Reading guide:How to deal with labor relations in the case of merger or division of a company?This is a very important issue, because it is related to the legitimate rights and interests of employees and the normal operation of the company, and if it is not handled carelessly, it will intensify the employment conflict, cause panic among employees, and even affect the stable operation of the company.
In order to protect the legitimate rights and interests of employees, Article 34 of the Labor Contract Law of the People's Republic of China (hereinafter referred to as the "Labor Contract Law") clearly stipulates that in the event of a merger or division of an employer, the original labor contract shall continue to be valid, and the labor contract shall continue to be performed by the employer that inherits its rights and obligations. This means that the merger or division of the company will not lead to the dissolution or termination of the original employment contract, but will continue to be effective after the merger or division of the company, and the employment relationship between the employee and the original company will be changed to the employment relationship between the employee and the merged or divided company, and the company will continue to perform the original employment contract.
Let's take a look at three examples.
Case 1
Brief facts of the case
In 2016, A entered Company A through social recruitment, and the two parties signed a three-year labor contract. In 2017, due to the needs of strategic development, Company A and Company B were newly established and merged, and the merged company was re-registered as Company AB with the industrial and commercial department. After the establishment of Company A, on the grounds that the subject of the original labor contract had been changed and the original labor contract could not be continued, Company A was required to sign a new labor contract, otherwise the employment relationship would be terminated. A refused on the grounds that he did not need to sign a new contract to continue working in his original position. Company A terminated the employment relationship with A on the grounds that A was unwilling to sign an employment contract with the new employer. A then filed a labor arbitration with the District Labor and Personnel Dispute Arbitration Commission.
Trial Opinions
Arbitration Commission: Article 34 of the Labor Contract Law stipulates that in the event of a merger or division of an employer, the original labor contract shall continue to be valid, and the labor contract shall continue to be performed by the employer that inherits its rights and obligations. Accordingly, after the merger of Company A and Company B to become Company AB, the original employment contract between Company A and Company A shall continue to be valid, and Company AB shall continue to perform the original employment contract and shall not terminate the employment relationship with Company A.
Verdict
Award: Supporting the Claimant's Claim for Arbitration.
Case 2
Brief facts of the case
B joined Company C in early 1998. During the working period, B signed an indefinite employment contract with Company C. At the beginning of 2015, in order to reduce costs and achieve resource sharing, Company C and Company D planned to merge by absorption, and planned to merge all the assets and personnel of Company C into Company D. In order to ensure the smooth implementation of the merger of the company, Company C held a staff meeting, announced the merger plan, all employees participated in the staff meeting, and formed a meeting resolution, after the merger of Company C into Company D, the original employees' positions and locations remained unchanged. B participated in the staff meeting, agreed to the company's merger and employee placement plan, and signed for confirmation. Subsequently, the two companies were merged, and after the merger, Company C went through the cancellation registration procedures with the industrial and commercial registration authority, and Company D went through the registration procedures for change. Since the employment contract signed between Company C and its employees had not yet expired, Company D and the employees merged from Company C did not re-sign the employment contracts, but continued to perform the labor contracts signed between Company C and the employees. From the beginning of 2015, the merged company D will pay wages and social insurance premiums for B. At the end of 2015, B applied to the District Labor and Personnel Dispute Arbitration Commission for labor dispute arbitration, demanding that Company D pay economic compensation and double the salary for not signing a labor contract.
Trial Opinions
B asserted that after the merger of Company C and Company D, Company C was deregistered, and the employment relationship between itself and the original employer was terminated due to the cancellation of the company, and Company C should pay it economic compensation for the termination of the labor contractSince Company C has been deregistered, Company D should be obligated to pay economic compensation. In addition, he went to work for the merged company D and established a new employment relationship, but company D did not sign an employment contract with him, so he should pay double the salary of the unemployed company.
Company D argued that B agreed to the merger of the company and the employee resettlement plan, and signed to confirm it. If B works for Company D, it is a matter of both parties continuing to perform the labor contract signed between Company C and Company B, and Company D should not pay economic compensation. Company D submitted documents on the merger of Company C and Company D, an employee resettlement plan, a resolution of the workers' general meeting signed by the employees, and an indefinite-term labor contract signed between Company C and Company B. B has no objection to any of the above evidence.
Arbitration Commission: Article 34 of the Labor Contract Law stipulates that in the event of a merger or division of an employer, the original labor contract shall continue to be valid, and the labor contract shall continue to be performed by the employer that inherits its rights and obligations. In this case, after Company C was merged into Company D, its rights and obligations should be enjoyed and assumed by the merged Company D, and the employment contract signed between B and Company C was not naturally terminated due to the cancellation of Company C, and the employment contract continued to be valid after the merger of the companies, and the employment relationship between B and Company C was changed to that between B and Company D. Therefore, B's request for Company D to pay economic compensation was not in accordance with the law. At the same time, the employment contract signed between B and Company C was still binding on Company B and Company D after the merger of the companies, and B's request for Company D to pay double the wages of the unsigned employment contract was also inconsistent with the law.
Verdict
Adjudication: The Claimant's claim for arbitration was not upheld.
to be continued ※