Court Orders Employer to Pay CNY 7,200 for Wrongful Termination
A daily chemical company in Eastern China City was ordered by the court to pay CNY 7,200 in compensation to a former employee after it failed to prove the employee had committed serious misconduct. The company had terminated the employee’s contract early and disputed an earlier arbitration award that required it to pay the compensation. The court also instructed the company to back-pay social insurance contributions for a period of nearly three years.
The employee, Ms. Zhang, began working as an office clerk for the company in October 2007. Her monthly salary started at CNY 1,200 and later increased to CNY 1,800, which the company claimed included overtime pay. Although no written contract was signed initially, a one-year contract was executed in October 2010. The company began paying social insurance for Ms. Zhang only from that month. In July 2011, the company telephoned Ms. Zhang to inform her of the termination, and on August 8, 2011, it issued a formal termination certificate citing “serious violation of company rules.” Ms. Zhang then applied for arbitration, seeking unpaid double wages for the period without a contract, compensation for wrongful dismissal, and back payment of social insurance.
During the court hearing, both parties presented their arguments and evidence. The company argued that Ms. Zhang had frequently been late, left early, and been absent without leave, and that her negligence in handling workers’ compensation insurance payments caused a loss of CNY 15,920. It claimed the termination was lawful. Ms. Zhang maintained that the dismissal was unlawful because the company neither gave 30 days’ written notice nor paid one month’s salary in lieu, as required by law. The evidence included an arbitration award, the employment contract, a written commitment letter, and the termination certificate. The court reviewed all materials.
The court found that the company had not provided sufficient evidence to prove Ms. Zhang’s alleged serious misconduct. Because the employment contract had not expired and the company failed to show just cause, the termination was improper. The court therefore upheld the arbitration award’s order to pay CNY 7,200 as economic compensation, calculated as four months’ salary at CNY 1,800 per month. Additionally, the court ruled that the company must retroactively pay social insurance for Ms. Zhang from October 2007 to September 2010, with the employee covering her own portion of the contributions.
Under Chinese labor law, an employer bears the burden of proof when dismissing an employee for serious misconduct. The company did not meet this burden. The court also noted that even if an employer has grounds to terminate without notice under Article 40 of the Labor Contract Law, it must either give 30 days’ written notice or pay one month’s salary in advance. Regarding social insurance, the law requires employers to enroll workers from the start of employment. The company’s three-year delay violated this obligation.
This case serves as a reminder that employers must follow proper procedures and maintain clear documentation when terminating employees. Claims of misconduct must be supported by concrete evidence. Otherwise, the employer may be liable for compensation and back social insurance payments. The ruling reinforces the principle that employment contracts cannot be unilaterally broken without lawful cause.
Disclaimer: This article is for informational purposes only and does not constitute legal advice.