Source: OT-Team(G)
Is it legal for a school to revoke paid leave when a foreign teacher resigns early? A recent court ruling in China has addressed this contentious issue.
The Dispute
Mr. J, a British national working as a foreign teacher at H Kindergarten, found himself in a heated conflict with his employer over deducted wages. The issue stemmed from a clause in his labor contract, signed on April 29, 2022, which stipulated an annual two-week paid winter break (one week being statutory). However, the contract also stated that if Mr. J resigned before the agreed term (ending July 14, 2023), his salary would be docked for the paid leave he had already taken.
After submitting a written resignation notice on March 14, 2023, and leaving on June 25, Mr. J was shocked to discover H Kindergarten had clawed back 7,636.36 yuan from his final paycheck—equivalent to his paid leave wages. "Why? This violates our agreement!" he protested, filing for labor arbitration. The arbitration committee ruled in his favor, ordering the kindergarten to reimburse the amount.
The Kindergarten's Defense
H Kindergarten refused to comply, arguing the deduction was a "benefit adjustment" rather than a wage penalty or breach-of-contract fine. They appealed to the court to overturn the arbitration award, insisting the clause was legally binding.
Court Ruling
The court dismissed the kindergarten's appeal, declaring the contract clause unlawful. Judges emphasized that conditioning paid leave on completing the full contract term effectively restricted Mr. J's statutory right to resign with advance notice (per Article 37 of China's Labor Contract Law). Such terms, the ruling stated, "disguise restrictions on workers' freedom to terminate employment" and violate labor protections.
Legal Analysis
The judgment highlighted two key points:
1.Illegal "Condition": Contract terms imposing penalties for lawful resignations contradict labor laws and public order, rendering them void.
2.Balanced Rights: While employees must give 30 days' written notice and complete handovers, employers cannot punish them for exercising this right—unless actual financial losses are proven.
Legal Significance
The judgment clarifies that while employers may set benefit conditions, they cannot override fundamental labor rights. Employers seeking to protect against early departures must use lawful alternatives like training reimbursement clauses rather than wage deductions.
The court ordered H Kindergarten to repay the 7,636.36 yuan deduction, affirming that contractual terms cannot circumvent workers' statutory rights.
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