court ruled that employers may not reject overtime compensation claims or withhold overtime pay solely due to lack of prior approval.
2. The Beijing No. 1 Intermediate People's Court ruled that terminating a labor contract solely because an employee refused to accept a Performance Improvement Plan (PIP) constitutes unlawful dismissal, as such refusal does not inherently violate company policies.
Spotlight on News
1. Supreme People's Court and Supreme People's Procuratorate issued judicial interpretation on criminal cases of intellectual property rights to strengthen trade secret protection.
On April 24, 2025, China’s Supreme People’s Court and Supreme People’s Procuratorate jointly released the Interpretation on Several Issues Concerning the Application of Law in Handling Criminal Cases of Intellectual Property (the “Interpretation”). Aligned with the Criminal Law Amendment (XI), the Interpretation provides a systematic framework for addressing IP crimes by consolidating and replacing three prior judicial interpretations. Key updates include refined definitions of trade secret violations: unauthorized duplication constitutes “theft”, while unauthorized access via computer systems qualifies as “electronic intrusion” . The Interpretation also clarifies thresholds for “serious circumstances”, such as losses or illegal gains exceeding RMB 300,000 or causing bankruptcy due to severe operational difficulties. Methods for calculating losses and gains are detailed to ensure consistent judicial application. The Interpretation aims to standardize IP crime adjudication and foster an innovation-friendly legal environment.
2. Ministry of Human Resources and Social Security and the Supreme People's Court jointly released the Fourth Batch of Typical Cases of Labor and Personnel Disputes.
On April 9, 2025, China’s Ministry of Human Resources and Social Security (MOHRSS) and the Supreme People’s Court jointly released the Fourth Batch of Typical Cases of Labor and Personnel Disputes, comprising five cases in total. These cases address key issues such as social insurance, non-compete agreements, and worker protections.
Regarding worker rights, Case 1 clarifies that extending medical leave for severe workplace injuries requires official approval from Municipal Labor Ability Assessment Committee per the Work Injury Insurance Regulations, certificates from medical institutions alone are not adequate. Case 2 requires employers to protect pregnant workers capable of their original duties, banning disguised harm (e.g., job changes, increased workloads, or pay cuts) during pregnancy, maternity, or nursing periods.
For social insurance, Case 3 entitles dependents of deceased employees to claim unpaid survivor pensions if employers failed to enroll them under relevant policies. While mandates employers to pay all required contributions, employees who covered contributions on behalf of employers may seek reimbursement.
Regarding non-compete issues, Case 5 invalidates non-compete clauses for non-management, or non-technical employees unless their roles inherently involve trade secrets or intellectual property rights.
Legislation Updates
1. Shanghai released the Supporting Cases for Compliance Guidance on Preventing Commercial Bribery Risk in Pharmaceutical Enterprises.
The Shanghai Market Regulation Bureau’s Enforcement Division released the Supporting Cases for Compliance Guidance on Preventing Commercial Bribery Risk in Pharmaceutical Enterprises (the “Supporting Cases”) on April 18, 2025. Adopting a three-part framework based on factual background, legal analysis, and compliance recommendations - the Supporting Cases deliver targeted and practical guidance for pharmaceutical companies.
By analyzing real-world scenarios, the Supporting Cases clarify the legal boundaries between legitimate business practices and commercial bribery, exposing common illegal tactics in the pharmaceutical sector such as off-the-book rebates, disguised kickbacks under the guise of donations, and tying free equipment provision to consumables sales. These analyses not only demystify hidden risks but also translate insights into actionable steps, offering recommendations for compliance system upgrades, risk monitoring enhancements, and internal oversight improvements. Through this dual approach - risk identification paired with procedural safeguards - the Supporting Cases are expected to help companies to refine governance frameworks and elevate compliance standards systematically.
2. Shenzhen Intermediate People's Court issued the Guidelines for Enterprise Trade Secret Management and Rights Protection.
On April 9, 2025, Shenzhen Intermediate People's Court, alongside the Qianhai Management Bureau and Shenzhen IP Protection Center, released the Guidelines for Enterprise Trade Secret Management and Rights Protection (the “Guidelines” ), offering actionable steps for end-to-end trade secret protection. The Guidelines feature three key innovations. First, it establishes an “8 Dimensions, 22 Scenarios” framework categorizing leaks of trade secrets across R&D, production, and operations, supported by real-case analyses and risk mitigation strategies. Second, the Guidelines redefine personnel management by integrating a lifecycle control system spanning pre-employment background checks, role-based access controls, and post-exit audits. Additionally, the Guidelines outline a three-pronged legal strategy (administrative, civil, criminal) and simplify procedures using flowcharts, evidence checklists, and local regulatory insights to streamline enforcement of protection of trade secrets.
3. Guangzhou Human Resources Bureau introduced standardized template documents for flexible retirement policies, designed for corporate reference and use.
