The Shanghai No. 1 Intermediate People’s court reportedly ruled that a company had wrongfully  terminated an employee’s contract on the grounds of a serious violation of company policies.. The court took the view that the employee’s misconduct did not constitute a sufficiently “serious” violation of the company’s policies.

The misconduct related to an employee uploading three photos of a colleague in addition to posting five obscene pictures with inappropriate language on a social media website called ‘WeChat Moments’ . The posts were viewed by the president, colleagues and clients of the company. The company summarily terminated the employee for a serious violation of company rules as her actions had an adverse effect on the company’s reputation. The employee sued the company for unlawful termination and alleged that her posts did not impact on the company’s reputation as they were published after working hours (at 8 pm).

The company handbook very generally provided that the company could terminate an employee in circumstances where the employee had seriously disrupted work, caused damage to the business and to the company’s reputation.  However, the court did not agree that the misconduct in this case was a sufficiently “serious” violation of the company’s rules and found in favor of the employee as the court held that the company did not submit evidence to prove the extent of damage to the company’s reputation.

Key Take-Away Points:

This case demonstrates that the courts in China do not treat damage to reputation as seriously as actual financial loss. It is therefore advisable for companies to define what specific actions may lead to summary dismissal in the company rules to increase the chances that a court will rule in the company’s favor and ensure that they are protected from such instances where employees post damaging material on social media sites.