PRC: Employment Disputes – Social Insurance and Senior Employees

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Navigating employment disputes in China can be a complex task, given the evolving interpretations of law and the wide variety of local practices. In this update, we look at three cases on social insurance and termination of senior employees’ employment.

Statute of limitations on social insurance recovery

Case Summary:

Employee H joined Company A before 2009, but it was not until December 2009 that the company began contributing to the mandatory social insurance for H. In October 2012, H lodged a complaint with the local labour authority (the Human Resources and Social Security Bureau), demanding that Company A make up the shortfall. When the local authority decided not to investigate, H initiated a lawsuit.

Case Analysis:

The High People’s Court of Guangdong Province dismissed H’s claim. The court referred to Article 20 of the Regulations on Labour Security Supervision, which stated that if a violation of labour security laws, regulations, or rules was not discovered or reported within two years, the labour security authority would no longer pursue the case.

In this case, evidence showed that Company A began contributing to H’s social insurance from December 2009. Therefore, H should have lodged his complaint about the non-payment or underpayment of social insurance before December 2009 by December 2011. However, H did not file his complaint until October 2012, exceeding the statutory limitation period. As a result, the local authority’s decision to no longer investigate H’s complaint was deemed appropriate.

However, it is worth noting that similar cases may yield different rulings in other regions. For instance, in Beijing, courts tend to view the social insurance authority’s order for employers to make up the social insurance shortfalls as a social insurance audit action, instead of a labour security supervision action, so Article 20 of the Regulations on Labour Security Supervision does not apply. Employers are expected to make up for all underpaid social insurance, even if the underpayment dates back two years or more.

Double salary for senior employees

Case Summary:

In August 2013, Cui joined Company B as Deputy General Manager, also serving as the head of the Human Resources Department. He left the company in August 2014. During his tenure, no written employment contract was signed. Cui claimed that Company B violated the law by not concluding a written employment contract and demanded double the salary for the period from September 2013 to July 2014.

Case Analysis:

The court did not support Cui’s claim.

The focus of this case lies in whether the requirement of double salary for failure to conclude a written employment contact applies to Cui as a senior employee. As per Article 82 of the Employment Contract Law, if an employer fails to conclude a written employment contract with the employee more than a month but less than a year from the date of employment, it should pay the employee twice their monthly salary as compensation. Generally, this provision applies to both rank-and-file and senior employees.

However, in this case, Cui was also the head of the department responsible for human resources. The court held that as Cui’s duties included signing and managing employment contracts, the responsibility for failure to conclude a written employment contract lay with him. Therefore, the employer did not need to pay double salary; otherwise, it would easily lead to a situation where a senior employee took advantage of their authority to gain double salary.

To ensure fairness, however, if there was evidence that the senior employee requested a written employment contract but was refused by the employer, the request for double salary could still be supported by the court.

Termination of senior employee

Case Summary:

Wang joined Company J in July 1991 and was appointed as General Manager in December 2012. In 2013, Company J was warned by the authority due to internal control issues. In May 2014, Company J convened a board of directors meeting, held Wang responsible for the incident and decided to dismiss him from his position as General Manager. The next day, Company J delivered a notice to Wang and terminated the employment relationship with him on the grounds of serious negligence of duty and severe violation of internal policies. Wang then initiated a labour arbitration, after which the case was brought to court.

Case Analysis:

The court found Company J’s termination of the employment relationship unlawful, and ruled in favour of Wang’s request for reinstatement.

The focus of this case lies in the potential conflict between the board’s right to appoint and dismiss senior employees and the employment law’s restrictions on terminating employment contracts. On one hand, the Company Law allows the board of directors to unilaterally appoint and dismiss senior employees through proper procedures. On the other hand, the Employment Contract Law requires a statutory ground for an employer’s unilateral termination of an employee. This overlap in the application of laws makes the termination of senior employees more complex than that of ordinary employees.

In this case, the court viewed the board’s appointment or dismissal of senior employees as personnel arrangements. For senior employees who have established an employment relationship with the company, the board’s resolution to dismiss their position should be regarded as a change in role, not necessarily leading to termination of the employment relationship. Therefore, Company J’s argument that it was entitled to terminate the Wang’s employment based on the board’s resolution was untenable; instead, Company J, as an employer, must follow the statutory grounds set out in the Employment Contract Law and provide sufficient evidence in order to justify the termination. Since Company J failed to provide sufficient evidence of Wang’s serious negligence of duties and severe violation of internal policies, the court ruled the termination as unlawful.

