In recent years, under the dual impact of the epidemic and the economic situation, orders have decreased, revenue has declined, and the proportion of labor costs has increased. So, is the company's unilateral job transfer and salary reduction legal and effective? This article combines cases to discuss related issues for reference.
Basic facts of the case:
On December 30, 2015, Xu signed a labor contract with a company in Shenzhen, and Xu was the general manager of the company's East China regional operation center with an annual salary of 330,000 yuan. The labor contract stipulates that if the plaintiff fails to meet the requirements of the position, the company has the right to adjust the position and salary and benefits.
In 2019, Xu's performance assessment was D (not up to standard). The company reduced Xu's annual salary to 260,000, and Xu signed the "Salary Confirmation" and remarked "do not agree to the salary adjustment".
Starting in 2020, the company adjusted its position to a regional deputy head office and cut his salary on the grounds of Xu's poor performance.
In August 2021, Xu filed for arbitration, demanding that the company pay nearly 400,000 yuan in salary difference and economic compensation.
The court held that
Salary adjustment is a major change in the content of the labor contract, and the employer shall reach an agreement with the employee through consultation in accordance with the law, or formulate legal and effective rules and regulations on the salary adjustment to regulate it. The company only determined that Xu "could not meet the requirements of the position he held" based on the 2019 performance appraisal result of D, and unilaterally significantly lowered Xu's salary standard without adjusting the position, which lacked factual basis and failed to reach an agreement with Xu, which was illegal and should be paid back wages to Xu in accordance with the law. The company did not pay Xu's labor remuneration in full, and Xu terminated the labor contract on this ground and demanded that the defendant pay economic compensation for the termination of the labor contract, which was in accordance with the law and was supported by this court.
Lawyer Analysis:
1. Job adjustment and salary reduction are the main contents of the change labor contract, and shall be agreed upon through consultation with the employee.
In accordance with Article 35 of the Labor Contract Law of the People's Republic of China"The employer and the employee may change the content of the labor contract if they reach a consensus through consultation. Modification of the labor contract shall be in written form"。The employee's job position and labor remuneration are important terms in the labor contract involving the interests of the employee, and the company cannot unilaterally change it without consultation with the employee.
The legislative purpose of the Labor Law of the People's Republic of China is mainly to better protect the legitimate rights and interests of workers from infringement, and in the application of the law, on the basis of balancing the interests of workers and employers, the legitimate rights and interests of relatively vulnerable workers will be protected as much as possible. In this case, although the company stipulated in advance in the employment contract that "the company has the right to adjust the position, salary and benefits", if the employee clearly stated that he "did not agree to the salary adjustment", the employee could request the termination of the employment relationship and the payment of severance on the grounds that the company unilaterally changed the employment contract.
In addition, if the employer unilaterally terminates the employment contract with the employee on this ground because the employee does not comply with the employer's job adjustment and salary adjustment, the employer may face the risk of paying compensation (equivalent to double the severance payment) due to the illegal termination of the employment relationship.
2. The transfer and salary reduction shall be legal and reasonable.
Article 8 of the Employment Promotion Law of the People's Republic of China stipulates that "employers shall enjoy the right to employ employees on their own in accordance with the law". As a market entity, it is an important part of the exercise of employment autonomy for employers to make appropriate adjustments to employees' positions and work locations according to their own production and operation needs. At the same time, however, the exercise of the employer's employment autonomy must also be carried out within the framework of relevant laws and policies, and the employer's behavior of arbitrarily terminating the labor contract with the employee without assuming legal liability by means such as organizational structure adjustment and post withdrawal and merger is strictly regulated.
The Minutes of the Symposium on Several Issues Concerning the Trial of Labor and Personnel Dispute Cases issued by the High People's Court of Guangdong Province and the Labor and Personnel Dispute Arbitration Commission of Guangdong Province have made clear provisions. Article 22 of the minutes stipulates that if an employer adjusts an employee's job position and meets the following circumstances, it shall be deemed that the employer has lawfully exercised its employment autonomy, and if the employee requests to terminate the labor contract and request the employer to pay economic compensation on the grounds that the employer has adjusted his or her job position without authorization, it shall not be supported: (1) the adjustment of the employee's job position is necessary for the production and operation of the employer; (2) After the adjustment of the post, the wage level of the worker is basically the same as that of the original post; (3) It is not insulting or punitive; (4) There are no other violations of laws and regulations.
3. Operational suggestions for job transfer and salary reduction
For reasonable and legal job transfer and salary reduction, the lawyer provides the following operational suggestions for reference.
First of all, it is agreed in advance in the employment contract that there may be a job adjustment. The agreement must be clear and specific so that the worker can foresee how and how his or her job will change when a specific situation arises.
Secondly, the position adjustment of "incompetent employees". Before making a job adjustment, the employer should collect sufficient evidence to prove that the employee is not competent for the job requirements, that the post adjustment is fully reasonable, and that the position before and after the adjustment is related to a certain extent, and is compatible with the employee's working ability, profession and skills.
Thirdly, "last elimination" is not a legitimate reason for the company to transfer jobs and reduce salaries. The employee who ranks last in an employer's performance appraisal is not necessarily incompetent. If the employer wants to unilaterally transfer the employee, it also needs to provide sufficient evidence to prove that the employee is indeed incompetent for the job.
Finally, if the employer transfers and reduces the salary of the employee, it shall first renegotiate with the employee on the position and salary, and fix the change in writing.
Under the conditions of a market economy, it is normal for employers to adjust and change due to the needs of production and operation. The law allows employers to reasonably adjust the positions and places of work of employees according to their own production and operation needs, but employment management cannot be arbitrary, and the legal balance between self-employment and workers' rights and interests should be coordinated, and the autonomy of employment can be exercised within the scope of the law, so as to provide enterprises with a legitimate and safe business strategy to cope with challenges.
This article was first published on the lawyer's WeChat***Shenzhen lawyer Liu Liping.