The Judicial Judgment Rules of "Incompetent Work" Viewed from Xiaomi's Dismissal and Losing Case
Author | Intellectual Property Center, Lawyer Wang Qionghua
The Beijing No. 1 Intermediate People's Court upheld the original judgment of the first instance, and Xiaomi needs to continue to perform the employment contract with He. As a result, the case of "Xiaomi's dismissal of incompetent employees lost the final trial" rushed to the hot search list of Sina Weibo, and netizens launched a heated discussion on "last elimination" and "whether incompetence can be a reason for dismissal".
So does the "last elimination" system comply with the relevant provisions of the labor law? Can the employer use this as the basis for the worker's "incompetent" job position? If the worker is indeed incompetent, what can the employer do to avoid the risk of losing the lawsuit? Here, the author takes the "Xiaomi Dismissal of Incompetent Employees Final Case" as an example to sort out the adjudication rules on "incompetent work" in similar judicial cases for reference.
referee gist
According to the law, if an employee is incompetent, the employer shall train or transfer the employee. After training or transfer, if the employee is still incompetent, the employer may terminate the employment contract.
summary of the case
On May 27, 2019, Beijing Xiaomi Mobile Software Co., Ltd. (hereinafter referred to as "Xiaomi") signed an employment contract with He for the period from May 27, 2019 to May 31, 2022. In September 2020, He failed the performance appraisal test twice in a row, so Xiaomi formulated the "Performance Improvement Plan", which stipulated that if the performance improvement period appraisal fails to meet the standards, it will be regarded as incompetent after improvement, and the employee will voluntarily file a resignation application and terminate the employment contract with the company.
He signed and confirmed on September 2, 2020. On September 30, 2020, He failed to meet the standards, and Xiaomi issued a written "Notice of Termination of employment contract" to He on November 3, 2020, informing both parties that the termination of the employment contract on November 6, 2020 was a legal termination.
He filed an application for arbitration with the Beijing Haidian District Labor and Personnel Dispute Arbitration Commission on the grounds of requiring Xiaomi to continue to perform the employment contract. The Commission ruled in Beijing Haihai Labor Zhongzi [2021] No. 2848 Award: Xiaomi and He continued to perform the employment contract. Xiaomi refused to accept the arbitration award and filed a lawsuit with the Haidian District People's Court of Beijing. The Haidian District People's Court of Beijing ruled that Xiaomi and He continued to perform the employment contract.
Xiaomi Company refused to accept the civil judgment of Beijing Haidian District People's Court (2021) Beijing 0108 Minchu No. 33528 and appealed to the Beijing No. 1 Intermediate People's Court.
court decision
The Beijing No. 1 Intermediate People's Court rejected the appeal and upheld the original judgment.
Reason for referee
The court of first instance held that: according to the law, even if He is incompetent for the job, Xiaomi should also train or transfer He. After training or transfer, How is still incompetent for the job, and Xiaomi can terminate the employment contract. The "Performance Improvement Plan" signed by Xiaomi and He is obviously a work plan and goal formulated by the company, not training.
Although the "Performance Improvement Plan Feedback" submitted by Xiaomi showed that He's score was lower than the minimum requirements of the performance improvement plan, the above documents did not contain He's signature confirmation information, and Xiaomi did not provide the corresponding objective basis for the evaluation score. Therefore, the court rejected the authenticity and purpose of proof of the "Performance Improvement Plan Feedback", and further rejected Xiaomi's claim that He failed the performance appraisal test and was still incompetent after training.
The second-instance Court held that: Xiaomi invited He to enter the performance improvement plan for training because He was incompetent, but the "Performance Improvement Plan" signed by Xiaomi and He obviously belonged to the work plan and goals formulated by the company, not training. Xiaomi directly terminated the employment contract without training or job transfer to He, which constituted illegal termination.
Lawyer's Analysis
Legal conditions for termination of employment contract on the grounds of incompetence
According to Article 40, paragraph 2 of the employment contract law of the People's Republic of China, if a worker is incompetent for work, and after training or job adjustment, he is still incompetent for work, the employer may terminate the employment contract but must notify the worker in writing 30 days in advance or pay the worker an additional month's salary.
