Refer China: Foreign Employee Quits by Just Email, School Seeks Compensation

Court Ruled...

Court Ruled | Foreign Employee Quits by Just Email, School Seeks Compensation

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.

On November 19, 2025, the Suzhou Industrial Park People's Court released a noteworthy judgment involving a foreign teacher who unilaterally terminated his employment contract and left China without prior notice. The case centered on whether such an action requires the foreign employee to bear compensation liability.

Key Takeaways

Penalty Clauses: Labor contracts must conform to Chinese labor laws. Unless related to service period violations or non-compete obligations, employee penalty clauses are unenforceable.

Resignation Without Notice: While employees can resign, failure to give notice can result in liability if it causes direct, provable damages to the employer.

Conditional Salary Clauses: Salary during breaks can be withheld or reclaimed if the employee breaches return-to-work commitments.

Case Summary

R, a Canadian national, signed a "Foreign Teacher Employment Contract" with A International School, valid from September 1, 2016, to June 30, 2018. The school arranged work and residence permits for R and provided clear terms regarding work duties, salary, housing, visa arrangements, and breach of contract clauses.

Crucially, the contract stated that foreign teachers on long-term contracts would still receive salary during winter breaks (February), even when no teaching tasks were assigned, to ensure continuity.

On March 4, 2018, A International School received an unexpected resignation email from R. Despite multiple attempts to reach him via calls, texts, and email, he could not be contacted. Other foreign teachers later confirmed R had returned to Canada on March 5.

The school sued R for:

CAD 2,000 as breach penalty (as stipulated in the contract),
CAD 4,200 for February salary (arguing no work was done),
RMB 6,050 in economic losses, including: RMB 3,500 early termination penalty on a rental lease, RMB 1,750 rental agency fee, RMB 800 residence permit processing fee.

Pic irrelevant to text

Court's Judgment

After review, the court ruled as follows:

1. Invalid Breach Penalty Clause:

The court found the CAD 2,000 penalty clause invalid under Chinese labor law. Article 22 of the Labor Contract Law permits employer-imposed penalties only in cases involving breach of service period or non-compete clauses. The clause here exceeded that scope, aiming to restrict employee mobility, and was thus unenforceable.

2. Refund of February Salary:

Although February was a non-working month due to winter break, salary was conditionally paid to those who continued the contract. Since R did not return post-break and had effectively resigned before the new term, he lost the eligibility for that salary. The court ordered him to return RMB 20,790.

3. Partial Compensation for Economic Losses:

Supported: The RMB 3,500 rental contract penalty, directly caused by R's sudden departure.

Not Supported: The rental agency fee and residence permit cost were deemed necessary contractual expenses, not damages resulting from his departure.

Final Decision

The court ruled that R must repay RMB 20,790 in unearned salary and compensate RMB 3,500 in housing losses. Other claims were dismissed. Neither party appealed.

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