Refer China: Foreign Worker Seeks ￥1M Compensation in Labor Dispute w。 School

Court Ruled...

Court Ruled | Foreign Employee Seeks RMB 1 Million+ Compensation in Labor Dispute with Shanghai School

Welcome to our new column, where we share real court ruling cases related to expats & mostly foreign employment in China. We hope these cases provide valuable insights into arbitration and judgments concerning foreign workers!

*Disclaimer: This English version (especially legal terminology) is for reference only. In case of any discrepancies, please refer to the original Chinese court decision. For formal legal advice, consult a qualified attorney.

Case: Labor Dispute Between CRB and a Shanghai Top International School

(Case No. (2016) Hu 02 Min Zhong 9210)

Key Takeaways

1. If a labor contract does not explicitly define the consequences of non-renewal upon contract expiration, the employer is required to pay economic compensation according to the Labor Contract Law.

2. No matter the employee is foreign or not, they are entitled to protection under the Labor Contract Law regarding contract termination without renewal.

Case Summary

CRB, a foreign employee, joined a Shanghai top international school on January 10, 2011. The parties signed a written labor contract, which expired on July 31, 2015. On September 16, 2015, CRB filed for arbitration, requesting economic compensation for the termination of her contract, as well as the difference in welfare benefits from August 1, 2013, to July 31, 2015, and 25% of the welfare benefit difference as compensation.

Request from CRB:

In this case, the appellant, CRB, appealed the first-instance court's judgment, requesting the court to annul the decision and support all of her original claims. Initially, CRB sought the following from the international school:

1. Payment of economic compensation for not renewing her labor contract, amounting to RMB 81,765;

2. Welfare benefits difference from August 1, 2013, to July 31, 2015, totaling RMB 1,223,934.31 (611,967.16 x 2 years);

3. Compensation of 25% of the welfare benefits difference, totaling RMB 305,983.58;

4. Payment for all fees incurred in the case, including judicial, legal service, and translation costs.

During the trial, CRB amended her claim, asking the court to include the bank loan interest rates applicable during the relevant period, totaling RMB 58,424.

In the appeal, C did not insist on claiming all fees incurred in the case.

Pic irrelevant to text

Arbitration and Court Rulings

Arbitration:

The Shanghai Labor and Personnel Dispute Arbitration Committee ruled that the international school should pay CRB economic compensation of RMB 73,588.50 for the termination of contract. However, other claims, such as the welfare benefit difference, were not supported.

First Trial:

The court considered the issue of economic compensation for contract termination. While the Chinese Labor Contract Law does not apply to all aspects of employment for foreign workers, it does apply in five key areas: minimum wage, working hours, rest and leave, labor safety and health, and social insurance.

In this case, the contract expired on July 31, 2015, and CRB and the school did not agree on the economic compensation upon contract termination. Therefore, CRB's request for compensation based on the Labor Contract Law was not supported, and the court agreed that the school should not pay the compensation of RMB 73,588.50.

The first-instance court determined that C did not meet the criteria for receiving the welfare benefits in question, and both C and the school acknowledged that she did not qualify. Therefore, her request for the welfare benefits difference was not supported.

Appeal (Shanghai Second Intermediate Court):

The appellate court confirmed the facts determined by the first-instance court.

The appellate court found that according to the Labor Contract Law, foreign employees who have a valid work permit and work in China are entitled to the same protections as Chinese employees, including provisions for economic compensation upon contract termination.

Since the contract did not specify the legal consequences of non-renewal, both parties were obligated to follow the relevant provisions of the Labor Contract Law.

Consequently, the court ruled that CRB's request for compensation was valid and supported the arbitration decision. The first-instance court's judgment was amended. The court ruled that the international school should pay CRB economic compensation of RMB 73,588.50 for the termination of contract.

Conclusion

This case highlights the importance of clearly specifying the consequences of contract termination in labor contracts, especially regarding economic compensation. Foreign employees in China are entitled to the same rights as local employees in cases of non-renewal or termination of contracts, as long as their employment relationship is established legally.

Stay tuned for more real-life cases that shed light on foreign employment legalities in China!

Source: China Judgements Online