[Summary of the trial]
The employer notifies the foreign employee that it will not continue to perform the labor contract between the two parties, and according to the agreement between the two parties in the labor contract, if the contract is terminated before the expiration of the term, the employer shall pay the foreign employee 6 months' salary. The contract stipulates that the monthly salary of the foreign employee is US$8,000 after tax, so the employer shall pay the foreign employee a salary of US$48,000 for six months in accordance with the contract.
【Brief Facts of the Case】
In September 2017, a company signed an employment contract with a foreign employee for a period from September 2017 to September 2022, stipulating that if the contract was terminated before the expiration of the contract, the employer should pay the foreign employee six months' salary.
ON MAY 19, 2019, NEDBEGOVIC, THE ASSISTANT TO THE LEGAL REPRESENTATIVE OF A COMPANY, SENT AN EMAIL TO THE FOREIGN EMPLOYEE, INFORMING THE FOREIGN EMPLOYEE THAT THE RESULT OF THE FOREIGN EMPLOYEE'S MANAGEMENT SCOPE WAS MUCH LOWER THAN THE COMPANY'S EXPECTATION AND FAR LESS THAN THE COST OF STARTING THE MARKET, AND THE TWO PARTIES WOULD NO LONGER CONTINUE TO COOPERATE ON THE BASIS OF THE ORIGINAL CONTRACT, AND THIS DECISION WOULD TAKE EFFECT IMMEDIATELY, AND ALL CUSTOMERS WOULD BE INFORMED OF THIS ORGANIZATIONAL CHANGE.
ON JULY 22, 2019, THE EXPATRIATE EMPLOYEE SENT AN EMAIL TO NEDBEGOVIC ASKING QUESTIONS ABOUT THE PAYMENT FOR THE TERMINATION OF THE CONTRACT. NEDBEGOVIC REPLIED THAT THE SENIOR MANAGEMENT HAD NOT YET MADE A DECISION ON ITS ISSUE AND ASKED THE EXPATRIATE STAFF TO STOP CONTACTING CUSTOMERS UNTIL THE SITUATION WAS FULLY CLARIFIED.
The foreign employee believes that the company terminated the employment contract with him on May 19, 2019. ALTHOUGH THE COMPANY RECOGNIZED THAT THE EMAIL ADDRESS USED IN THE ABOVE-MENTIONED EMAIL WAS AN ENTERPRISE EMAIL ADDRESS AND THAT THE SENDER NEDZADBEGOVIC WAS A PERSON EMPLOYED BY A CERTAIN COMPANY, IT HELD THAT NEDZADBEGOVIC WAS NEITHER THE LEGAL REPRESENTATIVE OF A CERTAIN COMPANY NOR THE HEAD OF THE HUMAN RESOURCES DEPARTMENT OF A CERTAIN COMPANY, AND HAD NO AUTHORITY TO MAKE A DECISION TO TERMINATE THE LABOR CONTRACT ON BEHALF OF A CERTAIN COMPANY, AND EVEN IF NEDZADBEGOVIC SENT AN EMAIL TO TERMINATE THE LABOR CONTRACT WITH A FOREIGN EMPLOYEE, SUCH AN ACT WOULD NOT HAVE LEGAL EFFECT ON THE COMPANY.
THE COURT FOUND THAT THE COMPANY TERMINATED THE EMPLOYMENT CONTRACT WITH THE FOREIGN EMPLOYEE ON MAY 19, 2019, BASED ON THE CONTENT OF THE EMAIL, THE DECISION OF THE TIANJIN BUREAU OF FOREIGN EXPERTS TO GRANT THE ADMINISTRATIVE LICENSE, WHICH STATED THAT NEDZADBEGOVIC WAS THE PERSON IN CHARGE OF THE COMPANY, AND THE FACT THAT THE COMPANY HAD NOT PAID WAGES TO THE FOREIGN EMPLOYEE SINCE JUNE 2019.
【Judgment Result】
Tianjin Binhai New Area People's Court (2020) Jin 0116 Min Chu No. 4245 Civil Judgment The employer shall pay liquidated damages for 6 months' wages in accordance with the standard agreed in the contract;
The Tianjin No. 3 Intermediate People's Court (2020) Jin 03 Min Zhong No. 4251 Civil Judgment upheld the original trial court's determination that the employer should pay liquidated damages for 6 months' wages in accordance with the standard agreed in the contract.
【Case Tips】
Employers are reminded that if they establish an employment relationship with a foreign employee, they should perform administrative examination and approval and go through the formalities for an employment permit in accordance with the law, and the foreigner's employment area must not be changed without authorization, otherwise the validity of the employment permit may not be recognized, and the employer may be punished by the exit-entry administrative department. If the two parties agree on the early termination of the contract, combined with the current judicial practice, it tends to be considered one-way valid, that is, if the foreign employee claims liquidated damages from the employer according to the agreement between the two parties, it will be recognized by law, and the employer only terminates the contract with the foreign employee a few months in advance, and the employer will also be subject to the corresponding regulations of the Labor Contract Law.
Foreign employees are reminded that according to the law, they need to go through prior administrative approval to join a Chinese company, and they can sign a fixed-term employment contract for up to 5 years. If there is a clear agreement in the employment contract between the two parties that the employer requires a notice period of three months or six months or corresponding liquidated damages for early termination of the employment relationship, if the other party refuses to bear the liability for early termination, the legally employed foreign employee can claim the other party's liability for breach of contract on this ground.
Disclaimer: The content of this article is for reference only and is not intended as legal advice for specific cases.