CHINA Law and Practice Contributed by: Yang Cheng, Songshan Liu, Yan Yu and Weina Wang, Lantai Law Firm
Beijing Lantai Law Firm 29th Floor, Tower B Third Estate Mansion
No 1 Shuguangxili Chaoyang District Beijing China
Tel: +86 10 5228 7777 Fax: +86 10 5228 7777 Email: info@lantai.cn Web: www.lantai.cn
1. Opening an HR Internal Investigation 1.1 Circumstances HR internal investigations are typically initiated when the employer becomes aware of credible indications of employee misconduct, compliance breaches or other risks that may give rise to legal liability. Most commonly, such indications arise from suspected violations of internal rules or codes of conduct. In these circumstances, employers initiate investiga - tions to clarify the facts, preserve relevant evidence and assess whether disciplinary action or unilateral termination may be lawfully supported. Investigations are frequently triggered where serious breaches of work discipline or employee conduct rules are alleged, particularly if unilateral termination is contemplated. Typical scenarios include serious policy violations, gross negligence, corruption, falsi - fication of employment materials, failure to meet hir - ing conditions or other misconduct falling within the scope of Article 39 of the Labor Contract Law. Internal investigations are also commonly initiated in response to suspected criminal conduct or major compliance risks, such as embezzlement, bribery, trade secret leakage, unfair competition or non- compete violations, in order to assess potential legal exposure and determine appropriate internal or exter - nal responses.
In addition, allegations involving discrimination, sex - ual harassment, workplace violence or other serious employee relations issues generally require prompt investigation, given employers’ statutory and general duties to take reasonable preventative and protec - tive measures while safeguarding confidentiality and personal rights. Finally, investigations may be triggered by external regulatory or law enforcement inquiries, whistle-blow - er reports or internal audit findings. In cross-border operations, employers may also initiate investigations at an early stage where overseas regulatory scrutiny is reasonably anticipated. 1.2 Bases Under PRC law, the legal bases for HR internal inves - tigations can be broadly divided into mandatory inves - tigations and investigations that are permitted but not legally required, both of which remain subject to over - arching legal constraints. Mandatory investigations arise only in limited statutory scenarios. These include cases where employee com - plaints or trade union objections concern internal rules directly affecting employees’ interests, sexual harass - ment complaints that require prompt investigation and handling, and workplace accidents or major safety risks that must be investigated under work safety legislation. In addition, in labour disputes, employers bear the burden of producing evidence under their
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