Employer Ordered to Pay 27 Yuan in Wrongful Termination Case as Labor Court Ruling Overturned

Employment termination disputes frequently involve competing claims about the circumstances and legitimacy of the separation. When an employer terminates an employee and the employee contests the validity of that termination, courts must carefully examine the evidence to determine whether the employer's stated grounds constitute lawful cause for dismissal. A recent Shaoxing court ruling addressed exactly this scenario—initially upholding a labor arbitration award before independently recalculating the compensation amount owed.

The dispute originated from the termination of Mr. Huang by a Shaoxing trading company in September 2011. The company claimed the employee had violated workplace rules by refusing to follow management directives and conducting personal business activities during working hours. Based on these allegations, the employer issued termination notice and processed the employee's departure. Mr. Huang challenged the termination through the labor dispute arbitration system, arguing that the stated grounds did not constitute legitimate cause for dismissal.

The arbitration panel ruled in Mr. Huang's favor, determining that the termination was unlawful and ordering the employer to pay compensation of 1,223.49 yuan—representing two times the standard severance amount for the employee's tenure period. Dissatisfied with this outcome, the employer filed suit in the district court seeking to overturn the arbitration decision.

At trial, the court examined the evidence presented by both parties. The employer bore the burden of proving that the termination satisfied legal requirements for termination of employment contracts. The court found that the employer had failed to present sufficient evidence demonstrating that Mr. Huang had actually engaged in the alleged rule violations with the severity claimed. No surveillance records, witness statements, or other corroborating materials were offered to substantiate the workplace misconduct allegations. The employer's failure to meet this evidentiary burden meant the termination was deemed unlawful under labor law standards.

Regarding the appropriate remedy, the court considered that Mr. Huang had elected to pursue monetary compensation rather than reinstatement during the arbitration proceedings. Given that he had physically departed the company following the termination and had not returned to work, the court determined that continuing the employment relationship was not practicable. Accordingly, the court upheld the finding of wrongful termination but proceeded to independently calculate the compensation amount.

The court recalculated the severance based on the employee's average monthly earnings during his employment period, applying the double severance formula prescribed for unlawful terminations. This recalculation produced a base compensation figure of 2,107.97 yuan. From this amount, the court deducted the economic compensation of 931.88 yuan that the employer had already paid, as well as an overpayment of 1,148.98 yuan that the employer had inadvertently included in the September salary. The net amount ordered to be paid was 27.11 yuan.

Mr. Huang's additional claims for ongoing wages, social insurance contributions, meal allowances, and high-temperature subsidies following his departure date were dismissed as lacking legal basis, given that he had not performed any work for the employer after the termination date. The high-temperature allowance claim was also rejected on its merits.

Court costs were assessed against the employer as the unsuccessful party. Both parties were informed of their right to appeal to the provincial intermediate court within fifteen days of receiving the written decision. The case illustrates the burden of proof employers face when defending terminations and the recalculation methodology courts apply when assessing compensation awards.

Disclaimer: This article presents a summarized account of a civil court ruling for educational and informational purposes only. It does not constitute legal advice, and individuals facing similar circumstances should consult a qualified attorney licensed in their jurisdiction for guidance specific to their situation.