China: Legal Analysis And Advice On The Employee's Common Behavior Before And After Turnover

Last Updated: 6 January 2018
Article by Sunday Han, Xia Wu and Lili Wang

Holding the purpose of cancelling or terminating a labor contract with an employee, the employer would normally initiate a negotiation procedure. However, in most cases, the employee would not cooperate whilst bringing up various unreasonable or illegal requests, or worse, committing an infringement or a crime. Based on the employee's several common behaviors before and after the turnover negotiations, the writer gives the legal analysis and advice of it to benefit the reader.

I. The Employee Asks for a High Compensation or Brings Up Other Requests as Holding the Non-compliance Proof of the Enterprise or the Senior Executives

The writer have met loads of similar cases such as:

  1. A petroleum Company negotiating face-to-face with an employee while several others were asking for high compensation and threatening to complain to the Government's Environmental branch of the non-compliance behavior of the company;
  2. During a turnover negotiation, a financial staff raised that a complaint to the Tax Bureau would be made with proof if the compensation is not paid as requested;
  3. During a turnover negotiation with the GM assistant, the employee believed that he was treated unfairly and that the senior executive had a non-compliance behavior that was in conflict with the interest of the company; thus, he would complaint to the headquarters abroad or to the compliance department.

Dealing with such cases, the writer holds that the company shall, on the one hand, analyses and make a decision based on the legal rights of the employee, his true personal purpose and its relation with his behavior. On the other hand, the company shall investigate and evaluate the business and compliance risks combined with the facts the employee holds, and determine the next-step plan afterwards.

Firstly, the employee is entitled to repeal, complain and report. According to the Article 41 of The Constitution of the People's Republic of China: "Citizens of the People's Republic of China have the right to criticize and make suggestions regarding any state organ or functionary. Citizens have the right to make to relevant state organs complaints or charges against, or exposures of, any state organ or functionary for violation of the law or dereliction of duty; but fabrication or distortion of facts for purposes of libel or false incrimination is prohibited." In the Criminal Procedure Law of the People's Republic of China, the first paragraph of Article 108 sets that: "Any unit or person find criminal fact or criminal suspect, have the right as well as obligation to report or complaint to the police, people's prosecutor's office or people's court...". In the Interpretation of the Supreme People's Court on Several Issues about the Trial of Cases Concerning the Right of Reputation, Article 5 sets that the court would not accept the case when someone is accused of infringing another's right of reputation out of his or her accusation or complaint behavior to another.

Secondly, if the employee asks for a high compensation by threatening to enclose the non-compliance behavior of the company under the purpose of occupying the company's possession illegally with the cover of complaint or report, it is likely that his behavior constitutes a crime of extortion and blackmail. Extortion and blackmail mean to extort the public or the private property under the purpose of illegal possession by means of threatening or coercing the owner or the keeper of the public or the private property. The crime consists in the following:

  1. The actor has the purpose of owning other's property illegally;
  2. The actor implemented a behavior that extorts the property by means of threat or coercion, which is the main character of the crime of extortion and blackmail. There are various ways of threat or coercion, such as applying violence, enclosing private information, committing a crime, ruining one's reputation and so on. The form can be oral, written or transformed by the third party as it can be expressed directly or indirectly. As the actual time of occupying, it could be coercion the counterpart to give on the spot or within a definite duration;
  3. The amount is relatively large or it has been committed several times. According to the  Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues concerning the Application of Law in the Handling of Criminal Cases of Extortion, the Article 1 sets that "If the value of public and private property extorted is in the range of 2,000 yuan to 5,000 yuan or more, 30,000 yuan to 100,000 yuan or more, or 300,000 yuan to 500,000 yuan or more, it shall be determined as a "large amount," "huge amount," or "particularly huge amount" under Article 274 of the Criminal Law."

In judicial practice, there are many cases in which the employee is judged for committing the crime of extortion and blackmail. For instance, the former employee Xu of China Minsheng Bank threatened to enclose the customer information, extorted and blackmailed the bank for approximatively CNY 8,150,000 out of the dissatisfaction of the termination of his labor contract. As a result he was sentenced to seven years in jail for committing the crime of extortion and blackmail.

