Court Rules Employer Must Pay Unpaid Wages and Wrongful Termination Damages of 20,000 Yuan

Court Rules Employer Must Pay Unpaid Wages and Wrongful Termination Damages of 20,000 Yuan

Case Overview
A Chinese civil court in Eastern China ruled that a vacuum coating company must pay its former business manager approximately 20,000 yuan in unpaid wages, business subsidies, and compensation for wrongful termination. The court found that the employer failed to prove the employee voluntarily resigned and improperly withheld wages that were contractually owed. The case highlights key principles regarding burden of proof in employment disputes and the enforceability of written employment agreements.

Case Background and Facts
The plaintiff, a vacuum coating company based in Eastern China, hired Mr. Lu as its business manager on March 23, 2010. The parties signed a written agreement on the same day stating that Mr. Lu would receive a monthly salary of 5,000 yuan, which included expenses for business travel. No formal labor contract was ever signed between the parties. Mr. Lu worked until late August 2010, when a dispute arose over his wages and the termination of his employment.

The company claimed that Mr. Lu stopped coming to work on August 13, 2010, and that he had effectively resigned without notice. The company argued it had attempted to contact Mr. Lu multiple times by phone and had posted a notice regarding his absence. The company sought a court declaration that it owed no further wages or compensation to Mr. Lu.

Mr. Lu countered that he continued working until September 1, 2010, and that the company had forced him out after he had brought substantial business and profits to the company. He claimed the company owed him unpaid wages for June, July, and August, as well as business subsidies and compensation for wrongful termination.

Court Proceedings and Evidence
The case was heard in a civil court in Eastern China under summary procedures. Both parties appeared and presented evidence. The company submitted phone records, a posted notice, personnel records, wage tables, and expense reimbursement forms to support its position that Mr. Lu had voluntarily left and that his salary structure was 900 yuan basic wage plus 3,100 yuan allowance.

Mr. Lu presented the signed agreement showing a monthly salary of 5,000 yuan, along with outsourced processing orders bearing the company’s seal that he argued proved he was still working on company business as late as August 26, 2010. Mr. Lu also noted that he had received only 4,000 yuan for April and May 2010, and had received business subsidies of 1,000 yuan for June and July.

The company challenged the authenticity of the outsourced processing orders but declined to apply for a forensic examination of the seal. The court drew an adverse inference from this refusal.

Court Findings and Judgment
The court held that a clear employment relationship existed between the parties, governed by labor laws. Regarding Mr. Lu’s salary structure, the court rejected the company’s personnel records because Mr. Lu had not signed them. Instead, the court relied on the signed agreement, which established a monthly salary of 5,000 yuan. The court found that this amount consisted of 4,000 yuan base salary plus 1,000 yuan business subsidy, with additional business commissions.

The court determined that the company still owed Mr. Lu: 1,000 yuan business subsidy for April 2010, 1,000 yuan business subsidy for May 2010, 4,000 yuan salary for June 2010, 4,000 yuan salary for July 2010, 4,000 yuan salary for August 2010, and 1,000 yuan business subsidy for August 2010.

On the termination issue, the court found that the company failed to prove Mr. Lu had voluntarily resigned. The phone records did not establish his absence, and the notice’s authenticity was unconfirmed. The outsourced processing orders showed Mr. Lu was still handling company business on August 26, 2010. The court accepted Mr. Lu’s claim that he worked until September 1, 2010, and concluded that the company wrongfully terminated him. The court ordered the company to pay 5,000 yuan as compensation for unlawful termination.

The court also ordered the company to pay 5 yuan in court costs and to arrange social insurance contributions for Mr. Lu from March 23 to August 24, 2010, with Mr. Lu responsible for his personal share.

Key Legal Principles
The court applied the principle that the employer bears the burden of proving the facts supporting a claim of voluntary resignation. The court also emphasized that written agreements signed by both parties carry strong evidentiary weight in determining salary terms, overriding unilaterally prepared personnel records. The court applied the adverse inference rule when the company refused to authenticate a document bearing its own seal.

Legal References
Labor Law of the Peoples Republic of China, Article 50 (wages shall be paid in full and on time)
Labor Contract Law of the Peoples Republic of China, Article 87 (employer liable for double compensation for unlawful termination)
Supreme Peoples Courts Several Provisions on Evidence in Civil Proceedings, Article 2 (burden of proof)

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