CHINA Law and Practice Contributed by: Yang Cheng, Songshan Liu, Yan Yu and Weina Wang, Lantai Law Firm
Mandatory investigations arise mainly in three situa - tions. • Where sexual harassment complaints or serious workplace safety incidents occur, employers have a statutory duty to investigate and take correc - tive measures under the Law on the Protection of Women’s Rights and Interests and work safety legislation. • Where employers intend to terminate employment for serious misconduct, gross negligence or cor - ruption, internal investigation becomes a proce - dural necessity, as Article 39 of the Labor Contract Law places the burden of proof on the employer. • Where the legality or implementation of internal rules or democratic procedures is challenged by authorities or trade unions, employers must verify the relevant facts to fulfil statutory compliance obligations. In addition, internal investigations may be required in response to government enforcement demands or major compliance incidents as part of risk mitigation. Overall, mandatory HR internal investigations arise from the combined effect of statutory duties, proce - dural requirements and the employer’s evidentiary burden, rather than from a single legal trigger. 1.6 Prohibition on Carrying Out an HR Internal Investigation Under PRC law, HR internal investigations may not be carried out, or must be suspended, in certain cir - cumstances. • Internal investigations must not replace or inter - fere with administrative or judicial investigations. Employers have no law enforcement powers and must avoid actions that prejudice official evidence preservation or fact-finding. Where matters fall within the statutory jurisdiction of competent authorities, internal investigations may need to be suspended. • Investigations must comply with personal informa - tion protection requirements. Excessive data col - lection, unlawful monitoring, unauthorised access to personal accounts or devices, or processing of
sensitive personal information without a legal basis is prohibited. • Investigations must not involve discrimination, retaliation or infringement of employees’ lawful rights, including personality, reputation, privacy or participation rights, and may not be used to sup - press lawful complaints or trade union activities. Where employers lack lawfully adopted investigation procedures or basic safeguards on confidentiality and data handling, investigative actions should be limited or deferred. In all cases, internal investigations must remain within management authority and applicable Where an HR internal investigation is neither legally required nor prohibited, the decision to proceed is pri - marily a matter of risk, necessity and proportionality. As a threshold issue, employers should consider whether a lawful and workable internal basis exists. Investigations should be grounded in lawfully adopted and disclosed internal rules. In the absence of such a framework, initiating a formal investigation may cre - ate procedural and evidentiary risks and should be approached with caution. legal boundaries. 1.7 Other Cases Employers should also assess whether fact-finding is genuinely necessary and can be conducted law - fully and proportionately. Investigations should not proceed where evidence collection would require unlawful personal data processing, excessive intru - sion into privacy or disproportionate interference with employee rights. Conversely, where allegations may affect disciplinary or termination decisions, regulatory responses, or significant compliance or reputational risks, internal investigations are often appropriate and practically indispensable, serving to preserve evidence and sup - port defensible decision-making. Where issues are minor, information is vague, or con - cerns can be addressed through routine management or informal clarification, employers may reasonably refrain from initiating a formal investigation or limit their response to a preliminary review.
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