ARTICLE
1 December 2020

Judging Opinions Of Beijing Courts On Disputes Regarding The Twice Salary For Failure To Enter Into Non-Fixed Term Employment Contract

AB
AnJie Broad Law Firm

Contributor

AnJie Law Firm is a full-service law firm providing commercial legal services on an international basis. Our highly experienced lawyers have substantive skills and serve a broad base of practice areas including insurance & reinsurance, intellectual property, antitrust & competition, private equity, dispute resolution, mergers & acquisitions, capital markets, banking & finance, energy and natural resources and real estate.
To safeguard the legitimate rights and interest of employees and the stability of employment relationship, and in light of the prevalence of short-term employment contracts, the Labour Contract Law, promulgated in 2008, ...
China Employment and HR

To safeguard the legitimate rights and interest of employees and the stability of employment relationship, and in light of the prevalence of short-term employment contracts, the Labour Contract Law, promulgated in 2008, defines expressly the conditions for entering into non-fixed term employment contracts. If an employee falls within the circumstance, as provided by Article 14 Paragraph 2 of the Labour Contract Law, where the employee has worked 10 years in a row for an employer or has entered into 2 consecutive employment contracts with an employer, and such employee proposes or agrees to enter into or renew the employment contract, the employer shall enter into a non-fixed term employment contract with the employee, except where the employee requires to enter into a fixed-term employment contract instead. Besides, Article 14 Paragraph 3 of the Labour Contract Law clearly defines the circumstance where a non-fixed term employment contract shall be deemed concluded. According to this Article 14 Paragraph 3, "where an employer fails to enter into a written employment contract with an employee for one year since the date of employment, a non-fixed term employment contract shall be deemed to have been concluded between the employer and the employee."

Meanwhile, to ensure the strict implementation of the above provisions, the Labour Contract Law further provides that "where an employer fails to enter into a non-fixed term employment contract with an employee in violation of this Law, such employer shall pay the employee twice his salary on a monthly basis since the date where a non-fixed term employment contract shall be concluded."

In judicial practice, arbitrations and litigations for disputes over the "twice salary for failure to enter into non-fixed term employment contract" arise frequently and in different situations. This article will describe and analyze such disputes based on the existing laws, the judging opinions of Beijing courts, and typical judgments.

I The employer shall have entered into a non-fixed term employment contract with the employee, but failed to sign a written employment contract with the employee.

In such circumstance, the employee has met the conditions for entering into a non-fixed term employment contract, and the employer shall have signed the non-fixed term employment contract with the employee in writing but failed to do so. The employer even failed to sign a fixed-term labour contract with the employee. The employee continues to work for the employer even after the expiration of his previous fixed-term employment contract. If the employee requests the employer to pay twice his salary for the employer's failure to enter into an employment contract, according to the judicial practices in Beijing, the arbitration committee and the court usually will support the employee's request. The following issues in relevant cases should also be noted.

  1. Whether the employee has clearly proposed the signing of a non-fixed term employment contract to the employer at the expiration of his fixed-term employment contract will not be taken into consideration by the arbitrators or judges.
    In Beijing Rongsheng Dayuan Equipment Installment Engineering Co., Ltd vs. Zhao Baoping, Labour Dispute ([2018] Jing 03 Min Zhong No. 8811), the court held that "Zhao Baoping has concluded two consecutive fixed-term employment contracts with the company and the last employment contract has expired on 27 January 2016, therefore, the company shall have entered into a non-fixed employment contract with Zhao on the date immediately following the expiration date, i.e. 28 January 2016. Article 82 Paragraph 2 of the Labour Contract Law provides that where an employer fails to enter into a non-fixed term employment contract with the employee in violation of this Law, such employer shall pay the employee twice his salary on a monthly basis since the date where a non-fixed term employment contract shall be concluded." For cases like this, if the employee has met the conditions for entering into a non-fixed term employment contract and continues to work for the employee after the expiration of his previous fixed-term employment contract, the court tends to support that the employer shall be obliged to initiatively enter into a non-fixed term employment contract with the employee, regardless whether the employee has clearly proposed to do so.
  2. When making judgment, the court will review whether the employee is liable for the failure to enter into a non-fixed term employment contract after the expiration of his previous fixed-term employment contract, provided however that such liability shall be proven by the employer with sufficient evidence. In Beijing Yiqizou Management Consulting Co., Ltd vs. Cui Yueqin, Labour Dispute ([2019] Jing 02 Min Zhong No. 5853), the employer claimed that it had notified the employee to sign the employment contract but the employee failed to do so; in Huarong Building vs. Ding Fan, Labour Dispute ([2017] Jing 01 Min Zhong No. 5036), the employer claimed to have notified the employee that the signing of the employment contract had to be postponed by the formalities for applying for special working hour system, which the employee had agreed. In both cases, the courts held that the evidence provided by the employer were not sufficient to prove their claims.
  3. In the cases where the courts award against the employer twice salary for failure to enter into an employment contract, the court tends to adopt the fixed remuneration (excluding flexible commission, bonus and overtime pay, etc.) of the employee during normal working hours in the relevant months as the base for the calculation of the twice salary. See Beijing Da Bei Nong Animal Healthcare Science and Technology Co., Ltd vs. Cong Rigang, Labour Dispute ([2019] Jing 03 Min Zhong No. 1386).

