In January 2008, the plaintiff, H company signed a labor contract with the defendant, It was agreed in the contract that the employee shall not work part-time work for another company that engaged in the same kind of product or service as the plaintiff, for two years from the termination of labor contract. During the non-competition period, the company shall pay non-competition compensation to the employee and the amount shall be no less than 50% of his salary. The employee shall pay damages RMB 50,000 to the employer if he breached his non-competition obligations. On March 3, 2008, Mr. Gao submitted his letter of resignation and completed the "transfer list of work and materials". H company asked Mr. Gao to sign a "termination handover checklist," which also included the item 'waive non-competition compensation.' However, Mr. Gao did not sign the checklist. March 6, 2009, Mr. Gao left H company and joined another mechanical and electrical equipment company.

The court found that while the company had asked the defendant to give up non-competition compensation when terminating the labor contract, this was not agreed to by the employee. Furthermore, company had not paid the non-competition compensation to the defendant. Therefore, the court found ruled that Mr. Gao need not perform the non-competition obligation and need not pay damages to the company as a result of not performing this obligation, on the grounds that the ground had not paid the requisite non-competition compensation to him.

At labor arbitration, Mr, Dai sued for continuation of his employment and for compensation for his loss in salary from the time he was fired. The labor arbitration affirmed part of his claim for compensation based on based on his actual working days but did not reinstate his employment. Mr. Dai appealed to the district court.

In court, Mr. Dai argued that that he was sexually harassed during his work and had reported this to the company several times but the company did not take the complaint seriously and did not try to stop the alleged harassment. Mr. Dai argued that he had no alternative but to email the picture and complaint to his other colleagues. Feeling his actions were reasonable, he believed the decision of the company to terminate his employment for improper conduct was without merit.

The company argued that Mr. Dai used the company's resources for his own purpose, namely to broadcast the alleged sexual harassment to his colleagues, through email. The company further argued that his conduct gravely disturbed the amicable relations between colleagues, and violated the company's regulations.

The court ruled that Mr Dai should have taken proper actions when the company failed to address his alleged sexual harassment. However, he used company resources and the company network to disseminate information unrelated to his work, in order to solve his own problem. His actions were improper and in violation of the discipline and regulation of the company. The court found that Mr. Dai's termination had merit and the verdict of the labor arbitration tribunal was affirmed.

Mr. Zhou, began working for his employer on July 21, 2008 as both a cleaner in the morning and a machine operator in the afternoon. The two parties entered into non-fixed term labor contract, which stipulated that the labor contact would terminate if the employee caused severe damage to the company due to his grave negligence in performing his job duties. In August 2009, the company was informed by one of its clients, that the client was rejecting a batch of goods. After investigation, the employer found that the batch of goods was manufactured by Mr. Zhou. The company believed that due to Mr. Zhou's negligence, the goods were rejected and the company has suffered an economic loss of RMB 10, 000. The company dismissed Mr. Zhou according to the terms of his labor contract.

Mr. Zhou applied for labor arbitration claiming compensation for illegal termination. The arbitration tribunal awarded him RMB 2,880 in compensation, finding that the company had terminated the labor contract illegally. However, the company disagreed with the arbitration decision and filed a lawsuit with the local Shanghai Minxing People's Court.

The court recognized that the company had terminated the labor contract based on the losses to the company allegedly caused by Mr. Zhou's negligence. However, the court found that the company failed to provide sufficient evidence to prove Mr. Zhou had caused severe damage to the company due to his grave negligence in performing his duties and that it was improper for the company to terminate the labor contract. Therefore, the aforementioned judgment was made by the court.

Reported by: People's Court of Shanghai, Jingan District
Beijing Photography Company Defeated by a Shanghai girl's Telephone Record

Reported by: People's Court of Shanghai, Jingan District

Ms. Wang applied for labor arbitration in September 1, 2009 against a Beijing photographing company and its Shanghai branch, claiming that the company had never concluded a labor contract with her during the employment period and therefore should pay her double salary as a penalty as well as the relevant social insurances. Ms. Wang won at arbitration, primarily relying on a telephone record dated July 2009. The following is an excerpt from the conversation between Ms. Wang and her employer:

Ms. Wang: This is Yoyo speaking. Could you please issue a separation certificate for me?

