On the matters needing attention for enterprises to terminate employment contract
Author | Mu Qing Lawyer Team, Mu Qing, ***
Editing and Reviewing | ***
Introduction
The termination of labor relations is the most likely situation in which disputes arise with laborers in the operation and management of enterprises. Enterprises often lack perfect compliance rules and regulations, do not understand the laws of the termination of labor relations thoroughly, and do not retain the corresponding evidence in a timely and complete manner, resulting in compensation if the court finds that the illegal termination is required when the dispute occurs.
This article aims to resolve the frequent disputes by sorting out labor relations and summarizing and summarizing the main points of the judgment, so as to provide guidance for the legitimate compliance of enterprises in handling labor relations and safeguarding the legitimate rights and interests of employers and workers.
1. The employer has the right to terminate the employment contract if the worker illegally establishes a company in the same industry during the employment period
Cao joined an auto finance company on August 1, 2013, as a department manager. The "Employee Handbook" signed by Cao stipulates that no employee shall work part-time without the written approval of the company; otherwise, it is a serious violation of the company's rules and regulations, and the company has the right to immediately terminate the employee's employment contract.
In September 2020, an auto finance company discovered that between February 2017 and July 2020, Cao served as the executive director and legal representative of a company outside the case, and was a shareholder of the company at the time of its establishment. The company's business scope was similar to that of an auto finance company.
On November 23, 2020, an auto finance company terminated the employment contract with Cao on the grounds of serious violation of rules and regulations. Subsequently, Cao initiated labor arbitration and required an auto finance company to pay compensation for illegal termination of the employment contract.
The Arbitration Commission held that: the act of acting as a shareholder of his company is not a part-time act as stipulated in the Employee Handbook, and belongs to the act of company law rather than the part-time act of employment contract law, but this act is obviously more harmful to the company than ordinary part-time acts. An auto finance company is legally dissolved.
Article 39, paragraph 4 of the employment contract law of the People's Republic of China provides that the employer may terminate the employment contract if the employee has any of the following circumstances: the employee establishes labor relations with other employers at the same time, which has a serious impact on the completion of the work tasks of the unit, or refuses to make corrections upon the employer's request.
From the literal interpretation of this article, there is no express restriction on workers to establish new companies during their employment. However, returning to the original intention of the law, this article is to prevent workers from causing losses to employers due to multiple labor relationships. Therefore, the behavior of workers whether they are part-time or establishing a new company needs to not violate the company's rules and regulations and not seriously affect their own work to be a legal compliance.
In practice, it is usually difficult for the employer to detect the behavior of the worker deliberately concealing the employer's establishment of other companies or the establishment of labor relations with other employers. In this case, the employer may face management problems and risks such as the worker not completing his job as required, and the improper use of trade secrets.
Therefore, in order to better prevent laborers from affecting their own work due to multiple labor relationships or to prevent employers from suffering economic losses as a result, employers can improve rules and regulations to regulate the behavior of laborers establishing dual labor relationships in advance and affect their own work behavior.
2. The signature on the offboarding paperwork stub does not necessarily have the legal effect of waiving the corresponding rights
An employee left for personal reasons. On the same day, a company issued offboarding paperwork to the employee, and the employee signed the offboarding paperwork stub. The offboarding paperwork stub reads: "I confirm that the salary, bonus, overtime pay, financial compensation, etc. (if any) during my tenure have been settled; I waive any claims to the company and have received the offboarding paperwork on January 25, 2021.
"In March 2021, the employee requested to be paid overtime during the on-the-job period, but the company refused on the grounds that the employee had signed the offboarding paperwork stub, indicating that there was no dispute between the two parties on overtime pay and other aspects. The employee then filed a labor arbitration.
The Arbitration Commission held that: offboarding paperwork is a certificate issued by the employer to the worker when the employment contract is terminated or terminated, and its function is to prove the termination or termination of the employment contract between the worker and the original employer, which is conducive to the establishment of labor relations between the worker and the new employer.
The employee's signature on the offboarding paperwork stub only represents the receipt of the offboarding paperwork, and does not have the function of disciplinary action or waiver of civil rights. Therefore, the worker has the right to claim the difference in overtime pay and receive support according to law.
In practice, many employers think that the worker has signed for the receipt, indicating that the worker has no objection to the received payment, indicating that the worker has voluntarily waived the corresponding rights. Just as in the above case and the thinking of the referee, the employee's signing on the offboarding paperwork can only represent the receipt, and the worker can still claim rights on wages, economic compensation, etc.
