4 days are considered public holiday while some might get 8-10 days. Only triple overtime wages will be considered for the 4 days that are considered a public holiday.

Problem:

The non-compete clause they drafted up only included the employee’s responsibilities and no responsibilities of the employer. When they go to the court, the court judges in the employee’s favor, because the contract only stipulated the responsibilities of the employee, but did not stipulate what the employer was responsible for. The court also stated, both parties should have equal rights and responsibilities. The employee was liable/responsible for a certain set of rules stated within the non-compete clause, but there were no equal responsibilities for the company to abide by in the contract. Whether this was the company’s intent or not, the contract was clearly biased. Therefore, the contents should not be binding on the employee.

This is an interesting situation above. Now the employee can take other job, of the same title, at other competing company and approach old customers to do business. Everything the non-compete clause was supposed to prevent, had utterly failed. Again, there is this sense of “fairness” gong on. Chinese courts will not follow a completely one sided and winner-takes-all contract. The concept of “Good Faith” is a big reason for this. Negotiating in good faith, creating contracts in good faith, and performing a contract in good faith is an idea used today and written into law.

While the court did not mention good faith in the case, we could take a stab at a possible theory that the company could have been charged with “failure to negotiate in good faith” because of the one sided contract. Next week, I will get into what good faith means to you.

- When do you have a right to fire someone?

- What is the proto-call in this case?

August 1^st, 2008, a Shanghai neighborhood security guard was fired in the afternoon after disagreeing with his company to be transferred to another district in the morning. He had a labor contract from Dec 1 2007 – Nov. 30 2008. The company thought the guard had made a serious breach of company regulations when he did not comply right away. The guard believed he was fired unfairly and without good reason.

The court explained, employers need to discuss matters with their employees and explain the reasoning behind their ideas. The court also concluded the company performed an “improper act”. By notifying the guard in the morning of his transfer with no previous discussion and then subsequently firing him in the afternoon when he disagreed was unjustifiable. The company was ordered to reinstate his job and pay back wages from August 1^st to the time he is reinstated.

Let’s look at labor laws concerning this: ( in British English )

Labour law – Article 25

If a labourer is under any of the following circumstances, the employing unit may cancel the labour contract with him:

(1) Having been proved not up to the requirements for recruitment during the probation period;

(2) Having seriously violated labour discipline or the rules and regulations of the employing unit;

(3) Having caused great losses to the employing unit through gross neglect of duty or malpractice for personal gains; and

(4) Having been investigated for criminal responsibility in accordance with the law.

AS WELL AS …

Labour law-Article 26

In any of the following circumstances, the employing unit may cancel the labour contract, however, a written notice shall be given to the labourer concerned 30 days in advance:

(1) Where a labourer is unable to take up his original work or any work specially arranged by the employing unit after completion of the period of his medical treatment for illness or not work-related injury;

(2) Where a labourer is unqualified for his work and remains unqualified even after receiving a training or after readjusting the work post; and

(3) Where the objective conditions taken as the basis for the conclusion of the contract have changed so greatly that the original labour contract cannot be carried out, and no agreement on modification of the labour contract can be reached through consultation by the parties.

With all these details above, it is difficult to out right fire someone without some solid, recorded reasons…  These laws above cover only canceling employment contracts. The matter of compesation is a whole other matter. Look into your local labor laws and find out what is expected.  The little bit of leg work might get you out of a long standing bout over 10,000 yuan.

Employers almost certain to lose at China labour tribunals

June, 2009

www.chinalawandpractice.com

Employees are winning almost all unfair dismissal cases at labour tribunals across mainland China, and there may be political considerations in play.

The PRC Employment Contract Law, which took effect on January 1 2008, introduced the right to low-cost labour arbitration. Since then, there has been a dramatic rise in the number of cases handled by labour tribunals.

“What this means is that the arbitrators may be less likely to spend the time considering the legal merits and in our experience will be much more inclined to try to help the parties negotiate a quick settlement,” said Joseph Deng, special counsel with Baker & McKenzie in Beijing, during a China Law & Practice web-seminar held on June 25.

“In terms of the bottom line for an employer, your highest risk will be if you have to terminate an employee and do not have a perfectly legal way to do it,” he said.

A recording of the entire 60-minute web-seminar, entitled Working with the Employment Contract Law, is available online at www.chinalawandpractice.com/webseminars