And according to this regulation, the termination of the employment contract on the grounds of incompetence needs to meet three conditions: (1) the worker is proved incompetent for the job; (2) after training or adjustment of the job; (3) still incompetent for the job. This shows that the employer has a triple burden of proof when dismissing the employee according to the performance mangement system.
1. Whether the worker is incompetent for the job, the employer shall bear the burden of proof.
In the civil case of first instance of the employment contract dispute between UPM Lantai Label (China) Co., Ltd. Tianjin Branch and Liu [ (2017) Jin 0112 Minchu No. 10392], the Tianjin Jinnan District People's Court held that the evidentiary performance/behavior improvement plan submitted by the plaintiff showed that the defendant's sales performance from January 3, 2017 to March 31, 2017 was not up to standard, the development of new customers was insufficient, the long-term payment was poor, and the work initiative needed to be strengthened. The form was signed and confirmed by the defendant.
At the same time, the defendant's salary table submitted by the plaintiff shows that the defendant's sales bonus was zero in August-December 2016 and February-June 2017. Later, the defendant participated in the business training of the plaintiff's company on May 26, 2017 and June 5-7, 2017. The defendant's sales bonus in July and August 20
17was zero.
The plaintiff believes that the above evidence can prove that the defendant is incompetent for the job and is still incompetent for the job after training. However, the salary schedule submitted by the plaintiff from January 2012 to December 2013 also shows that the defendant's sales bonus for January-March 2012, July-September 2012 and January-February 2013 was zero, and the plaintiff did not provide a reasonable explanation for this.
Combined with the performance and bonus details submitted by the plaintiff, the evaluation bonus incentive system and the sales bonus system, none of them can prove that the sales bonus is zero, which means that he is not competent for the job. Therefore, this court believes that the plaintiff failed to provide sufficient evidence to prove that Liu was still incompetent after training.
2. The employer believes that the worker is "incompetent for the job" and should be transferred or trained, and requires proof that there are two unqualified assessments, that is, "still incompetent for the job", and cannot directly terminate the employment contract.
In the second-instance civil case of Wuxi PetaByte Technology Co., Ltd. and Zhou's employment contract dispute [ (2021) Su 02 Minzhuan No. 2297], the People's Court of Xinwu District, Wuxi City, held in the civil judgment of (2020) Su 0214 Minchu No. 3158 that with regard to the validity of PetaByte's termination of the employment contract based on the two unqualified assessment systems, in this case, the meeting held on April 23, 2019, the participants were only Zhou, Lu, Tao, Hu, Pan, the scope of participation was small, the assessment standards were unclear, and the assessment results that should be kept by the administrative personnel department were not formed According to the content of the testimony, the meeting was an internal conversation to make suggestions and early warnings about the problems existing in Zhou's work, an informal performance appraisal, and no conclusion that he was incompetent or failed the assessment.
At the end of 2019, Zhou failed the assessment and was incompetent for the job. Even if the assessment was established, it still could not meet the requirements of failing the two assessments to terminate the employment contract. Moreover, the assessment system involves the vital interests and major matters of workers, and there are requirements for formulating procedures and content. The assessment method implemented at the end of December 20
19also has flaws in its effectiveness.
In addition, in the no-fault dismissal stipulated in the "employment contract law" of our country, the worker is not competent for the job, and the employer can terminate the employment contract by written notice 30 days in advance.
PetaByte did not follow the above procedures. In summary, PetaByte illegally terminated the employment contract with Zhou.
The Intermediate People's Court of Wuxi City, Jiangsu Province held that PetaByte's termination of the employment contract on the grounds that Zhou failed the two assessments and was incompetent was based on insufficient evidence and there was no training or job adjustment procedure to prove that Zhou was still incompetent. Therefore, PetaByte's termination was illegal.
