Labor disputes

  • Civil and commercial disputes
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  • Labor disputes
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  • Source: Labor Law Library (ID: Laodongfaku)


    Wang Xiaozhen is an employee of Shanghai Sihe Company and joined the company on October 2002, 10.


    Since the second half of 2018, Wang Xiaozhen has been seriously warned three times by the company for refusing to participate in the training arranged by the company, privately quoting low prices to customers, and privately arranging outsourcing to convert the company's products.


    On January 2019, 1, the company issued a "Warning and Dismissal Letter" to Wang Xiaozhen in accordance with the Employee Handbook, and decided to terminate the employment contract with Wang Xiaozhen on the grounds that Wang Xiaozhen received three serious warning sanctions.


    Wang Xiaozhen applied for arbitration and demanded that the company pay compensation for illegally terminating the labor contract.


    The arbitration commission ordered the company to pay 609624 yuan in compensation for illegal termination of labor relations.


    The company was not satisfied and filed a lawsuit.


    First-instance judgment: The "Employee Handbook" failed to perform the democratic procedures and notification procedures, and the violation was terminated, and compensation of 760377,75.<> yuan was paid


    The court of first instance held that the focus of the dispute in this case was whether the company illegally terminated its employment contract with Wang Xiaozhen. The company had clearly informed Wang Xiaozhen of the reasons for termination in the "Warning and Retainer Letter", so the court of first instance used this as the reason for the company's termination of Wang Xiaozhen's employment contract and conducted a review.


    In the process of establishing a labor relationship with an employee, the employer should first inform the employee of the company's rules and regulations in terms of procedure, and then manage the employee in accordance with the rules and regulations in substance. The formulation and application of rules and regulations should also follow the corresponding legal procedures, democratic procedures should be carried out when formulating, and notification procedures should also be performed after enactment. On the basis of failing to comply with the corresponding democratic procedures, any decision made by the employer against the employee based on the company's unilateral regulations is not in line with procedural justice and the decision is meaningless.


    In this case, although the company provided the Employee Handbook and imposed relevant penalties on Wang Xiaozhen in accordance with the provisions of the Employee Handbook, the company did not provide evidence to prove that the Employee Handbook had gone through democratic procedures, nor did it provide evidence to prove that the Employee Handbook had been delivered to Wang Xiaozhen, and Wang Xiaozhen was aware of the relevant regulations, so the company's termination of the labor contract against Wang Xiaozhen on the grounds that Wang Xiaozhen violated the rules and regulations of the Company's Employee Handbook did not comply with the law.


    In this case, Wang Xiaozhen has many flaws in her usual work, which should be taken as a warning and scrupulously fulfill her duties in her future work.


    In summary, the company should pay Wang Xiaozhen 760377,75.<> yuan in compensation for illegally terminating the labor contract.


    The company was not satisfied and appealed.


    During the second instance, the company provided new evidence to prove that Wang Xiaozhen violated the non-competition, loyalty obligation and the principle of good faith by opening a company outside the country and operating similar businesses during his tenure, so he could terminate the labor relationship in accordance with the corresponding provisions of the labor contract and the relevant provisions of the Labor Contract Law.


    Second instance judgment: Once the reasons for dismissal are determined, they are in a static state, and no additional reasons for dismissal may be added


    The court of second instance held that the establishment and improvement of labor rules and regulations by employers belongs to the scope of enterprise autonomy, but because employers often take profit maximization as their ultimate goal, saving costs in all aspects and expanding trading space are their inevitable measures, while employees are in the position of employees, their own strength is weak, their awareness of rights protection is low, and they are subject to economic factors, so it is difficult to fully protect their own interests when facing employers to formulate or change rules and regulations.


    Therefore, the Labor Contract Law clearly stipulates that when formulating, amending or deciding on rules and regulations or major matters directly involving the vital interests of workers, such as labor remuneration, working hours, rest and vacation, insurance and welfare, etc., they shall be discussed by the staff representative assembly or all employees, plans and opinions shall be put forward, and determined through equal consultation with the trade union or employee representatives.


