Reported by: Chongqing Second Intermediate People's Court

Mr. Zhang, 47 years old, was formerly an employee of a medical clinic in Yunyang County, Chongqing. In March 2003, the clinic was closed and all employees including Zhang were to be transferred to another clinic. The Health Bureau of Yunyang County issued a letter to all employees regarding staff movement, transferring some staff including Zhang to work at another health clinic. In December 2003, Mr. Zhang reported to work and was again reassigned to another health clinic attached to the health bureau. On the day he was reassigned, the health clinic arranged for Mr. Zhang to pick up his duty clothes, stethoscope, and other work items. However, Mr. Zhang did not pick up his work equipment and never reported for duty for his new assignment. From 2003-2008, Mr. Zhang never reported to duty yet never resigned his position. At the same time, the health clinic never disciplined him or terminated his position.

On Sep. 01, 2008, the Health Bureau of Yunyang County issued a notice to Mr. Zhang requesting that Mr. Zhang come back to work. Zhang said he might report to work on the condition that the health clinic pay the basic salary he claimed was owed to him from Jan. 2004 - 2008. The health clinic refused to make the payment on the grounds that Zhang had been absent from work without leave and in fact had never reported to work.

Neither side disputed that Zhang had been absent from work for five years. However, Zhang denied that he had been absent from work without leave and said that he had been assigned to work at the health clinic by the health bureau but the clinic had refused to accept him. Zhang claimed that he had reported the situation to the health bureau a number of times, requesting alternate work arrangements. Yet the health clinic asserted that Zhang had been absent from work without leave and that the clinic had reported the situation to the Health Bureau requesting Zhang's dismissal.

In March 2008, Zhang, who failed to reach an agreement with the health clinic, applied with the Personnel Dispute Arbitration Committee of Yunyang County for an arbitration. After being rejected by the arbitration committee, Zhang filed a lawsuit with the court.

The court did verify that Mr. Zhang had in fact been absent from his position for five years. According to the law, Mr. Zhang should have been disciplined by his employer. Not only was Mr. Zhang not disciplined, he was strangely enough, able to produce annual performance reviews for this period in which the employer had declared him 'fit for the post'. Zhang argued that if he had been really 'absent without leave, the health center would not have rated him as 'fit for the post' at each annual assessment during this period. In addition, Zhang presented to the court, "Circular No. 100 of Yunyang Health Bureau (2007)" issued by the Yunyang Health Bureau. Zhang listing the names of people who were terminated to do regorganization. Zhang's name was not on the list. Zhang further argued that the fact that he had been transferred to the health clinic but was absent from work was a result of the health clinics refusal to accept his transfer, hence, his request to the court to order the health clinic to compensate him for the basic salary he had earned during those years.

The court held that Zhang, after reporting for duty with the health center, was absent from work without leave. Mr. Zhang, though in violation of the labor discipline and professional ethics, should have received punishment according to the labor law, yet was not punished accordingly. Moreover, he was even rated as fit for his post during the annual assessment from 2003 through 2007. Therefore, the labor and personnel relations between the two sides still existed.

Based on the evidence, the Chongqing Second Intermediate People's Court rendered a judgment that the employment relationship between Mr. Zhang and the employer still existed and that although the employee had not actually taken up his post or reported for work, the employer should pay him a subsistence salary according to the then local standards. The court then ordered the employer to pay to Mr. Zhang RMB23,680.00 for the period from Jan. 2004 - Oct. 2008.

The flight attendants stated that they were always conscientious in performing their job duties. However, in September of 2008, the Airline had unilaterally terminated their flight schedules and required them to attend off the job training for incompetence. This was done although there had been no prior formal assessment or evaluation of their work. At the same time, their salaries were reduced from RMB 10,000 to RMB 800.

The airline submitted evidence showing that the twenty-one airhostesses were unqualified. The airline further argued that an employer is entitled to decide the employee's work plan and whether to arrange a flight schedule for the employee was up to the company. The airline further stated that because of the financial crisis, the company had suffered serious difficulty and had decided to not arrange flights for the flight attendants, instead scheduling them for training to improve their professional skills.

