• Area of Law： Trade Unions
• Level of Authority： Local Judicial Documents
• Date issued：05-26-2014
• Effective Date：05-26-2014
• Status： Effective
• Issuing Authority： Other Institutions of Guangzhou City

Conference Minutes of the Guangzhou Intermediate People's Court on Several Issues Concerning the Trial of Labor and Personnel Dispute Cases
（May 26, 2014）
The Guangzhou Court of Labor and Personnel Dispute Arbitration and the Civil Division of the Guangzhou Intermediate People's Court have conducted discussion on several issues in the handling of labor and personnel dispute cases and reached consensus on some issues. The minutes are hereby provided as follows:
I. Labor disputes
1. Procedural issues
(1) The request of the employee for the employer to disclose the method and base for calculation of such employee's salaries shall not fall within the scope of the cases to be handled through labor arbitration.
(2) A dispute between the employee and the employer over whether or not the employee satisfies the conditions for retirement shall not fall within the acceptance scope of labor dispute cases. If, on the ground thereof, the employee asserts the continuation of the performance of the labor contract or compensation for loss, etc., such assertion shall be conditioned on the examination result of the social insurance institution and the arbitration commission or the people's court shall not decide whether or not the employee satisfies the conditions for retirement directly in the labor dispute case.
(3) The limitation for cases involving confirmation of labor relationship shall be governed by the provisions in Article 27 of the Law on Mediation and Arbitration of Labor Disputes.
(4) Article 21 of the Law of the People's Republic of China on Mediation and Arbitration of Labor disputes clearly provides for the jurisdiction over the cases involving labor disputes. Therefore, employers and employees shall not stipulate on the jurisdiction regarding the labor dispute arbitration at their discretion.
(5) In the case of illegal defaulting or embezzling the employee's salaries by the employer without reason, if such act occurred one year prior to the employee's application for arbitration and is not corrected by the employer at the time of arbitration application by the employee and the employee therefore asserts the termination of the labor contract and require the employer to pay financial compensation for such termination, such assertion shall be upheld.
If the employer has paid the outstanding labor remuneration due and payable to the employee prior to the employee's application for arbitration, the employer shall be deemed as having corrected its above illegal act. In such case, if the employee, on the grounds that the employer has committed illegal act, asserts termination of the labor contract and requires the payment of financial compensation for such termination, such assertion and request shall not be upheld.
(6) If the employer implements contract-based operation and the contractor that engages the employee in work is not qualified as an employer, the contractor shall be involved in the case involving the work-related injury benefits after the work-related injury of the employee is ascertained provided that the facts cannot be ascertained without the contractor being involved or the contractor needs to bear liability.
(7) If the employer's address in the industrial and commercial registration does not exist actually but the staff members of the employer can be reached by phone calls, relevant materials may be served personally or by post to the registered address of such employer if it refuses to go to the court to collect the materials. Service by announcement may be adopted if the service is not successful by using the aforementioned methods.
2. Issues of work-related injury and occupational diseases
(8) If the employee gets injured within less than one month of his or her employment before the employer has time to pay work-related injury insurance for the employee, the standard for payment of work-related injury compensation shall be determined based on the amount of the salary agreed upon by both parties or the amount of the monthly salary calculated according to the amount of the salary already paid. If both parties fail to agree upon or to clearly agree upon the salary, the matter may be handled in accordance with the provisions in Article 44 of the Regulations of Guangdong Province on Payment of Salaries. That is, the matter may be handled by reference to the average salary of the employees at the same post of the employer or the local average salary of the on-the-job workers.
(9) Article 57 of the Law of the People's Republic of China on Prevention and Control of Occupational Diseases provides that the employer shall provide appropriate post allowance to the employees who are engaged in the operation exposed to occupational disease hazards. Given that post allowance is not an item that must be specified in salary structure, the request of the employee for the employer to pay post allowance on the ground of the said provision shall not be upheld unless the post allowance is expressly agreed upon by both parties.
(10) If the employee suffering work-related injury claims the payment of costs in connection with continuous treatment or recrudescence of the work-related injury, etc. after such employee has terminated the labor relationship and the work-related insurance relationship with the employer, such request shall not be upheld in principle, provided that the agreement on the expenses on follow-up treatment between the employer and the employee, if any, shall be followed.
If the employee who suffers work-related injury and is assessed as having a disability between degree 5 and degree 10 falls under any of the circumstances specified in Article 39 of the Labor Contract Law, the employer may terminate the labor contract, but shall strictly follow the applicable standards and pay one-off work-related injury insurance benefits at the same time.