II.Precautions for enterprises to formulate rules and regulations and assessment standards
Labor legislation not only protects the rights and interests of laborers, but also grants enterprises autonomy in employment. Enterprises can formulate various management rules and regulations including labor discipline, salary and benefits, assessment, and promotion in accordance with the law to ensure the normal operation of enterprises[1]When formulating rules and regulations, enterprises should combine with legal provisions, and combine specific and meticulous job requirements with the actual labor and personnel of the enterprise through the design of specific post settings, professional literacy, subjective and objective requirements, etc., to better manage and guide employees in their own jobs.
1. Enterprises should pay attention to the following points when formulating rules and regulations:
First and foremost, it is necessary to comply with legal requirements.
Rules and regulations are detailed provisions on unspecified matters already stipulated by law, and are extensions and refinements of laws and regulations. For example, serious violations of enterprise rules and regulations, standards for significant damage, standards for incompetence for work, employment conditions, etc. The content of rules and regulations cannot violate legal provisions and infringe on the legitimate rights and interests of workers.
For example, the rules and regulations stipulate that "executive overtime units do not need to pay overtime pay," which is invalid because it violates the provisions of the employment contract law.
Secondly, it must be fair and reasonable.
That is, when formulating rules and regulations, a series of situations such as the characteristics, responsibilities, work content, and employee performance of each position should be considered, and common sense systems should be formulated according to specific circumstances to restrain employee behavior. Fair and reasonable rules and regulations can not only regulate the management of employees by the employing unit, but also mobilize the enthusiasm of employees.
Finally, it is necessary to comply with legal procedures.
According to the second paragraph of Article 4 of the employment contract law: "When an employer formulates, modifies or decides on rules and regulations or major matters that directly affect the vital interests of workers, such as labor remuneration, working hours, rest and vacation, labor safety and health, insurance and benefits, employee training, labor discipline, and labor quota management, it shall be discussed by the workers' congress or all employees, put forward plans and opinions, and determine them through equal consultation with the trade union or employee representatives.
"That is, it must go through democratic procedures. According to the provisions of Article 4, paragraph 3:" Employers shall make public the rules, regulations and major decisions that directly affect the vital interests of workers, or inform workers. "That is, it must go through public procedures.
It can be seen that regulations and major issues that directly affect the vital interests of workers must go through democratic procedures and publicity procedures. Without any procedures, their effectiveness will not be recognized.
2. Enterprises should pay attention to the following points in the process of formulating and implementing assessment standards:
First, the assessment criteria should be determined according to the business plan, job responsibilities and employee capabilities. The enterprise should formulate a comprehensive description of job responsibilities, and the assessment standards formulated by the employer should be based on job responsibilities, and the requirements for all aspects of employees should be refined in combination with performance objectives. Enterprises can agree with workers that the performance appraisal evaluation results are unqualified as one of the situations of "incompetent work", and the process of enterprise performance appraisal and evaluation is also a process of proving that workers can do the job.
Secondly, the assessment standards should be fully communicated with employees, clearly informed to workers, clearly informed of the legal consequences of not meeting the assessment standards, and require employees to confirm. In labor dispute cases, enterprises have a greater burden of proof, so enterprises should hand over relevant written documents to employees to sign to confirm that they are aware.
Finally, the assessment criteria should be clear, detailed and actionable. The assessment criteria set by the enterprise should be easy for employees to understand, easy for the unit to assess, and can specify specific tasks and quantitative and quality requirements. It should also be clear and clear to avoid ambiguity, otherwise it will be difficult to operate effectively when evaluating employees.
III.Rules for the determination of incompetence
In judicial practice, the proof of assessment and evaluation requires quantification, refinement, and externalization. Quantitative analysis of the completion of work tasks is easier to become the basis for judging whether it is incompetent, while subjective evaluation that cannot be quantified is difficult to be adopted by the judicial department; evaluation of whether specific work tasks are completed is easier to be recognized by the judicial department, and general evaluation of employee work conditions is harder to be accepted by the judicial department; customer opinions can be used as the basis for judging whether it is incompetent; while the evaluation of superiors to subordinates is difficult to be adopted by the judicial department.