Therefore, in order to better prevent the above-mentioned litigation risks between workers and employers after leaving their jobs, employers can sign a written agreement with employees when they leave their jobs, and make clear the settlement of normal working hours wages, overtime pay, and annual bonuses between the two parties.
3. The rules and regulations of the enterprise are obviously unreasonable, and the lifting of the system according to this is illegal
In practice, in order to more comprehensively manage the behavior of workers and protect the interests of enterprises, enterprises often make various provisions in rules and regulations. But the number of systems does not necessarily mean that the protection of enterprises is more comprehensive. Due to the lack of corresponding compliance awareness, many enterprises will have rules and regulations beyond the normal employment management when formulating rules and regulations, as some enterprises stipulate in the system: if the loan between workers exceeds a certain amount and is not approved by the enterprise, it is a major violation, and the enterprise can terminate the employment contract accordingly; if the worker has a physical conflict with others in the workplace, he will be fired regardless of whether the worker is at fault.
Due to the excessive expansion of the governance authority of the enterprise, in judicial practice, the court will find that the rules and regulations of the enterprise are obviously unreasonable, so the behavior of the enterprise to terminate the employment contract with the laborer according to the system is illegal.
4. The enterprise is relocated reasonably, and employees must not refuse
A company needs to relocate to a new factory about five kilometers away because the original factory site was repurchased by the local government. The company promises to provide commuting vehicles to employees, retain employees' original jobs and increase wages. Chen is an employee of the company. He believes that the company unilaterally asked him to work at the new factory site and closed the old factory without consensus with him, resulting in his inability to go to work normally. Therefore, he proposed to terminate the employment contract and asked the company to pay compensation.
After Chen went through labor arbitration, he sued the court. The court held that whether the relocation of the enterprise made the employment contract impossible to perform should be comprehensively judged based on factors such as the distance of the relocation of the enterprise and whether the enterprise provided convenience measures and adjusted commuting time. In this case, the employer has taken measures to reduce the impact of the relocation on the workers. If the relocation is not enough to cause the employment contract to fail to perform, and the worker claims economic compensation, the court will not support it.
In practice, a typical enterprise in the manufacturing industry will choose to move to a place with lower rental costs in order to control labor costs or due to policy factors. The relocation behavior that the enterprise needs to carry out for operation and management is the self-management right of the enterprise. In such cases, the more likely dispute is that the employee refuses to change the new working place, absenteeism or resignation, and claims financial compensation.
In this case, the employer should actively negotiate with the worker to clarify whether the relocation will bring about adjustments to the post and salary, and reasonably arrange the corresponding transportation, meal and other subsidies to minimize the impact of the relocation on the worker.
5. If the worker provides false resume, the employer may terminate the employment contract according to law
Liu joined a company in June 2017 to work in human resources. The "Employee Statement" signed by Liu on the day of employment stated: "All the documents I submitted about my work experience and educational status are true and correct". Article 8 of the "punishment system" formulated by a company stipulates that providing false personal information and supporting materials when hiring is considered a serious violation of the company's rules and regulations, and the company has the right to immediately terminate the employment contract.
In May 2020, a company investigated and confirmed that the employee registration form filled in by Liu when he was hired contained fictitious employment units, working years, positions, etc. After soliciting the opinions of the trade union, a company issued a notice to Liu to terminate the employment contract on May 28, 2020, and at the same time stated that "no financial compensation will be paid to Liu".
Subsequently, Liu applied for labor arbitration and asked a company to pay compensation for the illegal termination of the employment contract. The Arbitration Commission held that Article 19 of the Opinions of the Supreme People's Court of the Ministry of Human Resources and Social Security on Issues Related to the Connection of Labor and Personnel Dispute Arbitration and Litigation (1) stipulates that the employer violates the principle of good faith by providing false academic certificates, personal resumes, etc., which are directly related to the conclusion of the employment contract, which constitutes fraudulent termination of the employment contract. If the worker claims economic compensation or compensation for the termination of the employment contract, the labor and personnel dispute arbitration committee and the people's court will not support it.
Liu's act of providing false work resumes at the time of entry violated his commitment in the Employee Statement and the company's rules and regulations, as well as the duty of loyalty of the workers, so a company was legally terminated.