If the employee who suffers work-related injury and is assessed as having a disability between degree 5 and degree 10 incurs follow-up treatment expenses due to removal of internal fixation according to the doctor's diagnosis and advice and claims the payment of such expenses after leaving office and receiving one-off work-related injury benefits, such claim shall not be upheld in principle, unless the employee's labor relationship with the employer is revoked by the employer illegally within the time of the doctor's advice.
The employer or the social insurance fund shall not pay the work-related medical treatment expenses exceeding the payment scope of the social insurance fund in principle. If the employer and the employee have agreement in this regard, the agreement shall be followed.
(11) If the employee, at the time of filing the claim for work-related injury compensation, makes request to the employer for revoking the labor relationship on the grounds that the employer has failed to get him involved in the social insurance and thus claims financial compensation for termination of the labor contract, both claims shall be upheld in accordance with Article 23 of the Regulations on Implementation of the Labor Contract Law of the People's Republic of China and Articles 38 and 46 of the Labor Contract Law of the People's Republic of China.
3. Competition restriction issues
(12) If the agreement on compensation for competition restriction does not provide for financial compensation and liquidated damages, the employee may excise the right of defense and decide at his or her discretion whether to perform the competition restriction obligation given that the compensation for competition restriction is the consideration for the employee to perform the competition restriction obligation. If the financial compensation is not stipulated while the liquidated damages is specified and the employee fails to perform or violates the competition restriction obligation, the assertion of the employer for the employee to pay the liquidated damaged as agreed shall not be upheld.
(13) Where, during the period of competition restriction, the employee requests the employer to additionally pay three-month financial compensation for competition restriction at the time of the employer's request for termination and the termination of the competition restriction agreement, such circumstances fall within the rights and obligations derived from the labor relationship and shall be accepted for labor arbitration in accordance with Article 2 of the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes.
(14) Upon concurrence of the liability for breach of the competition restriction and the liability for damages for infringement, if both parties have agreed upon the liquidated damages, such liquidated damages clause shall be applied in the first place; the liquidated damages that is excessively lower or higher than the resulting actual loss may appropriately adjusted. If both parties fail to stipulate the liquidated damages, the liability for compensation shall be determined according to actual loss.
(15) If the labor contract is terminated because the employee reaches the statutory retirement age, the competition restriction clause in the labor contract remains to be binding on the retired employee and the employee that has performed the competition restriction obligation remains to be entitled to the compensation for competition restriction.
(16) If the employer and employee agree that compensation for competition restriction shall be paid in lump sum in advance after rescission or termination of the labor contract, such agreement may be determined to be valid provided that it reflects the true intention of the both parties and does not violate the compulsory provisions of laws and regulations.
(17) In a dispute over competition restriction, the request of the former employer for the new employer to revoke the labor relationship with the employee shall not be upheld. However, the people's court shall uphold the request of the former employer for the employee to continue to perform the competition restriction obligation as agreed upon.
4. Issues of financial compensation, damages and termination of labor contract
(18) If the employee claims the financial compensation for termination of the labor contract and it is ascertained upon trial that the employer is required to pay damages due to its illegal termination of the labor contract, the court may uphold the payment of financial compensation. If the employee claims the damages for termination of the labor contract and the facts ascertained during the court hearing determines that the employer is required to pay financial compensation, the court may directly decide to uphold the payment of financial compensation.
(19) The salaries payable for failure to take annual leave shall be included in the base number for calculating financial compensation. In the case of payment of salary to the employee for his or her failure to take annual leave, if the corresponding period for the payment crosses twelve months prior to the termination of his or her employment, such salary shall be included in the average salary proportionally and it is not appropriate to include such salary in full in the average salary of the twelve months prior to the termination of his or her employment.
(20) If the employee is identified to lose the capacity for work completely due to the injury not caused by work and the employer is unable to handle the formalities for his or her retirement or quitting of work, the employer may terminate the labor relationship with the employee provided that such situation does not fall within any of the circumstances where termination of labor relationship is prohibited as prescribed in Article 42 of the Labor Contract Law of the People's Republic of China and provided that the employer is required to pay financial compensation or medical treatment subsidies.
(21) If the employee and the employer have reached the agreement on the intent of employment but the agreement is not performed due to the breach of the agreement by one party prior to the establishment of labor relationship, any dispute between both parties shall not be a labor dispute because the employer has not actually engaged the employee in work and the labor relationship between both parties has not been established.
5. Issue of performance of labor contract
(22) If the labor contract executed by the employer and the employee provides only for the period and labor remuneration and does not have all necessary clauses required under Article 17 of the Labor Contract Law of the People's Republic of China, it may be deemed that both parties have executed the labor contract and the employer is not required to pay twice the salary to the employee for failure to execute a written labor contract. In addition, the above valid terms of the labor contract shall be binding on both parties.