1. The worker is ranked last in the employer's grade assessment, which is not equivalent to "incompetent for work" and does not meet the legal conditions for unilaterally terminating the employment contract. The employer cannot unilaterally terminate the employment contract accordingly.
The last elimination system is a management method that enterprises often adopt in practice. Its purpose is to motivate and stimulate employees to achieve the corresponding specific performance as much as possible. Enterprises often set certain performance appraisal system indicators according to their own overall plan and the specific goals of each department, combined with the actual situation of each position, and use this indicator system as a standard to evaluate the work performance of employees over a period of time, and eliminate lagging employees according to the assessment results.
The last elimination system has positive significance for improving employees' work efficiency and stimulating their work potential, but even if the "last elimination system" is agreed in the employment contract, it does not meet the provisions of our country's employment contract law[2]For example, in the case of ZTE (Hangzhou) Co., Ltd. v. Wang for employment contract disputes [ (2011) Hangbin Minchu Zi No. 885], the Hangzhou Binjiang District People's Court pointed out that in order to protect the legitimate rights and interests of workers and build and develop a harmonious and stable labor relationship, the "Labor Law of the People's Republic of China" and the "Employment Contract Law of the People's Republic of China" clearly limit the conditions for the employer to unilaterally terminate the employment contract.
The plaintiff ZTE shall bear the burden of proof for the termination of the employment contract on the grounds that the defendant Wang is incompetent for the job and is still incompetent after the transfer. According to the provisions of the "Employee performance mangement measures", "the proportion of C (C1, C2) assessment level is 10%". Although Wang once had an assessment result of C2, the C2 level is not completely equivalent to "incompetent for the job". ZTE only relies on the assessment results of the limited assessment level ratio to prove that the worker is incompetent for the job and does not meet the legal conditions for unilaterally terminating the employment contract.
In addition, Wang transferred from the distribution department, engaged in sales work before and after the transfer, and there is a fundamental reason why the dissolution of the distribution department led to Wang's transfer, so it cannot be proved that Wang was transferred because he was incompetent. Therefore, ZTE claims that Wang is incompetent for the job and is still incompetent for the job after the transfer is insufficient, and there is a situation of illegal termination of the employment contract.
2. Transfers made because the worker is "incompetent for the job" should be reasonable.
Unilateral job transfer must be reasonable, that is, the post before and after the adjustment should have a certain relationship and be compatible with the labor ability, profession and skills of the laborer. Otherwise, the employer's job transfer behavior will be considered unreasonable and bear the consequences of losing the lawsuit. If the post level and salary difference before and after the adjustment is large, it should try to negotiate with the employee to avoid the legal risk of unilateral job transfer being invalid.
In the case of Beijing International Art Garden Co., Ltd. and Zhu's labor dispute [ (2021) Beijing 02 Minxing No. 1910], Art Garden Company held that Zhu did not bear the management results, did not sign the target management responsibility letter, did not accept the assessment, was incompetent for the job, refused to accept the transfer but submitted the meeting recording materials and other evidence. It can be seen that Zhu did not agree to sign the target management responsibility letter, which is an objection to the content of the target management responsibility letter.
The court held that although Yiyuan Company can arrange work and clarify responsibilities for Zhu, major changes to the content of the employment contract between the two parties, and unfavorable changes to Zhu, should be fully negotiated by both parties. Zhu's objection is a reasonable concern about his own labor rights and obligations. When the factors such as how to formulate the monthly work plan and how to evaluate it are not clear, and Yiyuan Company has not made a full and reasonable explanation, Yiyuan Company directly demoted Zhu on the grounds that Zhu did not obey the work arrangement and did not accept the performance and obligations of work duties, it was obviously improper.
Yiyuan Company maintained that Zhu was incompetent for the job, the evidence was not sufficient, and the degree of demotion and salary reduction was large, so the transfer behavior was not reasonable.
3. "Incompetent for work" refers to the inability to complete the tasks agreed in the employment contract as required or the workload of the same type of work and the same position.
