Employment law in Asia: contracts, probation, working time and termination
The mechanics of employing someone differ more across Asia than across Europe. Termination is nearly at-will in Singapore and Hong Kong and close to impossible without cause in Japan, Korea and China; probation is unregulated in one country and capped at two months in the next; a written contract is optional in one place and mandatory within a month in another. This guide covers the rules an employer — or its EOR — must follow in the region’s main markets.
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Contracts and probation
| Market | Written contract | Probation | Fixed-term contracts |
|---|---|---|---|
| Hong Kong | Not mandatory; written terms strongly advised | No statutory limit; first month terminable without notice | Permitted; continuous-contract rules apply regardless |
| Singapore | Key employment terms in writing within 14 days | No statutory limit; 3–6 months customary | Permitted without limit |
| Mainland China | Mandatory within one month; double pay penalty thereafter | Capped by contract length: 1 month (contracts under 1 year) to 6 months (3+ years) | Two consecutive fixed terms, then open-ended on renewal |
| Japan | Written notice of key terms mandatory | Customary 3–6 months; dismissal still needs objective grounds | Permitted; conversion right after 5 years |
| South Korea | Mandatory written contract | Customary 3 months; reduced notice protection in first 3 months | Capped at 2 years, then deemed permanent |
| India | Appointment letter customary; state rules vary | Typically 3–6 months; no federal cap | Permitted; fixed-term workers get parity under the labour codes |
| Indonesia | Mandatory for fixed-term; advisable for permanent | Maximum 3 months, permanent contracts only | Capped at 5 years total; compensation payable at end |
| Philippines | Advisable; regularisation after 6 months | Maximum 6 months, then regular employee | Permitted only for genuinely fixed-term work |
| Vietnam | Mandatory written contract | Up to 180 days for management, 60 for degree-level, 30 otherwise | One fixed term (to 36 months), then indefinite |
| Malaysia | Mandatory for contracts over 1 month | No statutory limit; 3–6 months customary | Permitted; genuine fixed term required |
| Thailand | Not mandatory; advisable | No statutory limit; 119 days customary to avoid severance | Permitted for project work |
Working time and overtime
The standard week is 40 hours in China, Japan, Korea and Vietnam (Vietnam permits 48), 44 in Singapore and Hong Kong has no statutory maximum. Overtime premiums are 150 % on weekdays in most markets, rising to 200 % or 300 % on rest days and public holidays in China, Vietnam and Korea. Japan caps overtime at 45 hours a month and 360 a year in principle, with a hard ceiling of 100 hours in any month under the 2019 work-style reforms; Korea caps the total working week at 52 hours. Singapore’s Employment Act overtime rules apply only below a salary threshold, and Hong Kong has no statutory overtime rate at all. Managers are exempt from overtime in most jurisdictions, but the definition of “manager” is narrower than employers assume, particularly in Japan.
Termination and severance
The single biggest difference across the region
Hong Kong and Singapore allow termination on notice without a reason (subject to anti-discrimination and, in Singapore, wrongful-dismissal claims). Malaysia and Thailand allow it with severance. China, Japan, South Korea, Indonesia, Vietnam and the Philippines require a lawful cause — and in Japan and Korea the courts interpret cause so narrowly that dismissal of a permanent employee for performance is rarely upheld. An EOR carries the process; you make the decision, and in the cause jurisdictions you should expect a negotiated exit rather than a dismissal.