(23) Article 22 of the Forum Minutes of the Guangdong High People's Court and Guangdong Labor and Personnel Dispute Arbitration Commission on Several Issues Concerning the Trail of Labor and Personnel Dispute Cases (Yue Gao Fa [2012] No. 284) does not exclude the provision of the Labor Law of the People's Republic of China and the Labor Contract Law of the People's Republic of China that the modification to the labor contract shall be subject to consensus upon consultation. For the purpose of that article, the “needs of production and business operation” shall be determined based on the analysis of specific cases. In general, where the employer has an objective need of adjustment and does not use such adjustment to create barrier for the employee or force the employee to leave the job, such need may be deemed as need for production and business operation. The burden of proving the salary level shall be borne by the employer.
6. Salary issue
(24) If the employer arranges pre-job training for the employee after they have executed the written labor contract, both parties may be deemed to have established labor relationship considering that the pre-job training is arranged by the employer for the employee and the salary for the training period shall be paid according to the agreement between both parties.
(25) If the employee and the employer have executed, prior to the arbitration application, the agreement which states that the employee “shall not assert rights against the employer” and that “neither party shall have any financial liability to the other party after the execution of the agreement” but fails to expressly provide for the items such as the salary, double pay in the case of failure to execute a written labor contract, overtime pay and high temperature allowance or only provides for some of the items and the employee applies for arbitration regarding the items specified and the items not specified, examination shall be conducted as to whether the agreement is revocable and whether it includes the matter for which the employee applies for arbitration. If the matter for which the employee applies for arbitration is included in the agreement and the agreement is not revocable, the autonomy of the parties shall be respected and the agreement executed by both parties shall be deemed to be valid.
(26) If the employer arranges for the employee to work overtime, the overtime wage for a normal working day, rest day or statutory holiday shall be paid in an amount not less than 150%, 200% or 300% of the wage for normal working hours. Specifically, statutory holidays are paid holidays and the overtime wages for statutory holidays do not include the normal salaries of the employee.
(27) As to the issue whether the damages for illegal termination of the labor contract claimed by the employee whose monthly salary is more than three times the average monthly salary of the local employees should be subject to relevant provisions on three times the payment and not exceeding twelve years, in accordance with the provisions of Articles 47 and 87 of the Labor Contract Law of the People's Republic of China, the financial compensation shall be paid at the rate of three times the average monthly salary of the local employees with the number of years involved not exceeding twelve years and the damages payable shall be calculated at two times the financial compensation determined above.
7. Issue of labor dispatch
(28) Labor dispatch is a special form of employment. The labor dispatching entity, as the employer, shall perform the obligations of employers towards employees. Therefore, employment through labor dispatching is governed by the provisions on execution, performance, change, rescission and termination of a labor contract and other general provisions under the Labor Contract Law as well as the provisions on a labor contract without fixed term under Article 14 of the Labor Contract Law.
(29) According to relevant provisions of the law, the labor dispatching entity, as the employer, shall be responsible for paying social insurance and salaries, etc. and the labor using entity shall be responsible for paying overtime wage and benefits, etc. In a case involving the dispute over labor dispatching, it is not appropriate to apply joint and several liability without exception and the decision for the employer and the labor using entity to bear joint and several liability must be based on explicit provisions of the law or explicit agreement. In accordance with Article 92 of the Labor Contract Law of the People's Republic of China, for the lawful labor dispatching, in principle the employer shall bear joint and several liability regarding the liability of the labor using entity and the labor using entity shall not bear joint and several liability regarding the liability of the employer.
8. Issues involving foreign enterprises and foreigners
(30) A foreigner holding the Certificate of Foreign Experts and the Employment Pass for Foreign Experts shall be deemed as an employee reaching the statutory retirement age if the foreigner has reached the statutory retirement age of China or has already received pension in the host country and his or her service relationship with the employer within China is not labor relationship.
9. Other issues
(31) The “employer that has established a trade union organization” stated in Article 12 of the Interpretation on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (4) promulgated by the Supreme People's Court shall refer to an employer that has established its own trade union organization.
(32) After the implementation of the Social Insurance Law, if an on-job employee passes away due to sickness or reasons other than work, the employer shall pay three benefits in accordance with the Interim Provisions of Guangdong Province on Holiday Treatment and Bereavement Treatment for Employees. Specifically, the funeral allowance and bereavement payment shall be paid from social insurance fund and one-off relief allowance for supporting the lineal relatives shall be paid by the employer. Because the Social Insurance Law provides for the treatment for the death caused by reasons other than work from the perspective of social insurance only, it does not prohibit local governments from providing for the payment responsibility of employers in respect of the treatment for the death caused by reasons other than work. Therefore, the above Interim Provisions of Guangdong Province remains valid at present.