Under the Labor Contract Law of the People's Republic of China, a labor contract must include the following clauses:

> The name, address and legal representative or principal person in charge of the employer;

> The employee's name, address and ID card or other valid identification number;

> Contract duration;

> Job duties and work location;

> Working hours, rest and leave;

> Pay;

> Social insurance;

> Labor protection, working conditions and protection against occupational hazards;

> Other matters required by laws and regulations to be included in the labor contract.

A letter of appointment commonly only specifies the position being offered and omits key provisions such as contract duration, job responsibilities and pay. As such, it does not meet the formal requirements of a labor contract.

Furthermore, under legal provisions, a labor contract becomes effective only when the employer and employee have reached mutual agreement and both have signed or affixed their seal to the contract.

The formation of a labor contract generally involves two stages: An offer and an acceptance. When an employer unilaterally issues a letter of appointment, it falls under the "offer" stage – a proposal from the employer to the employee. Since the employee has neither signed nor sealed the document, no acceptance has occurred. As a result, it is difficult to confirm whether both parties have reached mutual agreement or intend to fulfill the terms of the appointment. Therefore, the letter of appointment does not carry the legal effect of a labor contract.

According to the law, if an employer fails to sign a written labor contract with an employee within one month to less than one year from the employment start date, the employer must pay the employee double the monthly wage for month missed. Clearly, failing to sign a written labor contract leads to financial losses for the employer and poses a risk for the employee, as their rights may not be adequately protected. This situation harms both parties.

Source: Official WeChat account of the Shanghai Municipal Bureau of Human Resources and Social Security