Third, if the enterprise considers the facts that the employee hold are not true once the investigation and assessment are made, it could communicate with him in order to acquire the relevant proof of threatening from the employee and settle the labor relationship properly. However if the facts are true, the enterprise should remedy immediately and deal with the situation according to law.

II. The Employee Publically Gives a Malicious Comment via Internet, Media, Blog, Mass Mailing or WeChat Groups

Holding the purpose of cancelling or terminating a labor contract with an employee, the employer would normally initiate a negotiation procedure. However, in most cases, the employee would not cooperate whilst bringing up various unreasonable or illegal requests, or worse, committing an infringement or a crime. Based on the employee's several common behaviors before and after the turnover negotiations, the writer gives the legal analysis and advice of it to benefit the reader.

I. The Employee Asks for a High Compensation or Brings Up Other Requests as Holding the Non-compliance Proof of the Enterprise or the Senior Executives

The writer have met loads of similar cases such as:

  1. A petroleum Company negotiating face-to-face with an employee while several others were asking for high compensation and threatening to complain to the Government's Environmental branch of the non-compliance behavior of the company;
  2. During a turnover negotiation, a financial staff raised that a complaint to the Tax Bureau would be made with proof if the compensation is not paid as requested;
  3. During a turnover negotiation with the GM assistant, the employee believed that he was treated unfairly and that the senior executive had a non-compliance behavior that was in conflict with the interest of the company; thus, he would complaint to the headquarters abroad or to the compliance department.

Dealing with such cases, the writer holds that the company shall, on the one hand, analyses and make a decision based on the legal rights of the employee, his true personal purpose and its relation with his behavior. On the other hand, the company shall investigate and evaluate the business and compliance risks combined with the facts the employee holds, and determine the next-step plan afterwards.

Firstly, the employee is entitled to repeal, complain and report. According to the Article 41 of The Constitution of the People's Republic of China: "Citizens of the People's Republic of China have the right to criticize and make suggestions regarding any state organ or functionary. Citizens have the right to make to relevant state organs complaints or charges against, or exposures of, any state organ or functionary for violation of the law or dereliction of duty; but fabrication or distortion of facts for purposes of libel or false incrimination is prohibited." In the Criminal Procedure Law of the People's Republic of China, the first paragraph of Article 108 sets that: "Any unit or person find criminal fact or criminal suspect, have the right as well as obligation to report or complaint to the police, people's prosecutor's office or people's court...". In the Interpretation of the Supreme People's Court on Several Issues about the Trial of Cases Concerning the Right of Reputation, Article 5 sets that the court would not accept the case when someone is accused of infringing another's right of reputation out of his or her accusation or complaint behavior to another.

Secondly, if the employee asks for a high compensation by threatening to enclose the non-compliance behavior of the company under the purpose of occupying the company's possession illegally with the cover of complaint or report, it is likely that his behavior constitutes a crime of extortion and blackmail. Extortion and blackmail mean to extort the public or the private property under the purpose of illegal possession by means of threatening or coercing the owner or the keeper of the public or the private property. The crime consists in the following:

  1. The actor has the purpose of owning other's property illegally;
  2. The actor implemented a behavior that extorts the property by means of threat or coercion, which is the main character of the crime of extortion and blackmail. There are various ways of threat or coercion, such as applying violence, enclosing private information, committing a crime, ruining one's reputation and so on. The form can be oral, written or transformed by the third party as it can be expressed directly or indirectly. As the actual time of occupying, it could be coercion the counterpart to give on the spot or within a definite duration;
  3. The amount is relatively large or it has been committed several times. According to the  Interpretation of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues concerning the Application of Law in the Handling of Criminal Cases of Extortion, the Article 1 sets that "If the value of public and private property extorted is in the range of 2,000 yuan to 5,000 yuan or more, 30,000 yuan to 100,000 yuan or more, or 300,000 yuan to 500,000 yuan or more, it shall be determined as a "large amount," "huge amount," or "particularly huge amount" under Article 274 of the Criminal Law."

