Eastern China Court Rules on Burden of Proof in Employee Work History Dispute, Orders 19,815 RMB Compensation

Eastern China Court Rules on Burden of Proof in Employee Work History Dispute, Orders 19,815 RMB Compensation

Case Overview

A dispute over the calculation of an employee’s work history and corresponding severance pay reached an Eastern China court. The employer, a chemical company, sought to limit its liability by asserting the employee had worked for only three years. However, the employee claimed a tenure of nearly nine years. The court, applying the legal principle that the employer bears the burden of proof regarding work history, ruled in favor of the employee. The judgment ordered the company to pay over 19,815 RMB in economic compensation, along with unpaid wages and the cost of a mandatory health examination.

Case Background and Facts

Mr. Tang was employed by Hua Lisi Chemical Company (the Company) in Eastern China. The central dispute concerned the length of his employment. The Company claimed Mr. Tang started working in July 2007 and continued until October 2010, for a total of three years. Mr. Tang, however, stated he began work on January 23, 2002, and that his employment relationship with the Company was continuous, including a period of approved leave in March 2007. The employment relationship was terminated on November 22, 2010, due to the Company’s inability to continue operations.

Prior to the termination, the Company and Mr. Tang signed an agreement on November 3, 2010. This agreement stipulated that if the Company did not decide to continue operations by a specific date, it would be considered closed, and employees would be entitled to economic compensation under the law. Following this, Mr. Tang filed for arbitration, seeking unpaid wages, severance pay, and a health examination. The local arbitration commission ruled in Mr. Tang’s favor, awarding him 733.33 RMB in wages, 19,815.03 RMB in economic compensation, and ordering the Company to arrange for a health check. The Company disagreed with the compensation amount and initiated this lawsuit.

Court Proceedings and Evidence

During the court proceedings, the Company acknowledged the termination date of November 22, 2010, and accepted the arbitration award regarding the unpaid wages and the health examination. It also agreed with the calculation of Mr. Tang’s average monthly wage for the twelve months prior to termination, which was 2,201.88 RMB. The Company’s entire legal challenge was based on its assertion that Mr. Tang had only worked for three years, which would have reduced the severance payment to 6,605.01 RMB.

Crucially, the Company failed to submit any evidence to support its claim about the length of Mr. Tang’s employment. The court noted that the Company did not provide any documentation, such as employment records or payroll data, to contradict Mr. Tang’s account. The court, on its own initiative, obtained the case file from the arbitration commission, which included the arbitration application, hearing transcripts, and the final award. Both parties confirmed the authenticity of these documents.

Court Findings and Judgment

The court held that in labor disputes concerning the calculation of an employee’s work history, the burden of proof rests with the employer. The Company was unable to meet this burden. Because the Company provided no evidence to support its claim that Mr. Tang started in 2007, the court accepted Mr. Tang’s assertion that he began work on January 23, 2002.

Based on this finding, the court calculated Mr. Tang’s total length of service as 8 years and 10 months. Under Chinese labor law, when a period of service exceeds 6 months but is less than one year, it is counted as a full year for severance calculation. Therefore, the court treated the service period as 9 years. The court ordered the Company to pay Mr. Tang 19,815.03 RMB in economic compensation, which is the product of his average monthly wage (2,201.88 RMB) multiplied by 9 years. The court also upheld the arbitration award for unpaid wages and the health examination, and dismissed the Company’s lawsuit in its entirety.

Key Legal Principles

The court relied on two fundamental principles of Chinese labor law. The first is that an employer and employee may agree to terminate a labor contract, and if they do, the employer must pay economic compensation. The second principle, and the most critical in this case, is that the employer bears the burden of proof for any facts it asserts regarding the employee’s work history. This means that if a company claims an employee worked for a shorter period, it must provide credible evidence such as signed contracts, attendance records, or payroll slips. Failure to do so will result in the court accepting the employee’s version of events.

Practical Insights

This case serves as a clear reminder of the importance of proper record-keeping for employers. Companies must maintain accurate and complete personnel files, including employment start dates, contract records, and attendance logs. In a dispute, the inability to produce such records can be financially damaging. For employees, this case illustrates that the law places a significant burden on the employer to prove the length of service. An employee’s own testimony, when uncontradicted by the employer’s evidence, can be sufficient for a court to find in their favor.

Legal References

Labor Contract Law of the Peoples Republic of China, Articles 46 and 47, paragraph 1.
Interpretation of the Supreme Peoples Court on Several Issues Concerning the Application of Law in the Trial of 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.