Case Review: 

Wang joined Company A on March 1, 2011, and the term of the labor contract between the two parties was from March 1, 2011 to February 28, 2016. On October 8, 2012, Company A issued an announcement on advising Wang to abide by the company's employment regulations (employment regulations have not been formulated by democratic procedures and have not been publicized). The announcement reads: In the past month, the company investigated Wang. For Wang, unauthorized departure from work occurred several times. In order to strengthen the company's labor discipline, starting from October 8, 2012, if Wang were to leave the post without authorization or refuse to sign the "Employee On-the-job Survey Form" for more than three times, it would be a serious violation of the company's employment rules and the company would dismiss him legally. The announcement was sent to Wang on the same day. After that, Wang continued to leave his post several times without authorization. On October 19, 2012, without notifying the labor union, Company A issued a notice of termination of the labor contract on the grounds that Wang had seriously violated the rules and regulations, and terminated the labor relationship with Wang. Wang applied for arbitration and litigation successively, demanding that Company A pay compensation. The court finally ruled that Company A had illegally terminated the labor contract and supported Wang's claim.

Lawyer's analysis: 

In fact, the laborer in this case also has certain faults, but in the end, the employer lost the case mainly because of its irregular and illegal management and operation of labor rules and regulations. First of all, Company A's employment rules and regulations have not been formulated through democratic procedures and have not been publicized. Article 4 of the "Labor Contract Law of the People's Republic of China" stipulates, "When an employer formulates, revises or decides on rules and regulations or major matters that directly involve the vital interests of workers, it shall discuss with the workers' congress or all workers and put forward plans and opinions. It shall be determined through equal consultation with trade unions or employee representatives.” Article 19 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases stipulates that “the employer shall, in accordance with the provisions of Article 4 of the Labor Law, formulate rules and regulations through democratic procedures. If it does not violate national laws, administrative regulations and policies, and has been publicized to workers, it can be used as the basis for the people's court to hear labor dispute cases. It is difficult for the employment rules and regulations to be used as the basis for the court hearings.

Moreover, Company A failed to fulfill its obligation to inform the labor union during the process of terminating the labor relationship with Wang according to the company's labor regulations. Article 43 of the "Labor Contract Law of the People's Republic of China" stipulates that "the employer shall notify the labor union of the reasons for unilateral termination of the labor contract. If the employer violates the provisions of laws, administrative regulations or the labor contract, the labor union has the right to request the employer to make corrections. The employer shall study the opinions of the trade union and notify the trade union in writing of the handling result.” Article 12 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (IV) stipulates that “an employer that has established a trade union organization shall be dismissed. The labor contract complies with the provisions of Articles 39 and 40 of the Labor Contract Law, and the employer must but notify the labor union in advance in accordance with the provisions of Article 43 of the Labor Contract Law." Accordingly, it is illegal for Company A to terminate the labor contract without notifying the labor union in advance, and should pay the compensation.

Legal advice

Here, Ru De lawyer reminds enterprise managers that:

First, the formulation of rules and regulations must be reasonable, legal, clear and specific. The labor law stipulates that if the laborer seriously violates labor discipline or the rules and regulations of the employer, the employer may terminate the labor contract. However, the law does not make detailed and specific provisions on what constitutes a "serious violation", which requires employers to define, quantify and refine when formulating rules and regulations.

Second, the rules and regulations should be publicized or informed, and the evidence should be preserved. According to Article 4 of the "Labor Contract Law", when an enterprise formulates and revises rules and regulations, whether they have gone through an equal consultation procedure, whether the content of the rules and regulations is legal, and whether it is publicized to employees, etc., will affect the enterprise's success or failure in labor dispute cases. After formulating rules and regulations, enterprises should take effective measures to publicize or inform workers, and be sure to keep records and keep relevant evidence, such as meeting minutes, discussions and processes when formulating and revising rules and regulations, and employees’ confirmation, employee handbook, records of company announcements, etc.

Third, an enterprise that has established a trade union shall notify the trade union in advance and keep the evidence for the termination of the labor relationship. Article 43 of the Labor Contract Law and Article 12 of the Judicial Interpretation of Labor Disputes (IV) clearly state the procedural obligation of the employer to notify the trade union in advance as a necessary condition for the employer to terminate the labor relationship legally. Therefore, the employer is not only obliged to prove that he/she has legal reasons for the termination of the labor relationship, but also has the obligation to prove that the procedures for the termination of the labor relationship conform to Article 43 of the Labor Contract Law. In other words, the employer has to provide evidence that the labor contract has been notified to the labor union.