China: Court releases White Paper on Trials of Labour Dispute Cases involving Senior Executives

The Shanghai First Intermediate Court recently held a press conference to release the White Paper on Trials of Labour Dispute Cases involving Senior Executives, releasing ten typical cases during the period from 2019 to 2021, in order to inform the public.

The main judicial rules embodied in these cases are as follows:

• the existence of a labour relationship between the legal representative and the employer still needs to be determined by adhering to the principle of reviewing actual performance;
• the original intent of the agreement between the two parties should be explored to determine whether an amount is a shareholders’ bonus or performance bonus;
• the burden of proof on senior executives should be increased when they provide doubtful documents sealed by an official stamp in order to claim rights;
• if the employer does not apply attendance rules to senior executives, the failure of the executives to comply with attendance rules cannot be determined as a sufficient basis for the employer’s legitimate termination of employment;
• equity incentive disputes are generally not suitable to be handled as labour disputes; and
• if a senior executive’s claim is for the reinstatement of the employment relationship, the objective conditions for continued performance should be strictly examined.