On August 1, 2014, Ms. Wang joined an accounting firm in Beijing and signed an indefinite labor contract. On September 7, 2021, Ms. Wang submitted her resignation report to Mr. Fan, the legal representative, through WeChat. WeChat chat logs show that Ms. Wang asked how to hand over the work, and Mr. Fan replied that he needed time to find a successor. After that, Ms. Wang continued to work in the company.
During the period from October to December 2021, the company still paid Ms. Wang's salary normally. However, on December 13, 2021, the company terminated the employment relationship with Ms. Wang on the grounds that she agreed to her resignation. Ms. Wang then applied for arbitration, demanding that the company pay 960,000 yuan in compensation, the arbitration committee ruled that the company should pay 56.76 million yuan in compensation. The company was not satisfied with this and filed a lawsuit.
In the first-instance judgment, the court held that Ms. Wang had submitted her intention to resign on 7 September 2021, but the company had not agreed to this intention and had not gone through any resignation procedures with her. Therefore, the court held that between September 7 and December 13, 2021, the employment relationship between the parties still existed. However, three months later, the company terminated the employment relationship with Ms. Wang on the grounds that she agreed to her resignation, which was obviously beyond a reasonable time frame and lacked goodwill and reasonableness in maintaining the employment relationship. Therefore, the company should bear the responsibility for illegally terminating the employment contract.
The court of first instance further pointed out that Ms. Wang's salary was three times higher than the average monthly wage standard for employees in Beijing, so the base amount of compensation should not exceed RMB 37,840. According to the relevant provisions of the Labor Contract Law of the People's Republic of China, if an employer terminates or dissolves a labor contract in violation of the regulations, it shall pay compensation to the employee at twice the standard of economic compensation.
In summary, the court of first instance ruled that the company should pay Ms. Wang RMB 567,600 in compensation for the illegal termination of the employment contract.
The company was not convinced and appealed. They argued that the employee had voluntarily resigned in this case, and the employer had agreed, so they were not required to pay compensation for the illegal termination of the employment contract. At the same time, they also argued that Ms. Wang had expressed her intention to resign and served it on the company, so the company's notice of her resignation on 13 December 2021 did not constitute an unlawful termination.
The court of second instance held that the focus of the dispute in this case was whether the company had illegally terminated the employment contract. Based on the relevant legal provisions and the facts of the case, the court held that the company's termination of the employment relationship on the grounds of agreeing to the resignation application three months after the employee submitted his intention to resign clearly exceeded the reasonable time limit, and therefore constituted an illegal termination of the employment contract.
The court further pointed out that, according to the relevant provisions of the Labor Contract Law of the People's Republic of China, if an employer illegally terminates a labor contract, and the employee does not request to continue to perform the labor contract or cannot continue to perform the labor contract, the employer shall pay compensation to the employee in accordance with the standard of economic compensation. The amount of compensation calculated by the court of first instance on the basis of the relevant legal provisions and the facts of the case was accurate.
In the end, the court of second instance rejected the company's appeal request and upheld the judgment of first instance.
To sum up, as a company, you should conduct in-depth study of the law and follow the time and procedures prescribed by law, otherwise you need to bear corresponding responsibility for errors in legal understanding.