In judicial practice, there are many cases in which the employee is judged for committing the crime of extortion and blackmail. For instance, the former employee Xu of China Minsheng Bank threatened to enclose the customer information, extorted and blackmailed the bank for approximatively CNY 8,150,000 out of the dissatisfaction of the termination of his labor contract. As a result he was sentenced to seven years in jail for committing the crime of extortion and blackmail.

Third, if the enterprise considers the facts that the employee hold are not true once the investigation and assessment are made, it could communicate with him in order to acquire the relevant proof of threatening from the employee and settle the labor relationship properly. However if the facts are true, the enterprise should remedy immediately and deal with the situation according to law.

II. The Employee Publically Gives a Malicious Comment via Internet, Media, Blog, Mass Mailing or WeChat Groups

In practice, during the negotiation process, even when the labor contract is terminated, it is possible to witness employers as well as senior executives and colleagues being humiliated, or slandered, via Internet, message, WeChat group, WeChat moments, QQ group, blog or media, all to achieve a revenge goal. The behavior aforementioned could easily violate the labor discipline of the company, or even infringe the right of reputation of the targeted person or company.

The writer will hereby analyses what is the right of reputation, the way to protect it, the common behavior that infringes it, as well as its components in order to give his advice:

I. What is the right of reputation?

It is widely acknowledged that the right of reputation is that the people, the legal person or other civil subject have the right of their social appraisal and are entitled to prevent others from infringing it. The infringe of the reputation is to harm the people, the legal person or other civil subject's reputation by means of humiliate or slander and lower the victim's social appraisal.

ii. How to protect it?

In the General Principles of the Civil Law of the People's Republic of China, Article 101 sets that "Citizens and legal persons shall enjoy the right of reputation. The personality of citizens shall be protected by law, and the use of insults, libel or other means to damage the reputation of citizens or legal persons shall be prohibited." In the Notice of the Supreme People's Court on Issuing the Opinions on Several Issues concerning the Implementation of the General Principles of the Civil Law of the People's Republic of China (For Trial Implementation), Article 160 sets  "publicize other's privacy in oral or in written, fabricate facts to uglify other's personality, or harm other's reputation by means of humiliate or slander, and caused certain impact, should be deemed of the behavior of infringing the right of people's reputation. Defame or slander a legal person's reputation causing damage, shall be deemed of infringing the right of legal person's reputation."

iii. The common behavior that infringes the right of reputation

The definition of humiliation or slander is not ruled clearly. However, humiliating means defaming other's personality or harm other's reputation publicly in written or by oral and slandering means spreading fabricated facts and hurting others maliciously in order to lower one's social appraisal, to infringe other's right of reputation.

iv. The components

In the Answer to the Several Questions on Hearing the Reputation Right Case of the Supreme Court, it is set that, the responsibility for the infringement of one's right of reputation shall be based on whether there are facts attesting that the right of reputation has been harmed, that the actor has been behaving illegally; if there is a causal relation between the illegal behavior and the harm, the actor is subject to fault.

v. Advice

When dealing with such circumstances, the writer advices the enterprise to grasp the points below:

Firstly, collect and maintain the proof in time. Considering that most of the proof are electronical and could easily be modified or lost while the employee is making the remarks via Internet, the media, the blog, mass mailing or the WeChat group. The enterprise shall keep the proof in time through recording, screen capture or notarization when finding out the employee may be committing an infringement.

Secondly, as for the incumbent, the enterprise can assess whether the employee has consisted a misconduct of the discipline combined with the facts, the inner rules and the proof. If the employee's behavior constitutes a severe misconduct, the employer may consider to terminate the labor contract for severe misconduct or persuade him to resign.

Thirdly, as for the left, if the circumstances and the impact are minor, the employer may a lawyer's letter to the employee in order to avoid worse results; if the circumstances and the impact are material, the employer may consider to initiate the corresponding legal procedure. If the victim is other employee instead of the enterprise, the subject to arise a lawsuit should be the very person.

