This is a typical case of legally terminating an employment contract, where the plaintiff is Company A from Foshan City, and the defendant is Mr. Deng. The case revolves around a labor contract dispute.
- Basic facts of the case
In June 2018, Company A (engaged in concrete business) appointed Mr. Deng as the technical director. In 2020, Mr. Deng purchased concrete from Company A for his own housing construction, but the company’s system showed that the parameters of the concrete supplied to Mr. Deng (which were for high-grade concrete) were higher than the standards of the concrete he purchased (Mr. Deng bought low-grade concrete). In November 2021, Mr. Deng fell while descending a staircase at Company A and was injured while on a phone call with a colleague discussing work tasks, fracturing his right foot. In January 2022, Mr. Deng’s injury was recognized as a work-related injury. In April 2022, Mr. Deng printed out his salary records and discussed them with others, violating the confidentiality clause in the Employee Handbook, and Company A gave Mr. Deng a Class B work negligence penalty. In April 2022, an outsider reported Mr. Deng’s abnormal concrete purchase data to Company A, and the company informed Mr. Deng of the report and had several discussions with him, but Mr. Deng failed to provide a reasonable explanation for the data anomaly. In May 2022, a local housing construction authority inspection team conducted a special inspection at Company A and found some serious issues, placing the company under key monitoring. Among these issues, such as incomplete inspection materials, test results not meeting standard requirements, and raw materials lacking calibration records, fell under the responsibility of the technical department led by Mr. Deng. Company A again gave Mr. Deng a Class B work negligence penalty. On May 31, 2022, after notifying the company’s labor union, Company A issued Mr. Deng a “Notice of Termination of Employment Contract,” stating that according to the Employee Handbook, the company could terminate the employment contract immediately if an employee received two Class B penalties within a year. Mr. Deng later filed for labor arbitration, requesting that Company A pay for work injury insurance benefits and compensation for the illegal termination of the employment contract. Company A appealed the arbitration decision to the court.
- Disposition of the Case
Upon review, the court determined that Company A should pay Mr. Deng work injury insurance benefits but was not required to pay compensation for the illegal termination of the employment contract. Mr. Deng, dissatisfied with the ruling, filed an appeal. The higher court rejected the appeal and upheld the original judgment.
- Revelation of the case
Lessons from the Case Constructing harmonious labor-capital relations is an important issue that must be addressed for the long-term and stable development of a company. This case is a typical labor dispute case, involving two common issues in labor disputes: one is the issue of work injury compensation, and the other is the issue of economic compensation for the termination of employment relations. The judgment in this case protects the legitimate rights and interests of employees with work injuries, clarifying the legal responsibility of the employer to pay work injury insurance benefits. On the other hand, in cases where a worker seriously violates company rules and regulations, the employer can terminate the employment relationship through legal procedures without paying economic compensation to the worker. It is important to note that when an employer formulates or modifies rules and regulations that directly affect the vital interests of workers, or when dealing with significant matters, it should discuss these with the employee representative congress or all employees and inform the workers of the rules and regulations. If the employer fails to inform the workers of the rules and regulations, these cannot be used as a basis for determining the rights and obligations of both parties. An employer with a trade union organization that unilaterally terminates an employment contract should notify the union of the reasons in advance. If the union is not notified in advance, and the worker requests economic compensation from the employer for illegally terminating the employment contract, the court should support the worker. In this case, the concrete company submitted evidence such as meeting notices, training confirmation records, public notice photos, and WeChat chat records, confirming that the Employee Handbook was agreed upon by the company’s union and acknowledged by the employees, and was publicly announced to all employees. Therefore, the court recognized that the Employee Handbook was binding on Mr. Deng. The concrete company also submitted a letter notifying the union of the termination of the employment contract, so the court confirmed that the procedures for terminating the employment contract by Company A were legal.
This case has guiding, exemplary, and referential significance for promoting enterprises to hire workers in accordance with the law, reducing labor disputes, and maintaining legitimate employment autonomy. It promotes the core socialist values of respecting one’s position and loving one’s profession, gives a negative evaluation to the worker’s violation of professional ethics and damage to the company’s interests, and upholds the employer’s legitimate right to hire and fire, helping to create a first-class business environment and achieving a good judicial outcome.
- Research Insights
In labor dispute cases, illegally terminating employment contracts is a perennial problem for many small and medium-sized enterprises. Some companies, when terminating employment contracts due to employees’ serious violations of company rules and regulations, often end up having to pay compensation for illegal termination because of their own inadequate personnel compliance systems. In this case, the fact that the company involved legally established a trade union and issued the “Employee Handbook” following legal procedures was the fundamental prerequisite for legally terminating the employee’s contract. This has typical exemplary significance for promoting the construction of enterprise personnel compliance systems.