Court Rules Employer Must Pay Long-Term Worker Over 11,000 Yuan in Severance for Wrongful Dismissal

Court Rules Employer Must Pay Long-Term Worker Over 11,000 Yuan in Severance for Wrongful Dismissal

Case Overview
In a dispute over severance pay, a court in Eastern China ruled that an employer must compensate a worker for over nine years of service. The court found the company failed to prove the employee’s shorter tenure and ordered payment of 11,270.70 yuan in economic compensation plus unpaid wages. The case highlights employer burdens of proof in labor disputes.

Case Background and Facts
The plaintiff, a chemical company in Eastern China, employed the defendant, Ms. Chen, as a worker. The company claimed Ms. Chen started work on May 22, 2010, and left on October 1, 2010, totaling only five months of service. The company argued it terminated the employment relationship on November 22, 2010, without completing formal termination procedures. It sought to pay severance based on half a month’s salary, calculated at 626.15 yuan.

Ms. Chen countered that she began working for the company on August 20, 2001. She acknowledged taking a three-month approved leave in 2005, maintaining that the employment relationship continued throughout. She asserted that the company’s inability to sustain operations forced her to stop working, leading to the November 22, 2010 termination. She demanded severance based on nine years of service, totaling 11,270.70 yuan as previously awarded by the local arbitration commission.

Court Proceedings and Evidence
The company submitted 14 photocopied attendance sheets from 2010 to prove Ms. Chen worked only five months. It argued the records showed she left on March 11, 2010. Ms. Chen admitted the documents were genuine but challenged their relevance. She pointed out the same records showed her attendance as early as January 2010, contradicting the company’s claim she started in May 2010. She explained she took approved leave on March 11, 2010, and returned to work on May 22, 2010.

The company responded that Ms. Chen left voluntarily on March 11, 2010, without any formal resignation procedures. Ms. Chen presented no evidence of her own. The court obtained the arbitration case file, including the application, hearing transcript, evidence, notice, and award. Both parties accepted these documents without objection.

The court noted that on November 3, 2010, the parties signed an agreement stipulating the company would decide by November 22, 2010, whether to continue operations. If it failed to decide or decided to close, employees would receive severance under the law, and the company would arrange pre-departure health checks. Ms. Chen filed for arbitration on November 10, 2010, seeking November wages, severance, and health examination costs. The arbitration commission awarded her 733.33 yuan in wages, 11,270.70 yuan in severance, and ordered the company to arrange and pay for a pre-departure health check. The company challenged this award in court.

Court Findings and Judgment
The court held that under relevant law, the employer bears the burden of proof in disputes over an employee’s length of service. The company failed to provide sufficient evidence to support its claim that Ms. Chen worked only five months. The court therefore accepted Ms. Chen’s assertion that she started on August 20, 2001, and worked until November 22, 2010, a total of nine years, three months, and two days. Both parties confirmed the termination date.

Because the parties mutually agreed to end the employment, the company must pay severance. The court calculated the severance based on the agreed average monthly wage of 1,252.30 yuan for the twelve months before termination. For nine years and three months of service, the statutory formula yields 9.5 months of wages, totaling 11,896.85 yuan. Since Ms. Chen accepted the arbitration award of 11,270.70 yuan, which is less than the calculated amount, the court confirmed that figure. The company also agreed to pay the November wages of 733.33 yuan and arrange the health check, which the court affirmed.

The court ordered the company to pay 733.33 yuan in wages and 11,270.70 yuan in severance, and to arrange and pay for a pre-departure health examination, all within ten days of the judgment. It dismissed the company’s claim to reduce severance.

Key Legal Principles
The court applied the principle that employers bear the burden of proof regarding an employee’s length of service. When an employer cannot substantiate its claim of a shorter tenure, the court accepts the employee’s version. The case also confirms that when parties mutually agree to terminate employment, the employer must pay severance based on the employee’s actual years of service, calculated as one month’s wages per full year of work, with partial years exceeding six months counting as a full year.

Practical Insights
This case serves as a clear reminder that employers must maintain accurate and comprehensive employment records. A company that fails to document an employee’s start date, leave periods, or termination details risks losing disputes over service length. Employers should keep signed employment contracts, attendance records, and written approval for any leave. When a worker has long tenure, even a short gap in records can lead to significant severance liability. Employees should also retain any documents proving their hire date and continuous service, such as pay slips or company communications.

Legal References
Labor Contract Law of the People’s Republic of China, Articles 46 and 47, paragraph 1. Supreme People’s Court Interpretation on Several Issues Concerning the Application of Law in Labor Dispute Cases, Article 13.

Disclaimer
This article is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for specific legal matters.