To conclude, the employee could adopt some unreasonable or illegal actions based on his or her personal interest or emotion before or after the turnover negotiation, which brings certain troubles or risks to the employer. The enterprise is advised to communicate with the professional lawyer before the turnover negotiation, design a detailed plan to balance both party's interest and manage the labor relation properly to lower the legal risks to the enterprise's reputation.n practice, during the negotiation process, even when the labor contract is terminated, it is possible to witness employers as well as senior executives and colleagues being humiliated, or slandered, via Internet, message, WeChat group, WeChat moments, QQ group, blog or media, all to achieve a revenge goal. The behavior aforementioned could easily violate the labor discipline of the company, or even infringe the right of reputation of the targeted person or company.

The writer will hereby analyses what is the right of reputation, the way to protect it, the common behavior that infringes it, as well as its components in order to give his advice:

i. What is the right of reputation?

It is widely acknowledged that the right of reputation is that the people, the legal person or other civil subject have the right of their social appraisal and are entitled to prevent others from infringing it. The infringe of the reputation is to harm the people, the legal person or other civil subject's reputation by means of humiliate or slander and lower the victim's social appraisal.

ii. How to protect it?

In the General Principles of the Civil Law of the People's Republic of China, Article 101 sets that "Citizens and legal persons shall enjoy the right of reputation. The personality of citizens shall be protected by law, and the use of insults, libel or other means to damage the reputation of citizens or legal persons shall be prohibited." In the Notice of the Supreme People's Court on Issuing the Opinions on Several Issues concerning the Implementation of the General Principles of the Civil Law of the People's Republic of China (For Trial Implementation), Article 160 sets  "publicize other's privacy in oral or in written, fabricate facts to uglify other's personality, or harm other's reputation by means of humiliate or slander, and caused certain impact, should be deemed of the behavior of infringing the right of people's reputation. Defame or slander a legal person's reputation causing damage, shall be deemed of infringing the right of legal person's reputation."

iii. The common behavior that infringes the right of reputation

The definition of humiliation or slander is not ruled clearly. However, humiliating means defaming other's personality or harm other's reputation publicly in written or by oral and slandering means spreading fabricated facts and hurting others maliciously in order to lower one's social appraisal, to infringe other's right of reputation.

iv. The components

In the Answer to the Several Questions on Hearing the Reputation Right Case of the Supreme Court, it is set that, the responsibility for the infringement of one's right of reputation shall be based on whether there are facts attesting that the right of reputation has been harmed, that the actor has been behaving illegally; if there is a causal relation between the illegal behavior and the harm, the actor is subject to fault.

v. Advice

When dealing with such circumstances, the writer advices the enterprise to grasp the points below:

Firstly, collect and maintain the proof in time. Considering that most of the proof are electronical and could easily be modified or lost while the employee is making the remarks via Internet, the media, the blog, mass mailing or the WeChat group. The enterprise shall keep the proof in time through recording, screen capture or notarization when finding out the employee may be committing an infringement.

Secondly, as for the incumbent, the enterprise can assess whether the employee has consisted a misconduct of the discipline combined with the facts, the inner rules and the proof. If the employee's behavior constitutes a severe misconduct, the employer may consider to terminate the labor contract for severe misconduct or persuade him to resign.

Thirdly, as for the left, if the circumstances and the impact are minor, the employer may a lawyer's letter to the employee in order to avoid worse results; if the circumstances and the impact are material, the employer may consider to initiate the corresponding legal procedure. If the victim is other employee instead of the enterprise, the subject to arise a lawsuit should be the very person.

To conclude, the employee could adopt some unreasonable or illegal actions based on his or her personal interest or emotion before or after the turnover negotiation, which brings certain troubles or risks to the employer. The enterprise is advised to communicate with the professional lawyer before the turnover negotiation, design a detailed plan to balance both party's interest and manage the labor relation properly to lower the legal risks to the enterprise's reputation.

Originally published 19 October 2017

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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