Illegal Dismissal During The Epidemic? What You Can Do About It?

It has been three months since the epidemic situation started. Many cities in China were placed under lockdown which prevented many companies from returning to their normal operation. At the virus began to spread to other countries, there was a decrease in demand for services in certain areas. As a result of the economic crisis and the epidemic situation, many English training schools and companies have closed and filed for bankruptcy.

As more companies went bankrupt, unemployment became inevitable. The unemployment rate has skyrocketed the past two months, including the number of contracts terminated and the number of foreign employees getting fired as the result of the economic crisis. In light of the unemployment situation, the number of cases in which companies have terminated their labor relations has increased dramatically. 

This article will tell you what you can do in a situation where your labor contract was terminated illegally and what are the consequences of such an illegal termination, along with how should employees respond. These three major issues are discussed in the following article.

What is an illegal termination of a labor contract?

Illegal termination occurs when the employer has not canceled the labor contract in accordance with the provisions of the Labor Contract Law. Conversely, if the employer terminates the labor contract under certain stipulated circumstances, it is considered legal. 

Illegal termination by the Employer includes the following actions:

 1: If the cancellation conditions set out below are not met, the employer will have unilaterally terminated the labor relationship.

(1) Cancellation without negotiation 

According to Article 36 of the "Labor Contract Law", the employer and the laborer can terminate the labor contract through consultation. If the employer intends to terminate the labor contract but fails to reach an agreement with the employee, the conditions for the termination of the agreement do not exist.

(2) There is no prerequisite for unilateral cancellation. 

According to Article 39 of the Labor Contract Law (Unilateral Immediate Termination), the employer may unilaterally terminate the labor contract if the following conditions exist. If the following conditions do not exist, and the employer forcibly terminates the labor contract at that time, it is considered an illegal termination of the contract.

(1) being proved unqualified for recruitment during the probation period;

(2) seriously violating the rules and regulations of the employing unit;

(3) causing major losses to the employing unit due to serious neglect of duty or engagement in malpractices for personal gain;

(4) concurrently establishing a labor relationship with another employing unit, which seriously affects the accomplishment of the task of the original employing unit, or refusing to correct the issue after the original employing unit brings the matter to the employees attention;

(5) invalidating the labor contract as a result of the circumstance specified in Subparagraph (1) of the first paragraph of Article 26 of this Law; or

(6) being investigated for criminal responsibility in accordance with law.

 According to Articles 40 and 41 of the Labor Contract Law (Unilateral Advance Cancellation), the employer can only unilaterally terminate the labor contract when the following conditions are met. If the following conditions do not exist, and the employer forcibly rescinds the labor contract at that time, it is considered illegal.

Article 40: In one of the following circumstances, an employing unit may revoke the labor contract, if it notifies the worker of its intention, in writing,  30 days in advance, or after paying the worker an extra month of salary:

 (1) The worker is unable to take up their original work or any other work arranged by the employing unit on the expiration of the specified period of medical treatment due to an illness or an injury incurred when not at work;

(2) The worker is incompetent for the post and remains incompetent after receiving a training or being assigned to another post; or

(3) The objective conditions taken as the basis for conclusion of the contract differ to such an extent that the performance of the initial contract becomes impossible, and the issue cannot be resolved even through consultation between the employing unit and the worker, concerning a  modification of the contents of the labor contract.

Article 41: If, in any of the following circumstances, an employing unit needs to discharge more than 20 employees, or less than 20 employees, which, however, account for more than 10 per cent of the total number of the enterprises employees, it may only do so after explaining the situation to the trade union or to all of its employees, 30 days before the termination. It should also solicit opinions from the employees and submit its plan for the discharge to the administrative department of labor:

(1) The enterprise is to undergo reorganization pursuant to the provisions of the Law on Enterprise Bankruptcy;

(2) The enterprise is in dire straits regarding production and management;

(3) The enterprise changes its line of production, introducing a major technological update. Or, it adjusts its business method, and, after modification to the labor contracts, it still needs to reduce its personnel; or

(4) The objective economic conditions taken as the basis for conclusion of the labor contracts have greatly changed, to such an extent that the original labor contract cannot be performed.