Key Takeaways

Handling employment disputes requires a precise understanding and interpretation of the relevant laws which can vary from region to region, leading to different outcomes for similar cases. Employers facing employment disputes should seek timely local legal advice and assistance.

中国：劳动争议案例分析－社会保险与高管员工的管理

在中国，由于法律解释的动态性和地方实践的多样性，处理劳动争议案件往往是非常棘手的。本次更新的三个案例聚焦于社会保险与高级管理人员的解除。

社会保险追缴的时效限制

案情简介：

员工H于2009年前入职A公司，A公司从2009年12月开始为H缴纳社会保险。2012年10月，H向当地人社局投诉，要求A公司为其补缴社会保险。当地人社局决定对此不再查处。H于是向法院提起了诉讼。

案例分析：

广东省高级人民法院经审理后，驳回了H的诉讼请求。法院在判决中引用了《劳动保障监察条例》第20条的规定：“违反劳动保障法律、法规或者规章的行为在2年内未被劳动保障行政部门发现，也未被举报、投诉的，劳动保障行政部门不再查处。”

本案证据表明A公司于2009年12月起开始未H缴纳社会保险。因此， H最迟应于2011年12月前向人社局投诉该公司2009年12月份之前未缴纳和未足额缴纳社会保险的违法行为。但H于2012年10月才向人社局投诉，已明显超过上述法定期限。因此，人社局对H该项诉求不再查处并无不当。

然而，需要注意的事，同类案件在其他地区可能得到不同的裁判结果。例如，北京市的法院倾向于认为，社会保险经办机构责令雇主补缴未足额缴纳的社会保险费，属于社会保险稽核行为，而非劳动保障行政部门的查处行为，因此不适用《劳动保障监察条例》第二十条的规定。雇主应当对其未足额缴纳的社会保险（包括两年甚至更久以前）进行全部补缴。

高管员工的二倍薪酬

案情简介：

2013年8月，崔某入职B公司担任副总经理，兼任行政人事部主管。 2014年8月，崔某离职。崔某在职期间，双方未签订劳动合同。崔某主张B公司未与其订立书面劳动合同违反法律规定，要求B公司支付其2013年9月至2014年7月期间未签订劳动合同的二倍工资差额。

案例分析：

法院没有支持崔某的请求。

本案的争议焦点在于未签订劳动合同的二倍工资规定是否适用于崔某。根据《劳动合同法》第82条，用人单位自用工之日起超过一个月不满一年未与劳动者订立书面劳动合同的，应当向劳动者每月支付二倍的工资。一般来说，该规定同时适用于普通与高管员工。

然而，本案中崔某在B公司兼任行政人事部主管。法院认为，如果用人单位能够证明高管员工的职责范围包括订立、保管劳动合同，则未签订劳动合同的责任在于该高管员工。用人单位因此无需向高管员工支付二倍工资，否则很容易导致高管员工利用其职权牟取二倍工资的情况。

不过，为确保公平，若有证据证明此类高管员工曾向用人单位提出签订劳动合同而被拒绝的，法院仍可支持该高管员工对二倍工资的请求。

高管员工的解除

案情简介：

王某自1991年7月入职J公司，并于2012年12月被聘任为总经理。2013年，J公司因出现内控问题遭到了监管部门的警告。2014年5月，J公司召开董事会，认为王某对此事件负有责任，于是作出决议解除王某总经理职务。第二天，J公司向王某送达通知，以严重失职、严重违反公司规章制度为由辞退王某。王某随后提起劳动仲裁，之后本案又被诉至法院。

案例分析：

法院认为J公司属于违法解除劳动关系，支持了王某要求恢复劳动关系的请求。

本案的争议焦点在于如何处理公司法下董事会对高管员工的任免权和劳动法下解除劳动合同限制之间的可能冲突。一方面，《公司法》授予了公司董事会通过正当程序单方聘任和解聘高管员工的权利。另一方面，《劳动合同法》又规定雇主单方解除员工的劳动关系必须有法定依据。这种法律适用上的双重性使得高管员工的解雇比普通员工更为复杂。

本案中，法院认为董事会聘用或解聘高管员工应视为对相关岗位的人事安排。对于已与公司建立劳动关系的高管员工而言，董事会通过决议解除其职务应视为是对其岗位进行变更，并不必然导致劳动关系的解除。因此，J公司认为基于董事会决议即可与王某解除劳动合同的观点是不成立的；J公司作为雇主，需要遵循《劳动合同》中的法定依据，并提供充分的证据。本案中，由于J公司无法提供充足的证据证明王某存在严重失职、严重违反规章制度的情况，法院最终认定J公司解除劳动合同违法。