The Court stated that although Xinhua Airlines submitted assessment reports as evidences to prove the incompetence of the flight attendants, the performance assessments had been improper for lacking of standard grounds for assessment, criteria for assessment, and the policy had not been published to the whole company. The court also found the airline's insistence that one of the stated reasons for the off the job training was the company's current financial difficulty, to be inconsistent with the reasons that had been explained to the flight attendants, i.e. incompetence. The court refused to accept such argument.

The court ruled that Xinhua Airline shall totally pay RMB 1,000,000 to the airhostesses.

In April 2008, Mr. Zhao began working for an electrical Company located in Shanghai. Mr. Zhao and the employer did not sign an employment contract. In March 2009, Mr. Zhao filed a claim with the Labor Arbitration Commission in Jiading District, Shanghai, claiming that the company should pay him twice his wage during the period May 2008 to March 2009, totaling. RMB 17,000RMB. During the arbitration, the two parties signed a written labor contract, in which the contract period ran from January 1, 2009 to December 31, 2009. The newly signed labor contract did not cover the period of May 2008-March 2009, although Zhao had in fact worked for the employer during this period.

In August 2009, the company terminated the labor contract with Mr. Zhao on the grounds that Mr. Zhao has materially breached the company's rules and regulations. Following his termination, Mr. Zhao again filed an arbitration claim against his employer, this time for compensation for illegally terminating his labor contract and requesting double salary for the period of May 2008 C March 2009, the period he had worked without a labor contract. The Labor Arbitration Commission awarded Mr. Zhao twice his wage for the period of May 2008 to March 2009, as a penalty for not signing written contract with Mr. Zhao, as required by law.

The company did not accept the decision and appealed to the People's Court.

Decision of the Court

The court cited China's Labor Contract Law (2007) which requires that a written labor contract be concluded when establishing an employment relationship, and if an employer concludes a written labor contract more than one month but less than one year after the date on which the employee has started work, the employer shall, each month, pay to the employee twice his wage.

The company did not sign written labor contract with Mr. Zhao when the employment relationship was established from April 19, 2008 until to the date of March 23, 2009. According to the law, the company should pay Mr. Zhao twice his wage during the period from May 2008 to March 2009 for not signing a written contract with Mr. Zhao. The Court affirmed the decision of the Labor Arbitration Commission.

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.

On April 2 2008, Mr. Zhang was employed by a legally registered company, owned by Mr. Peng. While performing his job duties, Mr. Zhang fell from a high building causing severe head, back, and eye injury. Mr. Zhang's injury was verified as an industrial injury by the Labor Disability Verification Committee.

However, to evade responsibility and payment to the injured employee, the company's owner Mr. Peng deregistered the company. On Jan 9 2009, Mr. Zhang filed a claim with the local Labor Arbitration Committee, claiming medical expenses, salary during the medical period, and disability payments.

The Arbitration Committee ruled that Mr. Peng should be liable to pay compensation for Mr. Zhang's salary during the medical recovery period as well as disability payment. The committee stated that since Mr. Zhang was injured during his work and the injury was classified as an industrial injury by the Labor Disability Verification Committee, then in accordance with the Industrial Injury Insurance Law, the employer shall bear responsibility for the employee's injury. Although the company had been deregistered, the company's owner was then liable for the payment of compensation.

Reported by: Shanghai No. 2 Intermediate People's Court

PPG Shanghai hired Mr. Zhou Li as IT manager with an open ended labor contract on September 24, 2007. In the contract, the two parties agreed that Zhou's duty was to take charge of web system operation and maintenance and the company was entitled to terminate him if he failed to meet the recruitment requirements within the three-month probation period. On November 8, 2007, only one and a half months after the contract commenced, PPG notified Zhou Li that his employment was terminated with immediate effect and required him to leave the office.

Zhou refused to accept the decision and brought the dispute to the local labor arbitration committee, requesting the company to revoke the termination decision, continue the labor contract and claiming for his salary (9,000 RMB per month) from November 9, 2007 to the awarding date. His claim was supported by the arbitration committee. According to the award, the company was required to re-hire Zhou and compensate him for his loss of salary from the time from receiving the termination notice, for a total of RMB 72,000 in total.

