Professional Interpretation

Abstract: the ex-employee who was in charge of human resource fails to sign a labor contract, if the double compensation rule applies? The Labor Contract Law of the People's Republic of China (“labor contract law”) states that Where an employing unit fails to conclude a written labor contract with a worker for more than a month but less than a year from the date it starts employing him, it shall pay the worker two times his salary for each month. The DOCVIT dispute resolution team would analyze it from the practice

I. Precedent

May 1^st, 2015, Mr. W was employed by a technology company in Guangzhou as manager of human resource. March 9, 2015, the company announced a decision to fire Mr. w at the staff meeting, where the dispute arise. Mr. W filed for the labor arbitration, requiring the company to pay double amount of salary during the period of employment. The arbitration court supported most of the Mr. W’s claims. Both parties are unsatisfied with the result thus bring lawsuit to the court.

The first instance court ruled that the company shall compensate Mr. W for amount of double salary. The company then brought appeal to the second instance court. The second instance court rescinded the previous judgment against the company. The court opined, according the labor law article 82, where an employing unit fails to conclude a written labor contract with a worker for more than a month but less than a year from the date it starts employing him, it shall pay the worker two times his salary for each month. Where an employing unit fails to conclude an open-ended labor contract with a worker in violation of the provisions of this Law, it shall pay the worker two times his salary for each month, starting from the date on which an open-ended labor contract should be concluded (double salary compensation rule). However, in this case, Mr. W was the manager of human resource, unlike the normal employee, the main job content for him is to sign the labor contract with new employees representing of the company. Therefore, when it comes to his own labor contract, he is also responsible for signing it. In the case that he fails to prove that he has requested company to sign the contract, he shall bear the main responsibility of not signing it. Mr. W fails to prove that fault of not signing contract is on company, instead, it is cause by his own neglect. Therefore, there is no sufficient evidence supporting that double salary compensation, thus the court is obliged to overrule the first instance judgment.

I I. Issue on Dispute

As to whether or not the human resource manager is able to request the double salary compensation when he didn’t sign a contract with the company, there is a divergence in judicial practice on this issue. One view is no matter which position the employee was in, as long as the company didn’t sign a contract with her, the employee has the right to request for double salary compensation. Since the law doesn’t rule differently according the employee’s position as well there is no exclusion rule for human resource manager, there is no reason the human resource manager become an exception of labor law. Also to rebut the view that the human resource manager is responsible to sign the contract, the supporters argue that as an agent of the company, the human resource manage is unable to represent both parties of contract.

The other view is the court should not support the human resource manager’s request for double salary compensation. Unlike normal employee, to sign the labor contract is included in job responsibility of the human resource manager. It is against the judicial logic that he is better off by not carrying the job duty.

From the result of the above precedent, the court tend to adapt the second view. The matter of fact that both parties didn’t sign the labor contract in this case, doesn’t lead to the support of double salary compensation based on the logic that the human resource manager cant gain more benefit by inaction.

The other court in Shenzhen is a follower of the first view. In the labor dispute between M glasses company and Mr. Y, the court believe, the M glasses company shall arrange other manager to sign the contract with Mr. Y, despite there is no specific rulings on who shall be the agent to sign the labor contract, it is clear to see that one person is not allow to represent both company and himself at the same transaction where they are opposing sides. Therefore, the company shall arrange another employee as an agent to sign the contract. Also, the labor contracts of human resource related employees should be put in different custody than the normal one.

The local administrative rules vary too. Zhong shan court rules specifically that burden of proof is on the employer who was in human resource related position, which means the employer need to submit evidence to prove he is not in charge of signing labor contact before dismiss. Other courts state that the burden of proof is on the employer. In another word, the court support the double salary compensation claim only when the employer company fail to prove that the employee was in charge of signing labor contract.

III. Conclusion

In conclusion, pursuant to relevant legal rules and the real practice, DOCVIT dispute team believes that whether or the court would grant the double salary compensation shall be analyzed case by case. Such claims for double salary compensation according to the labor law article 82 by legal representatives, is usually unsupported by the court. When it is the senior executive who claim, such claims are usually supported, with the exception that the company could prove that it is the senior executive duty to sign the contract. Of course, the double salary compensation is also supported that if the proposal to sign the labor contract is refused by the company.