The act of providing false resumes by workers obviously violates the principle of good faith, but it does not mean that as long as the employee's resume has fictitious content, the employer can terminate the employment contract with the employee. In judicial practice, the court will comprehensively consider whether the false resumes of workers seriously affect their performance of work, whether it seriously affects the continued performance of the employment contract by both parties, whether it directly affects the employer's decision not to hire, and whether the employer has fulfilled the necessary review obligations on the resumes provided by employees.
As in the (2023) Beijing 02 Civil End No. 5681 court verdict, although the resume provided by the worker has fictitious content, the court considered that the worker has been working in the company for nearly a year, and the fictitious resume has not seriously affected the performance of the employment contract between the two parties, and it is not serious enough to immediately terminate the labor relationship.
In practice, it is difficult for employers to investigate whether the education, work experience, and family members provided by employees are true when recruiting employees. Therefore, in order to prevent employees from providing false resumes, it is difficult for employers to legally terminate employment contracts. It is recommended that employers improve rules and regulations, clarify that employees have the obligation to provide resumes honestly and clarify the punishment mechanism, and carry out corresponding background checks after workers enter the job.
6. The worker refused the work arrangement of the enterprise and was sentenced to illegal termination of the contract
Chen joined a technology company in Beijing in September 2022 to engage in research and development. The probation period agreed upon by the two parties is half a year, and the work location is Beijing. During the three months of employment, the company has arranged for Chen to work overtime many times. On December 28, 2022, the company once again arranged for Chen to travel to other places during New Year's Day to engage in equipment commissioning.
Chen refused the company's overtime request. On January 4, 2023, the company dismissed Chen on the grounds that he did not obey the work arrangement during the probation period. Later, Chen applied for arbitration and asked the company to pay compensation for illegal termination of the employment contract. The Arbitration Commission held that: If the employer wants to exercise the right of termination during the probation period, it must prove that the employee does not meet the employment conditions.
In this case, a Beijing technology company dismissed Chen for failing to obey the work arrangement, which obviously did not comply with the law, so Chen should be paid compensation for illegally terminating the employment contract.
In this case, the termination of the employment contract because the employer arranged for the worker to work overtime on statutory holidays and was refused was found to be illegal. But it does not mean that the employer cannot manage any refusal of the worker to work overtime. In the (2018) Jiminshen No. 4351 civil court verdict, the court supported the employer's act of arranging the employee to work overtime due to an emergency, the employee unreasonably refused, and the employer cancelled the employment contract.
The court held that: According to the provisions of the employment contract, the employer enjoys legal management and control over the workers. In the case of an emergency in the company's tasks, the employer arranges the workers to work overtime, and arranges the rest or pays overtime labor remuneration in accordance with the law and the employment contract. The worker fails to explain reasonable reasons to the leader and refuses to work overtime, which is indeed a serious violation of the company's rules and regulations.
The employer's termination of the employment contract with the laborer in accordance with the administrative regulations conforms to the employment contract signed by both parties.
conclusion
In the dispute over the dissolution of labor relations, the arbitration commission or the court is not biased to protect the employer or the worker unilaterally, but needs to consider whether the employer's dissolution is in legal compliance, whether there is sufficient evidence to complete the burden of proof, and whether the worker's behavior is worthy of legal protection.
Therefore, in order to reduce a series of adverse effects such as compensation due to the illegal termination of the employment contract by the employer, the employer should consult the advice of professional lawyers, formulate perfect compliance rules and regulations, and establish a compliance employment management system. Professional lawyers are by your side.
Mu Qing
Zhiheng Law Firm
Guangdong
is a practicing lawyer, deputy secretary-general of the Labor and Social Security Law Professional Committee of Guangdong Bar Association, member of the Financial Crime Defense Legal Professional Committee of Shenzhen Bar Association, enterprise human resource planning division (national second level), enterprise labor relations coordinator (national second level), enterprise legal risk manager, enterprise legal consultant Qualification, engaged in corporate compliance governance, company articles of association sorting, company control disputes, labor and employment compliance review, company mergers and acquisitions, due diligence, contract formulation and modification, commercial negotiation, debt disputes, criminal defense and other legal services.
***
Zhiheng Law Firm
Guangdong
intern lawyer, engaged in corporate compliance, equity disputes, debt disputes, marriage and family disputes, criminal defense and other legal services.
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