Employer: A labor contract is necessary if we issue the separation certificate for you......

Ms. Wang: A separation certificate is necessary to prove my departure from the company so could we conclude a labor contract according to our real employment period?

Employer: Well, then what's your employment period?

Ms. Wang: I came here on September 1, 2008 and left on July 9, 2009. Could we put that into the contract?

Employer: Ok.

Ms. Wang: My monthly salary amount shall also be provided by the contract. Could we set it as RMB 6,100?

Employer: Yes, gross salary. Just sign a simply labor contract to set forth the period, salary, etc.

After losing at labor arbitration, the company filed an appeal with the Shanghai People's Court, Jingan District. The employer argued that the telephone records could not prove the existence of an employment relationship between the company and Ms. Wang. The employer also argued that the telephone record, the only evidence accepted by the committee, had two critical flaws: 1) the record was incomplete and 2) in the phone record, Ms. Wang merely requested the employer to sign a labor contract and the boss agreed, which only implied the company was willing to conclude a contract with her, not that a labor relationship actually existed between the two sides.

At court, Ms. Wang also presented purchase orders and quotations as evidences to prove she was employed by the company. On one of the purchase orders, "YoYo" was indicated as being a contact person at the company. At court, the company stated that they had no idea who "Yoyo" was and denied that this was Ms. Wang's English name. The company further argued that the purchase order templates were not confidential and any person from outside the company could obtain them with little effort.

As the key controversy focused on the existence of the labor relationship, the Court carefully studied the telephone record and the purchase orders together.

The court found that although Ms. Wang took advantage of her employer' kindness when soliciting him to admit the existence of the labor relationship, the purchase orders and quotations presented at court supported her argument that she was in fact employed with the company. The court found for the employee and the Beijing company and its Shanghai branch were ruled jointly liable for the compensation of RMB 56,000 and social insurances of RMB 29,000.

Employer Fails to Provide Proper Workers Protection, Pays Workers Compensation

Mr. Liu worked at a brickyard in Jiangxi province beginning in February 2009. Mr. Liu's salary was RMB 900 per month. On Aug 6 2009, Mr. Liu's right hand was injured for failing to properly operate his machine and he was hospitalized for one month at a cost of RMB 9,824. The local labor bureau confirmed that Mr. Liu had a level seven physical disability.

The brickyard insisted that it was Mr. Liu's improper operation of his machine that led to his injury and therefore refused to pay his medical expenses. Mr. Liu filed a complaint with the Jiangxi People's Court seeking payment of his medical expenses.

After trial, the Court ruled that the brickyard should pay most but not all of of Mr. Liu's medical expenses. The court stated that because employers are required to provide labor protection measures for workers in conformity with legal provisions, if the employer fails to do this, the employer shall take responsibility for an employee's injury during work. However, since Mr. Liu improperly operated the machine, his improper behavior lessened the responsibility of the brickyard.

In March, The Ministry of Human Resources and Social Security conducted an investigation in various regions across China where labor shortages occurred in the past. The investigation showed that the labor shortage problems in some regions and industries is now lessening. By March 10, labor shortage in Guangdong Province dropped from 900,000 at the end of February to 700,000, a drop of 18%. Labor shortages in Fujian Province dropped from 280,000 at the end of February to 200,000, a drop of 29%.

Mr. Wang Xiaochu, vice-minister of the Ministry of Human Resources and Social Security said, the performing of special professional training project is an important measurement of the State Council, to stem the international financial crisis, and is also an effective step for tackling the current tough job market. He further emphasized these measurements should be effectively executed in the practice.

According to the Ministry of Human Resources and Social Security, the "job rotation training" and "technical promotion training" will focus on rural laborers searching for jobs in cities and workers who are currently employed in enterprise in financial difficulty. Rural graduates from middle or high school will be encouraged to participate in "pre-laboring training" for 6-12 months (1-2 semesters). According to the 'Number 1 document' of the central government, the rural graduates who accept the training and receive a professional certificate, will enjoy a training fee allowance. The short and medium term (1-6 months), practical technical training will be implemented for registered unemployed persons, rural laborers in cities, and registered college graduates searching for jobs. In addition, 10 days of business start-up training will give to registered unemployed persons, rural laborers in cities, and registered college graduates looking for jobs and who wish to start a business.