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China: Employer’s Defenses for not Reinstating Employment shall be Strictly Reviewed

The employee Ms. Xie joined the employer’s company in 2017, where she served as deputy director of the commerce department. In this role, she was mainly responsible for sales. The employer unilaterally terminated the employment with Ms. Xie, based on the reason that she had seriously violated the employer’s rules and policies.

Subsequently, the employee applied for labour arbitration, claiming that the employer’s unilateral termination was wrongful and thus her employment should be reinstated. The employer rebutted that the employee’s original duties were fulfilled by other staff, or that her original department position had been adjusted and subsequently cancelled, or that the basis of mutual trust was lost. Accordingly, the employer asserted that the reinstatement of employment could not therefore be supported.

This case went through labour arbitration and two trials. Eventually, the court ruled in favour of the employee and ordered the reinstatement of her employment. The court came to this decision based on: i) the employee’s sales role was neither highly irreplaceable nor unique at the employer’s company; ii) the employer could still offer an alternative position to the employee, similar to her original position, after the department’s cancellation; and iii) the basis of mutual trust would not be deemed to be lost, when the employee’s only conflict was with her supervisors.