| Market | Notice | Cause required? | Statutory severance |
|---|---|---|---|
| Hong Kong | 7 days minimum after probation; contractual, typically 1–3 months | No, subject to unlawful-dismissal protections | 2/3 month per year after 24 months (severance) or 5 years (long service), capped HK$390,000 |
| Singapore | 1 day to 4 weeks by service, or contractual | No, but dismissal must not be wrongful | None statutory; 2–4 weeks per year customary in retrenchment |
| Mainland China | 30 days (or pay in lieu) for statutory grounds | Yes; enumerated grounds only | 1 month per year of service (economic compensation); double if dismissal unlawful |
| Japan | 30 days or pay in lieu | Yes; must be objectively reasonable and socially acceptable | None statutory; negotiated packages of several months are the norm |
| South Korea | 30 days or pay in lieu | Yes; just cause, with written notice of grounds | Statutory severance of 30 days’ pay per year of service, payable on any exit after 1 year |
| India | 30 days or per contract; more for “workmen” | For workmen, yes; retrenchment rules apply | 15 days per year for workmen; gratuity after 5 years for all |
| Indonesia | 14 days’ notice for termination | Yes; grounds set by law, with bipartite negotiation | Severance plus long-service pay plus compensation; formula by ground and service, up to about 19 months |
| Philippines | 30 days for authorised causes; twin-notice for just causes | Yes; just or authorised causes | 1/2 to 1 month per year for authorised causes |
| Vietnam | 30–45 days by contract type | Yes; enumerated grounds | 1/2 month per year for service not covered by unemployment insurance |
| Malaysia | 4–8 weeks by service | Effectively yes for unfair-dismissal purposes | 10–20 days per year below the salary threshold; customary above |
| Thailand | One pay period, at least 30 days | No, with severance; yes to avoid severance | 30 to 400 days’ pay by service (120 days to 20+ years) |
Employee or contractor
Every jurisdiction here will look through a contractor agreement to the reality of the relationship: fixed hours, a single client, integration into the team, provided equipment and direction of the work all point to employment. The consequences of misclassification are back-payment of social contributions and leave in most markets, deemed employment (with the termination protections above) in Korea, the Philippines and Indonesia, and in China the double-pay penalty for the missing written contract. The practical rule: if you would manage the person as an employee, employ them — through an EOR if you have no entity.
Disputes
Labour disputes in China go first to mandatory arbitration at the local labour arbitration commission; in Korea to the Labor Relations Commission; in Japan to the labour tribunal or courts, with a fast-track mediation system; in Indonesia through bipartite negotiation, mediation and the Industrial Relations Court; in the Philippines to the NLRC; in Hong Kong to the Labour Tribunal; in Singapore to the Tripartite Alliance and the Employment Claims Tribunals. Employees win a large share of contested dismissals in the cause jurisdictions, which is why experienced employers there negotiate exits.
Frequently asked questions
Which Asian country is easiest to employ in?
Singapore and Hong Kong: written terms are simple, probation is unregulated, overtime rules are limited, and termination on notice is lawful. Contributions are also low (Hong Kong) or moderate (Singapore).
Which is hardest?
For termination, Japan and Korea, where dismissal for performance is rarely upheld. For process, mainland China, where the written-contract deadline, enumerated dismissal grounds, city-level social insurance and labour-dispatch rules all have to be right. For cost, Indonesia’s severance formula surprises most first-time employers.
Can I put someone on a long probation to keep flexibility?
Only where the law allows. China caps probation by contract length, Indonesia at three months, the Philippines at six, Vietnam by role. In Japan and Korea a probationary employee still has meaningful protection against dismissal. Thailand’s customary 119-day probation exists to end contracts before severance accrues at 120 days — lawful, but candidates know what it means.
Does an EOR protect me from termination liability?
The EOR’s entity is the employer and carries the legal process and the primary liability. The cost of a lawful exit — notice, severance, a negotiated package — is passed through to you under the service agreement. What a good EOR saves you is the procedural error that turns a lawful dismissal into an unlawful one.
Ready to hire?
Our ranking of Asian EOR providers says which ones have in-country HR specialists who have run a termination in China or Korea before, and which leave it to a template.
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- Hong Kong Employment Ordinance (Cap. 57); Singapore Employment Act 1968 and Tripartite Guidelines on Wrongful Dismissal; PRC Labour Contract Law (2012) and Labour Law (1994, as amended 2018); Japan Labour Standards Act and Labour Contract Act (Art. 16), Work Style Reform Act 2018; Korea Labour Standards Act and Employee Retirement Benefit Security Act; India Industrial Disputes Act 1947, Payment of Gratuity Act 1972, Industrial Relations Code 2020; Indonesia Law 13/2003 as amended by Law 6/2023 and GR 35/2021; Philippines Labor Code (PD 442, as renumbered); Vietnam Labour Code 2019; Malaysia Employment Act 1955 (2022 amendments) and Industrial Relations Act 1967; Thailand Labour Protection Act B.E. 2541 (as amended 2019).