What does it mean to buy out seniority?

Buy-out length of service refers to the method by which some state-owned enterprises in China placed surplus personnel in the process of reform in the early days of reform and opening up, that is, according to the working years, salary levels and jobs of employees, combined with the actual situation of enterprises. After consultation between the enterprise and the employees, it shall be reported to the relevant departments for approval, and the enterprise shall pay a certain amount to the employees at one time to terminate the labor relationship between the enterprise and the remaining employees and push the employees to the society.

The Labor Law stipulates: "A labor contract shall be concluded when establishing labor relations" (Article 16); "Employers and workers must participate in social insurance and pay social insurance premiums according to law" (Article 72).

If the company terminates the labor relationship with its employees, even if the employees can't get re-employment quickly, they can enjoy social security benefits such as unemployment insurance, endowment insurance and medical insurance, and there is no problem of employees leaving their jobs. No one in charge of the unit, there is no need to buy out the length of service.

The extended information "Notice on Implementing Two Regulations, Expanding Social Insurance Coverage and Strengthening Fund Collection" stipulates: "No unit may terminate the social insurance relationship of employees by means of' buyout service'."

The Notice on the Opinions on the Sale of Small State-owned Enterprises also emphasizes: "In order to ensure that the legitimate rights and interests of employees are not infringed, the seller shall solicit the opinions of employees on the sale plan and employee placement before applying for the sale.

No department or unit may terminate the social insurance relationship of employees during the sale of enterprises, and may not use the opportunity of sale to' buy out' the length of service of employees or handle early retirement for employees to push employees to the society in violation of relevant state regulations.

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