Except where the investor chooses to sell the company, a restructuring will mostly mean that employees will need to be laid off. The way employees are terminated, and the liabilities that the company has to incur, will differ depending on the situation. It goes without saying that companies would have to pay any outstanding salaries and social security contributions. Investors should be aware that under certain circumstances, not paying employees their salaries for more than three months constitutes a crime, and may lead to fines and even prison sentences for the executives involved. Instances where employees or local governments exert pressure by less formal means are not unheard of. The employer and employee can end the relationship by mutual agreement, which is the most advisable. In such a case both parties can work out a compensation arrangement for the employee’s temporary loss of livelihood. –
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