PPG was astonished by such a large compensation amount, as well as being required to re-hire an employee who they deemed to be incompetent.

During the court hearing, the company claimed that Zhou was terminated due to his incompetent performance and failure to satisfy the requirements for which he had been recruited. It presented two pieces of evidence, the recruitment requirements for the position and an internal letter from Zhou, apologizing for a network breakdown. At the hearing, Zhou denied having seen or received the recruitment requirements and therefore asserted the termination was groundless.

According to the court, the evidence presented by the company was not sufficient to prove Zhou's serious mistakes or flagrant incompetence in performing his work. However, the court stated that the probation period is designed for the employer to have a better understanding of the employee's abilities and professionalism in deciding whether to retain the employee or not. During the probation period, the company's termination right shall not be limited by such requirements as serious misconduct or flagrant incompetence. Otherwise, there would be little point in having a probation period under the existing labor law. Although Zhou Li denied having seen the specific items on the job description submitted by the company, the court found that maintaining a network system in good condition is a basic requirement for an IT manager in charge of web systems operation and maintenance.

Even if Zhou's mistakes were not considered serious, the company had no obligation to tolerate such mistakes during the probation period. Therefore, the court found that Zhou Li's termination was justified and the employer was not required to re-hire him.

Plaintiff, a university student took part in a job fair held at his university and signed an 'Agreement On the Employment of University Graduates' with Beijing Changkong Machinery Co. Ltd., a company recruiting at the fair. The agreement provided for the time period of the job, post of duty, type of work, salary standard, insurance and welfare and liabilities for breach of contract, etc. One year later, plaintiff arrived in Beijing to begin working for the company. However, during his pre-employment medical examination, he was found to have Hepatitis B Carrier (HBVER), and rejected by the company. On the morning of Apr. 15, the People's Court of Changping Disctict, Beijing held a public hearing on the case.

During the court hearing, the plaintiff argued that the plaintiff, the defendant and the Nanjing University of Science and Technology together signed an Agreement On the Employment of University Graduates'. On Aug. 11, 2009, the plaintiff, after his graduation, reported to the company to begin working. On Aug. 12, 2009, the plaintiff took part in job training and was arranged to work in the eighth workshop as a process operator. On Aug. 24, the plaintiff received his medical examination report which showed him to be carrying Hepatitis B (HBVER). On Aug. 24, the defendant RMB 1400 to the plaintiff, requiring him to move out of his company dormitory and rejecting his employment.

The plaintiff argued that a labor contract relationship exists between the two parties and there is no special health requirement stipulated in the Agreement On the Employment of University Graduates. He further argued that even if he was found to be carrying Hepatitis B, the contract relationship between them should not be terminated. Furthermore, Chinese labor law explicitly states that the carrying Hepatitis B is not a cause for the dissolution of the labor relationship. Therefore, the defendant's acts constituted a form of employment discrimination. The plaintiff demanded a written apology and compensation of over RMB 40000 from the defendant.

The defendant argued that the Agreement On the Employment of University Graduates signed among the plaintiff, the defendant and the Nanjing University of Science and Technology is an agreement of intent which does not necessarily result in a labor contract relation. Thus, the defendant has not yet employed the plaintiff, and the termination of the contract or the liability for breach of contract are non-issues. Defendant further argued that the terms of the Agreement On the Employment of University Graduates explicitly state that if the plaintiff is an infectious person, the company may unilaterally terminate the agreement. Further more, the defendant argued that plaintiff purposely concealed the fact that he was a Hepatitis B carrier, a major factor which led to the invalidity of the agreement and therefore the Plaintiff should bear the liability for the breach of contract.

The court has not yet rendered it decision.

The Shanghai Municipal Human Resources and Social Security Bureau has released data showing that, in 2009, the average annual wage of employees in Shanghai was RMB 42,789, and the average monthly wage was RMB 3,566, an increase of 8.3% over 2008.