When discharging employees, the employing unit shall continue to employ the following persons by giving them priority:

(1) employees who have concluded fixed-term labor contracts for a relatively long term with the employing unit;

(2) employees who have concluded open-ended labor contracts with the employing unit; and

(3) employees who have no other family members employed, or who have an elder or minor depending on their support.

(2) Illegal dissolution by the employer 2: The law clearly states the following protection for employees who cannot be terminated, and the employer forcibly terminates the labor contract.

According to Article 42 of the Labor Contract Law, if the employee has one of the following circumstances, the employer shall not terminate the labor contract in accordance with the provisions of Article 40 and Article 41 of this Law.

a) Workers engaged in works that are dangerous for health have not undergone occupational health check before leaving office, or patients suspected of occupational disease are in the period of diagnosis or medical observation; 

b) Those who suffer from occupational diseases(get sick while working) or work-related injuries in their unit and are confirmed to have completely, or partially lost their ability to work; 

c) Sick or non-work-related injuries, within the prescribed medical period; 

d) Female employees during pregnancy, childbirth or lactation; 

e) Those who worked continuously for 15 years with this unit and are currently less than 5 years from the legal retirement age; 

f) Other situations stipulated by laws and administrative regulations.

(3) The legal termination by the employer 

3:If the employer s procedures for the termination of the labor contract do not comply with the law ; 

The legal procedure of the termination of the labor contract is as following:

The procedures for the employer to terminate the labor contract in accordance with Article 40 of the Labor Contract Law is as follows: The employing unit shall notify the employee in writing, 30 days in advance. It should be noted that if the employer chooses to pay the worker an additional month s wages, the employer can terminate the labor contract without having to notify the worker 30 days in advance.

The procedure for the employer to terminate the labor contract in accordance with Article 41 of the Labor Contract Law: 

The employing unit shall explain the situation to the trade union or all employees 30 days in advance, and after hearing the opinions of the trade union or the employees, the plan to reduce the personnel shall be reported to the labor administrative department.

(2) What are the consequences of a violation of the labor contract termination process?

After illegal termination, the employer shall bear the legal responsibility caused by the illegal termination of the labor contract.

According to Article 47 of the Labor Contract Law:

Unlawful dismissal or termination, payment of compensation.

(Compensation = economic compensation * 2 times)

(Economic compensation = one month salary)

If it is more than six months and less than one year, it shall be calculated as one year;

If it is less than six months, the laborer shall be paid economic compensation of half a month's salary)

If the monthly salary of a worker is three times the average monthly salary of the workers of the region for the previous year, as published by the peoples government of the municipality directly under the Central Government or by that of the city divided into districts where the employing unit is located, the rate for his financial compensation payable shall be three times the average monthly salary of the workers, and the number of years involved shall not exceed 12 years. The monthly salary means the average of a given workers monthly salary for the 12 months prior to the revocation or termination of the labor contract.


If the employee has been working with the unit for four years and five months when the labor contract is terminated, the calculation method of the economic compensation should be that of four months of wages calculated for the four years, and five months are calculated as half a year, thus, as a half-months salary. The economic compensation should then be a total of 4.5 months of salary. If the employer illegally terminates the labor contract, the calculation should be not economic compensation, but rather, compensation, which would be twice the amount of standard compensation, that is, 9 months of salary.

(3) How should workers respond?

Employees should pay attention to the following points when they encounter the employer s illegal termination:

1. Look at the termination conditions

When the solution is illegal, the employer will require the worker to sign a release document, and at the same time, the worker may be informed that there will be undesirable consequences if not signed. At this time, laborers must not rush to sign and should read the contents clearly before signing. If there is any supplement to the document, as being required to waive the right to any further claim against the employer, etc., caution must be taken.

2. The employer might use different methods to persuade the employee to terminate the labor contract.

In some cases, the employer might use some methods in order to forcibly convince the employee to terminate the contract by using reasons, such as bankruptcy or difficulty in continuing the operation of the company. In such a case, the employee can engage in the negotiation with the employer where they can get compensation for getting dismissed.

3. Seek help from a lawyer 

If the employee has all of the above situations and is unable to decide what to do when they encounter the above problems, they can also consult a lawyer before making any decision.

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Author: Kumbayeva Aigerim

Editor: Crystal H