XieZengyi: The value of open-ended contracts and the approach to their regulation: a case for Article 14 of Chinese Labor Contract Law

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The core value of open-ended contracts is to protect workers' right of employment security through dismissal protection system. If the parties are allowed to enter into a fixed-term contract at will, the legal provisions on dismissal protection will fail. Therefore, it is necessary for the legislation to restrict the use of fixed-term contracts and promote open-ended contracts. In civil law countries and regions, fixed-term contracts are generally limited to non-successive posts, and the number of time of conclusion and duration of the contracts are strictly limited. The focus of regulation of fixed-term contracts in China should be placed on the number of times of renewal, yet the scope of application of the contracts should not be stipulated. Article 14 of the Labor Contract Law has specific value: it strikes a good balance between flexibility and security and its rules are simple and easily to apply. Therefore, this article shouldn’t be easily modified. There is a close relationship between the rules of open-ended contracts and dismissal protection. In the future, China should appropriately adjust the level of dismissal protection so as to promote open-ended contracts, but should not substantially reduce the level of dismissal protection. At the same time, it is appropriate to make a proper distinction between the rules on the termination of fixed-term contracts and those on the termination of open-ended ones.