II The employer shall have entered into a non-fixed term employment contract with the employee, but signed a fixed-term employment contract with the employee.

In such circumstance, Beijing courts tend to believe that unless the employee could prove the fixed-term employment contract was signed against his true will, the employee, who has signed on the fixed-term employment contract, shall be deemed to have waived the right to enter into a non-fixed term employment contract; the employee shall take legal responsibilities for his acts, therefore, the employee's claim of twice salary for the employer's failure to enter into a non-fixed term employment contract shall not be supported. See Zhou Liangquan vs. China Railway International Group Co., Ltd, Labour Dispute, Retrial ([2017] Jing Min Shen No. 816), where Beijing High People's Court rejected the employee's request of twice salary.

Besides, if the employee requests to change the signed fixed-term employment contract to a non-fixed term employment contract, he shall consult with the employer, and may do such change only upon mutual agreement with the employer, otherwise, the employee shall perform the signed fixed-term employment contract until the expiration thereof. Upon the expiration of such fixed-term employment contract, the employee shall have the right to request the employer to, and the employer shall, enter into a non-fixed term employment contract with him. See Zheng Zhongyou vs. Beijing Yun Ye Mining Co., Ltd, Labour Dispute ([2017] Jing 0118 Min Chu No. 8480).

It should be noted that, in some rare cases, although the employer has signed a fixed-term employment contract with the employee, the court held that since the employee had met the statutory conditions for signing a non-fixed term employment contract, the employer shall pay twice salary for failure to sign a non-fixed term employment contract. See Beijing Tongcheng Hongye Trading Co., Ltd vs. Tao Youjian, Labour Dispute, Retrial ([2015] Gao Min Shen Zi No. 02450). According to our case study, such judging opinion is not common in judicial practice in Beijing.

III A non-fixed term employment contract had been deemed signed, but the employer failed to sign a written employment contract or the employer signed a fixed term employment contract thereafter.

According to Article 14 Paragraph 3 of the Labour Contract Law and Article 7 of the Implementation Rules of the Labour Contract Law, where an employer fails to enter into a written employment contract with an employee for one year since the date of employment, a non-fixed term employment contract shall be deemed to have been concluded between the employer and the employee, and the employer shall promptly sign the employment contract with the employee in writing.

In the case where a non-fixed term employment contract is deemed concluded, if the employer failed to sign the employment contract with the employee in writing, the employee's request of twice salary for failure to enter into a non-fixed term employment contract usually will not be supported by Beijing courts. See Kong Zhenyu vs. Beijing Yaocheng Construction and Decoration Engineering Co., Ltd, Labour Dispute, Retrial ([2018] Jing Min Shen No. 33), and Liu Daiquan vs. Warburg Co., Ltd, Labour Dispute, Retrial ([2017] Jing Min Shen No. 4650), where Beijing High People's Court rejected the employees' request of twice salary.

If the employer and the employee signed the employment contract in writing with fixed term, Beijing courts tend to believe that both parties have agreed on the signing of a fixed-term employment contract, instead of a non-fixed term employment contract, therefore, the employee's request of twice salary for failure to enter into a non-fixed term employment contract shall not be supported. See Li Jinhu vs. Beijing Yiyuanju Property Management Co., Ltd, Labour Dispute ([2017] Jing 0108 Min Chu No. 3164), and Zhang Gaosheng vs. Beijing Rishang Industrial and Trading Co., Ltd, Labour Dispute, Appeal, ([2016] Jing 02 Min Zhong No. 7955), where the courts rejected the employees' claim of twice salary.

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.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More