China: The Court in Guangdong held that employee’s voluntary giving up of annual leave in advance is enforceable

The Employee started to work at a technology company (the “Employer”) in 2012.  In 2017, the Employee handwrote a letter of commitment (the “Commitment”) to the Employer, the main content of which is: “in order to obtain the opportunity to share Company’s long-term growth and profitsI, I will voluntarily give up annual leave entitlement and the corresponding encashment for unused annual leave during my employment.”  In 2018, the Company terminated the employment with the Employee.  The Employee filed labor arbitration and litigation, demanding the Employer to pay additional salary for his annual leave not taken.  The case is eventually ruled in favor of the Employer.  The Court came to this decision based on, (1) though employees have the right to take annual leave, it is not a mandatory provision that prohibits parties from amending through mutual negotiation; (2) the hand-written Commitment showed that the Employee had voluntarily given up annual leave during employment; (3) there is no evidence to show that the Commitment was made under any circumstance of fraud, coercion or being taken advantage of precarious situation, thus, the Commitment is true manifestation of Employee’s intention; and (4) the Company is not needed to pay additional salary to the Employee for annual leave not taken.

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