    The court held that the company failed to provide evidence to prove that the Employee Handbook was formulated through democratic procedures, and although it provided a photo of the paper version of the Employee Handbook placed on the bulletin board in the first instance, indicating that employees could read it by themselves, they could not show the original carrier of the photo, could not show the time of shooting, etc., and Wang Xiaozhen did not accept this, so it was difficult for the court to accept the company's claim that the Employee Handbook had been publicized or delivered to Wang Xiaozhen.


    In the second instance, the company claimed that its termination of the labor relationship with Wang Xiaozhen was based not only on the Employee Handbook, but also on the labor contract, other rules and regulations of the company and relevant provisions of labor laws.


    The court held that the company issued a "Warning and Dismissal Letter" in accordance with the relevant provisions of the Employee Handbook on the handling of disciplinary violations, and terminated the labor relationship between the two parties on the grounds that Wang Xiaozhen received three serious warning sanctions, and the three serious warning sanctions were respectively aimed at Wang Xiaozhen's following behaviors: refusing to participate in the training arranged by the company, privately quoting low prices to customers, and privately arranging outsourcing to convert the company's products. At present, the company also claims that Wang Xiaozhen set up a company outside the country during his tenure and operated similar businesses, which violated the non-competition, loyalty obligation and the principle of good faith, so the labor relationship can be terminated in accordance with the corresponding provisions of the labor contract and the relevant provisions of the labor contract law.


    In this regard, the court held that once the reasons for dismissal of the employee on the basis of which the employer had been determined were determined, the dispute caused by the employee's violation of discipline would remain static, and the company would not accept the lack of basis for adding the reasons for the termination on the grounds that Wang Xiaozhen had set up a company outside to operate a similar business.


    In summary, the Employee Handbook cannot be the institutional basis for the company's termination, and the company's termination procedure is illegal first, which constitutes illegal termination of the labor contract. For Wang Xiaozhen, the outcome of this case does not represent recognition of her corresponding behavior, and Wang Xiaozhen should reflect on herself, learn lessons from the handling of this case, and fulfill her duties.


    The judgment of the second instance was as follows: the appeal was dismissed and the original judgment was affirmed.


    The company was not satisfied and applied to the Shanghai High Court for a retrial.

    The High Court ruled that the company failed to provide evidence to prove that the Employee Handbook had been released from the law through democratic procedures and publicity. The company cannot arbitrarily add the cause of termination after the fact


    After review, the High Court held that in this case, the company issued a "warning and dismissal letter" to terminate the employment relationship between the two parties on the grounds that Wang Xiaozhen received three serious warning sanctions. According to the company's explanation in the first-instance trial, the basis for the three serious warning sanctions was derived from the relevant provisions of the Employee Handbook on disciplinary violations. According to the law, the labor rules and regulations formulated by the employer involving the vital interests of employees shall be discussed by the employee representative assembly or discussed by all employees, and negotiated with the labor union or employee representatives on an equal footing; and shall inform employees by publicity or delivery.


    The company failed to provide evidence to prove that its Employee Handbook had been formulated through the above procedures and publicized or served to Wang Xiaozhen, and the original trial found that the Employee Handbook could not be the institutional basis for the Company to terminate the labor contract, so the termination was illegal, and the determination was not improper.


    In the first and second instance, the company also proposed that its termination of labor relationship was also based on Wang Xiaozhen's violation of non-competition, loyalty obligations and good faith by setting up a company outside the country to operate similar businesses, taking into account the reasons for the termination of the labor relationship on the basis of which the employer was based, once it was made and determined, the labor dispute would revolve around whether the cause was legal and justified, and it could not arbitrarily add the cause of termination afterwards to explain the legality of the termination at that time. The determination is lawful and substantiated.


    In summary, the High Court ruled as follows: The company's application for retrial was rejected.


    Case No.: (2021) Humin Shen No. 260 (The party is a pseudonym


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