A drop of water can refract the sun's rays.
A case can demonstrate the rule of law.
The official WeChat of the Supreme People's Court has launched the column "Small Cases, Big Truths, New Trends of the Times", taking you to review those shining "small cases", reminisce about the "truths" contained in them, and feel the positive energy of fairness and justice promoted in each judicial case. This issue brings you a year-end bonus dispute case.
The year-end bonus means that the employer affirms the employee's work performance in the past year, and is generally paid to the employee at the end of the current year or the beginning of the next year. Is the right to issue the year-end bonus in the hands of the employer? When the employer refuses to pay the year-end bonus, how can the employee protect his or her legitimate rights and interests? Recently, a Beijing court concluded a year-end bonus dispute case, and a company was ruled to lose the case because it failed to provide evidence on the year-end bonus payment method and the reasons for not paying it.
Basic facts of the case
Mr. Gao joined a company in Beijing in March 2015 as a resident employee with a monthly salary of 30,000 yuan. The labor contract signed by both parties stipulates that "whether the year-end bonus is paid shall be determined by the company independently based on factors such as the overall business situation and the individual work performance of the employees". Around March every year, a company in Beijing issues the year-end bonus of the previous year, and Mr. Gao has received the year-end bonus from 2016 to 2020 for five consecutive years.
In 2022, a company in Beijing informed Mr. Gao that he would no longer issue the 2021 year-end bonus on the grounds that "the issuance of the year-end bonus belongs to the independent management right of the enterprise and the company's operation difficulties", and the two parties sued the court after a dispute. In the lawsuit, a company in Beijing did not provide any evidence on the accounting of the year-end bonus or the business status of the enterprise.
The People's Court of Haidian District, Beijing Municipality held in the first-instance trial that, firstly, a company in Beijing had paid Mr. Gao a year-end bonus for five consecutive years, and as an employer with management responsibility, a company in Beijing should bear the burden of proof on the specific conditions, standards and accounting methods for the year-end bonus, but a company in Beijing did not submit evidence in this regard and should bear adverse consequences. Furthermore, a company in Beijing claimed that it was not required to pay the year-end bonus on the grounds of business difficulties, but failed to submit evidence on the claimed operating losses, and should bear the legal consequences of failing to provide evidence. In the end, the court ordered a company in Beijing to pay Mr. Gao 25,000 yuan for the 2021 year-end bonus with reference to the amount of the year-end bonus in 2020.
After the verdict was pronounced, a company in Beijing appealed. The second-instance judgment rejected the appeal and upheld the original judgment. At present, the judgment has taken legal effect.
The judge's heart
Wang Fang, Judge of the People's Court of Haidian District, Beijing
The year-end bonus is a reward paid by the employer to the employee, which is a part of the labor remuneration. Paragraph 1 of Article 30 of the Labor Contract Law of the People's Republic of China stipulates that "an employer shall pay labor remuneration to the employee in full and in a timely manner in accordance with the provisions of the labor contract and national regulations." "The current laws and regulations do not stipulate whether and how the employer should set the year-end bonus, etc., and if the employer and the employee have an agreement on the standards or conditions for the payment of the year-end bonus, the agreement shall prevail; If there is no agreement or the agreement is unclear, a comprehensive assessment of whether the year-end bonus should be paid shall be made based on the internal rules and regulations formulated by the employer through democratic procedures, the previous payment practices, and whether the relevant elements of the payment conditions have been achieved.
In trial practice, if some employers refuse to pay the year-end bonus on the grounds that the enterprise is in difficulty in operating or the employee fails to pass the annual evaluation, it shall bear the corresponding burden of proof for its own claim, and if no evidence is submitted, it shall bear the legal consequences of failing to provide evidence.
In order to avoid labor disputes caused by the issuance of year-end bonuses and build harmonious and stable labor relations, employers should standardize their own employment management, make clear agreements with employees on the conditions and standards for the payment of year-end bonuses in the labor contract, or make detailed provisions on the rules for the payment of year-end bonuses in the form of rules and regulations, standardize the payment of year-end bonuses, and consciously safeguard the legitimate rights and interests of employees. At the same time, employees should also perform their duties in a standardized manner, actively complete their work tasks, abide by professional ethics and rules and regulations, pay attention to retaining relevant evidence, and protect their legitimate rights and interests in accordance with the law.
Expert commentary
Professor and doctoral supervisor of the Law School of the Central University of Finance and Economics, and vice chairman of the Labor and Personnel Dispute Resolution Committee of the China Labor Society
Shen Jianfeng
The year-end bonus is an incentive mechanism for employers to pay bonuses according to the year's operating conditions and the work performance of employees, which can take into account the overall operation of the enterprise and can also provide long-term incentives to employees, which is widely used in the current employment management practice. Due to the long-term characteristics of the year-end bonus itself, disputes caused by the unclear rules of the year-end bonus of some employers or various adjustments in the employment process are relatively high. For employers, it is of positive significance to improve the rules of year-end bonuses, reasonably set up reward conditions, assessment procedures, and reward rules under special circumstances, etc., to give full play to the incentive role of year-end bonuses and prevent labor disputes.
In practice, the employer is not clear about the conditions or procedures for awarding the year-end bonus, or does not have any rules and arrangements for the year-end bonus. In this case, if it is considered that there are no rules to follow, the employer enjoys complete freedom to control the annual bonus, which is not conducive to protecting the reasonable expectations of the employee on the one hand, and on the other hand, it will indirectly encourage the employer not to set the annual bonus rules. Therefore, in this case, based on the fact that the employer has paid the year-end bonus for many consecutive years, the judge correctly allocated the burden of proof through the application of the rules of evidence, and supported the employee's claim for the year-end bonus when the two parties agreed on the conditions for the payment of the year-end bonus, but the employer did not provide any evidence for the reasons for not paying the year-end bonus, and the corresponding judgment was reasonable.
This case also involves a more fundamental issue: the extent to which the employer's employment management practices are future-oriented and binding, and can be the basis for the employee's right to make a claim. The labor relationship is a continuous legal relationship with strong trust and cooperation, and the expectations and trust of the parties are the basis for the benign operation of this legal relationship. For this reason, the employer's employment management practice has a very special position in the coordination of labor relations and the determination of the rights and obligations of the parties. Based on the employer's past practice of repeatedly paying the year-end bonus, this case analyzes the agreed content of the year-end bonus, and supports the employee's claim for the year-end bonus when the employer fails to provide evidence to prove its claim, which not only protects the rights and interests of the employee in the case and balances the interests of the employee and the employer, but also has enlightening significance for the adjudication of similar cases.