In the civil case of labor dispute retrial of Zhang and Tenglong Aromatic Hydrocarbons (Zhangzhou) Co., Ltd. [ (2016) Minmin Zai No. 335], the Higher People's Court of Fujian Province pointed out that "incompetent work" refers to the inability to complete the tasks stipulated in the employment contract as required or the workload of the same type of work and the same position.
When a worker does not have the ability to perform a certain job and cannot complete the work tasks of a certain position, the employer can provide vocational training to him, improve his class skills, or transfer him to a competent job position. This is the employer's obligation to assist the worker in adapting to the position.
If the employer fulfills these obligations and the worker is still incompetent, it indicates that the worker does not have the professional ability to work at the employer. The evidence used by Tenglong Company in the original trial to prove that Zhang was still incompetent after adjusting his job position was only the "Evaluation Opinions on Zhang's Material Management Work" signed by Yan and Gao on March 10, 2014, stating that Zhang was transferred from the Electrical Affairs Division to the Materials Division on March 18, 2013 to engage in material management work. Due to his physical health, he was unable to perform seven aspects of material management work, including: unable to use the material transceiver and storage SAP operating system normally; without a forklift driver's license, unable to use a forklift to load and unload warehouse materials, handling work, etc.
Zhang believes that the evidence is untrue. Because Gao and Yan did not testify in court, Tenglong Company has no other evidence to prove that the above content is true, and it is correct that both First and second-instance dismiss the evidence. Moreover, Zhang was originally engaged in electrical management work, and may not be suitable when adjusting to the material management position after illness. Tenglong Company should arrange for Zhang to undergo certain training to help him adapt to the new position.
In the original trial, Tenglong Company did not provide evidence that it arranged for Zhang to conduct relevant material management pre-job training. The court asked him to provide additional information within a certain period of time, but Tenglong Company still did not provide it. Tenglong Company did not prove that it had arranged work "within its ability" for Zhang, nor did it prove that it had arranged for Zhang to conduct material management-related pre-job training.
Therefore, it cannot be determined that Zhang "cannot engage in work arranged by the employer," nor can it be determined that Zhang "has been trained or adjusted to the job position, and is still incompetent for the job."
Note:
[1] Wang Huayu: Employment Contract Law Practice Operation and Case Explanation (Updated 7th Edition), China Legal Press, 2017-09, Chapter 2.
[2] Article 13 of the Implementing Regulations of the Employment Contract Law of the People's Republic of China: "Employers and workers shall not agree on other conditions for the termination of employment contracts than those stipulated in Article 44 of the Employment Contract Law."
Lawyer Profile
Wang Qionghua, Lawyer
, Partner Lawyer
Secretary General, Copyright Law Professional Committee of Shenzhen Law Association
Secretary General of Zhiheng Intellectual Property Center, Deputy Director of Copyright Committee
Areas of expertise:
Intellectual property (criminal-civil cross), corporate compliance
Corporate legal counsel, civil and commercial dispute resolution
Publication representative:
"Long'an Lawyers Interpretation of the Civil Code" Contract Compilation
"Internet Law Course"
"Evaluation on Typical Cases of People's Mediation in Futian District, Shenzhen"
Contact information:
Center Profile
Intellectual Property Center
Objective of Zhiheng Intellectual Property Center: To build a first-class intellectual property legal service center.
The Intellectual Property Center has a complete set of specialized intellectual property departments such as patents, trademarks, copyrights, trade secrets, rights protection, international, layout analysis, and operation transactions, forming a complete industrial chain from basic applications, planning and layout, risk prevention and control, anti-counterfeiting rights protection, operation transactions, and international protection.
The Intellectual Property Center is led by a team of first-class intellectual property experts, with a complete service process and an integrated service system. It provides professional legal advice and solutions in various fields of global intellectual property, striving to ensure that every case and project can receive the best solutions developed by experts, so that customers can experience the most rigorous and professional services.
This article and its content are shared by Zhiheng lawyers, for communication purposes only, and do not represent the legal opinions, suggestions or decision-making basis issued by the law firm or lawyers. If you need legal advice or legal professional analysis, please contact the professional lawyers of
, or leave your contact information in a private message WeChat official account. If you need to reprint this article, please contact the official account editor in the background.