New Labor Dispute Mediated for Foreign Employee Over Permit and Reimbursement

Summary: A foreign employee in Beijing sought help after her company froze her work permit, demanding reimbursement of relocation costs before allowing resignation. Mediators clarified labor laws, stating employees can resign with notice and employers must process permit cancellation. After negotiations, the company agreed to cancel the permit, and the employee paid partial costs, resolving the dispute.

Source: OT-Team(G), 房山区委政法委

The Fangshan District Comprehensive Governance Center in Beijing has successfully mediated a labor dispute involving a foreign employee and her employer.

The case centered on Ms. Ya, a foreign national employed as a sales representative by a foreign-invested enterprise in Fangshan. Upon hiring, the company assisted her in obtaining a Foreigners' Employment Permit, a work visa, and a residence permit, and the two parties signed a written labor contract.

After commencing her employment, Ms. Ya repeatedly expressed her intention to resign. The company, however, required her to reimburse travel and related expenses it had advanced for her relocation to China before agreeing to process the cancellation of her foreigner work permit. Without completion of the required deregistration procedures, Ms. Ya was unable to proceed with her departure, effectively blocking her resignation. She subsequently sought assistance from the Fangshan District Comprehensive Governance Center.

Upon accepting the case, the Ding Junhong Mediation Studio under the governance center promptly initiated its response mechanism. Leveraging the center's coordinating function, it quickly convened consultations with relevant authorities, including public security and market regulation departments, to analyze the core issues and formulate a viable resolution plan.

The mediation team also used translation software to communicate effectively with Ms. Ya and reviewed the materials she submitted, including her Foreigners' Employment Permit, work-related chat records, and business receipts. Based on the evidence, the mediators determined that the parties met the essential characteristics of an established labor relationship and proceeded to contact the company to begin mediation.

Given that tensions between the two sides had escalated, the company's management initially refused to cooperate. Mediators subsequently reached out through the district Party organization department and the Xilu Police Station to reestablish contact. Shifting their approach, they conducted online communication to clarify relevant legal principles. They explained that foreign employees in China enjoy equal rights to employment and to choose their occupation, and that under Chinese labor law, an employee may unilaterally terminate a labor contract by providing 30 days' prior notice. Employers, in turn, are obligated to handle the cancellation procedures for a foreigner's work permit; failure to do so may result in liability for any resulting losses. Through sustained legal clarification and dialogue, the mediators gradually eased the company's resistance.

To address the dispute over compensation, the mediation office engaged a government-employed lawyer whose professional expertise and English-language proficiency proved instrumental. Multiple rounds of negotiations were organized to guide both parties toward mutual understanding and compromise. Ms. Ya was encouraged to consider the company's reasonable concerns, while the company was reminded that prolonged unresolved disputes could harm its commercial reputation and operational stability.

After extensive consultations, the two sides reached a settlement agreement: the company would complete the necessary work permit cancellation procedures for Ms. Ya, and she would compensate the company for part of its advanced expenses. With both procedural and financial issues resolved, the dispute was successfully concluded.