CHINA Law and Practice Contributed by: Yang Cheng, Songshan Liu, Yan Yu and Weina Wang, Lantai Law Firm
2. Initial Steps 2.1 Communication to the Reporter and the Respondent Under PRC law, neither the reporter nor the respond - ent has an automatic statutory right to be informed that an HR internal investigation has been opened. Employment laws do not impose a general obligation on employers to notify any party at the initiation stage of an investigation. PRC law does not prescribe any mandatory notice timing, form or content. Whether to notify the reporter or the respondent is largely a matter of internal rules and case-specific judgment. In practice, early noti - fication is often avoided to reduce risks of evidence interference, collusion or retaliation. Where employers choose to provide notification, it is typically limited to confirmation that an investigation has commenced and to basic co-operation or confi - dentiality requirements, without disclosure of sensitive details or the reporter’s identity. Any voluntary notifica - tion must comply with personal information protection principles and be limited to individuals with a legiti - mate need to know. Regardless of whether notification is given at the investigation stage, respondents must be afforded an opportunity to explain or defend themselves before any disciplinary action, job adjustment or termination decision is made, in order to satisfy procedural fair - ness requirements. 2.2 Communication to Authorities Under PRC law, the initiation of an HR internal inves - tigation does not, by itself, trigger a general obligation to report to government authorities. Reporting obli - gations arise only where specific statutory risks are involved, and internal investigations may not delay or replace such reporting. Mandatory reporting applies in limited scenarios. Most notably, production safety accidents must be promptly and truthfully reported under Article 83 of the Work Safety Law, and internal investigations can - not substitute statutory accident reporting. Mandatory reporting also applies where investigations uncover
actual or suspected harm to minors, which must be reported to public security authorities. In labour law matters, there is generally no obliga - tion to proactively report internal investigation findings to labour authorities. However, where investigations reveal serious or systemic violations, early commu - nication with competent authorities is often treated as a practical compliance measure. Similar reporting obligations may arise in cases involving data security or cybersecurity incidents, depending on the nature and severity of the risk. Outside mandatory scenarios, PRC law permits vol - untary reporting where public safety, data security or significant compliance risks are involved. Any such reporting should be limited to necessary factual infor - mation and remedial measures, and must comply with personal information protection requirements. 2.3 Confidentiality Agreements and NDAs Employers are generally permitted to require parties involved in an HR internal investigation to comply with confidentiality obligations, including through the sign - ing of NDAs. This practice is common in misconduct, fraud, harassment, data incident and audit-related investigations. The legal basis lies in Article 23 of the Labor Contract Law and Article 22 of the Labor Law, which allow employers and employees to agree on confidentiality obligations relating to business secrets and intellectual property. In practice, confidential - ity undertakings may be required from investigation subjects, witnesses, internal personnel and external advisers to prevent information leakage. Confidentiality arrangements are subject to clear legal limits. NDAs must be specific and proportionate, and may not be drafted so broadly as to disguise non- compete obligations, restrict personal freedom, sup - press lawful reporting or circumvent personal informa - tion protection requirements. NDAs cannot legitimise unlawful evidence collection or override employees’ statutory rights. Confidentiality duties may also arise even without a separate NDA, including from employment contracts, employees’ duties of loyalty and good faith, and statu - tory protections of trade secrets and personal infor -
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