On April 17, 2025, Guangzhou Human Resources Bureau issued the Notice on Standardized Documents for Flexible Retirement of Enterprise Employees (the “Notice”), offering standardized templates for early retirement notices, deferred retirement agreements, and termination arrangements. Employees opting for flexible early retirement must submit written notice to employers at least three months in advance, subject to three core eligibility criteria: (1) completion of the minimum pension contribution period, (2) reaching age thresholds (50/55 for females, 60 for males), and (3) retiring within three years of statutory retirement age. For deferred retirement, employers and employees must formalize agreements specifying the deferral period while maintaining full labor protections until retirement, with automatic termination upon expiration or optional early termination by mutual agreement. The Notice provides a structured yet flexible framework for retirement transitions.
Case Study
1. The Shanghai No. 2 Intermediate People's Court ruled that employers may not reject overtime compensation claims or withhold overtime pay solely due to lack of prior approval.
Facts
Huang, a senior engineer at an IT company, was subject to internal policies requiring employees to request approval for overtime work and use compensatory leave within the same month; failure to comply voided overtime pay eligibility. After resigning in August 2023, Huang sued the company over unpaid overtime, which the company contested by citing his lack of formal approval. The first-instance court dismissed his claim, leading Huang to appeal to the Shanghai No. 2 Intermediate People's Court.
Judge’s Viewpoint
The Shanghai No. 2 Intermediate People's Court clarified that while employees must generally comply with lawful overtime arrangements, those claiming unapproved overtime must provide evidence proving the work occurred, such as instructions from supervisors, managerial acknowledgment, or tangible work outputs. Although Huang’s overtime lacked formal approval, he submitted emails between his supervisor and company executives documenting his hours, along with HR chat records. The supervisor’s act of compiling and reporting Huang’s overtime was deemed implicit acknowledgment, and the executives’ failure to dispute the records further validated his claim. The court concluded that procedural noncompliance did not negate the factual overtime work, ordering the company to pay Huang over RMB 60,000 in overtime wages.
2. The Beijing No. 1 Intermediate People's Court ruled that terminating a labor contract solely because an employee refused to accept a Performance Improvement Plan (PIP) constitutes unlawful dismissal, as such refusal does not inherently violate company policies.
Facts
On May 9, 2022, the company demanded that Wang participate in a Performance Improvement Plan (PIP) following his 2021 “M-” performance rating, requiring confirmation by noon on May 10, 2022, with non-compliance regarded as refusal. Wang explicitly rejected the PIP twice, agreeing only to reasonable work tasks while disputing the validity of his performance rating. On May 16, 2022, the company issued a “Serious Dereliction of Duty" warning, asserting his refusal violated internal policies and justified immediate termination. Wang then filed a labor arbitration claim for unlawful termination, which ruled in his favor. The company later challenged the arbitration award and sued before court.
Judge’s Viewpoint
The Beijing No.1 Intermediate People's Court ruled the company’s dismissal of Wang unlawful. Despite citing his 2021 "M-" rating and underperformance to justify a Performance Improvement Plan (PIP), the company failed to prove "M-" legally equated to incompetence. Even if incompetence were assumed, statutory procedures were violated: no training or job adjustments were provided as required by law, and the PIP lacked training provisions. The company’s claim that Wang’s PIP refusal constituted “dereliction of duty” lacked support. The termination breached Article 40 of the Labor Contract Law, mandating compensation for illegal dismissal.
Introduction of Llinks Labor and Employment Law Practice
Llinks provides clients with efficient solutions and pragmatic labor law compliance advice based on clients’ business needs. Our services include: providing daily labor law compliance advice and training; designing strategies and plans for mass layoffs and participating in on-site negotiations; assisting in solving personnel replacement in mergers and acquisitions, and providing on-site support and crisis management for strikes and other collective action; representing clients in labor arbitrations and litigations involving terminations of employment contracts, bonus payments, etc.; advising on issues of white-collar crime, anti-corruption and anti-bribery, anti-discrimination, personal information protection, protection of trade secrets and non-competition obligation, equity incentives, and senior-level employee dismissals, etc.
Awards and Honors:
In 2024 and 2025, Patrick Gu was recommended as a Ranked Lawyer in the Greater China Region Guide by Chambers and Partners.
In 2023 and 2025, Patrick Gu was recommended for Regulatory and Compliance, Labor and Employment by The Legal 500 Greater China Ranking.
In 2024, Patrick Gu was recommended for Labor and Employment by The Legal 500 Greater China Ranking.
In 2023, Patrick Gu was recommended as a Leading Lawyer by The Legal 500.
In 2023, Llinks Law Offices received the Labor & Employment PRC Firms of the Year award from The Legal 500.
In 2021, 2020 and 2019, Patrick Gu was consecutively recommended as a Leading Labor Lawyer by China Law & Practice.
In 2023, 2022, 2021, 2020 and 2019, Patrick Gu was consecutively recommended as a Top-Tier Labor Lawyer by LEGALBAND.
In 2020, Llinks Law Offices received the Best Law Firm for Client Service (China Awards) from Chambers and Partners.
Authors
 | Patrick Gu Partner +86 188 1746 8818 +86 21 3135 8722 patrick.gu@llinkslaw.com |
 | Lin Zang Associate | _ |
 | Cecilia Wang | _ |
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