Year in reviewi Labour disputes
As a result of the covid-19 pandemic and the overall recession, the number of labour disputes has been increasing continuously over the past year. Local courts and arbitration tribunals released typical labour disputes one after another on overtime payment, disputes involving managerial personnel and covid-19.
In addition to the 'traditional' disputes (i.e., labour remuneration, termination and work-related injury), the number of cases about non-compete, confidentiality, employee stock rights and senior employee disputes is increasing significantly and these cases often involve many topical and complex issues. A former senior manager of Iflytek joined Tencent, a competitor, during his non-compete period. The court ruled that he should pay Iflytek liquidated damages of 12 million yuan for breach of his non-compete obligations and resign from Tencent.ii Termination of employment
In cases arising from unilateral termination by an employer owing to an employee's gross misconduct, the employer bears a heavy burden of proof as required by the legal provisions and in judicial practice, which puts the employer at great risk of losing the case. For example, aside from having to prove the employee's conduct, the employer is required to have written internal rules or regulations that specify that the conduct of the employee renders the employer the right to unilaterally terminate the employment contract. In addition, during the course of formulating their rules and regulations, employers must follow the legal procedures for seeking advice from employees or labour unions, announcing the rules and regulations, and keeping employees informed. In recent cases, courts and arbitral tribunals have paid more attention to good faith and the professional ethics of the employees, and if an employee is proved to have committed gross misconduct, courts and arbitral tribunals have been inclined to uphold the employer's unilateral termination.iii Electronic employment contracts
After issuing a policy allowing employment contracts to be concluded in electronic form in 2020, the Ministry of Human Resources and Social Security issued the Guidelines for Conclusion of Electronic Employment Contracts in July 2021, guiding employers and employees to conclude electronic employment contracts in accordance with the law. Provinces including Beijing, Shanghai, Tianjin, Hainan, Guangdong, Fujian and Hubei have then responded positively and launched policies to promote the application of electronic employment contracts. Suzhou was the first local government to make local rules for resolving disputes arising from electronic employment contracts.iv Employment stabilisation
In response to overall economic depression, the central and local governments have been taking measures to stabilise and expand employment, including reducing and exempting employers' duties on paying employees' social insurance premiums, supporting start-ups, encouraging flexible employment and providing employers and employees with employment-related subsidies.v Protection of personal information
The Personal Information Protection Law (the PIP Law) came into effect on 1 November 2021. The PIP Law allows processors of personal information to process information without obtaining the consent of the information owner, if it is necessary for the conclusion or performance of a contract to which the owner is a party, or for the implementation of human resources management conducted in accordance with the labour rules and policies formulated according to the law and the collective contracts concluded according to the law.vi Flexible employment and new forms of employment
The rights and interests of employees under new employment forms are being given increasing attention. After measures for flexible employment were issued through multiple channels by the General Office of the State Council in July 2020, the Ministry of Human Resources and Social Security, with seven other ministries, issued guidance on the protection of the lawful rights and interests of employees under new employment forms, including couriers, ride-hailing drivers and other jobs created for internet platform businesses. Local governments, including Beijing, Jiangsu and Zhejiang, have launched local policies to safeguard the interests of these employees, confirming their entitlement to labour remuneration, social insurance, rest and holidays, and defining the platforms' responsibilities.
Outlook and conclusions
National and local employment policies will need to be adjusted in response to any developments in the covid-19 pandemic and this will indirectly affect the rules of adjudication of labour disputes in judicial practice. Owing to the economic recession and increasing disputes about senior employees with enhanced employment bargaining power, the judicial interpretation may also reflect the shift from inclined protection of employees to 'balancing the interests between employers and employees', which has been evident in some labour disputes in recent years.
Given that the competition between enterprises for talent and technology is increasingly intense, dispute cases involving trade secrets and competition restrictions will continue to increase. These types of disputes involve many practice areas, including labour law, competition law, intellectual property law and criminal law, and the handling of cases in these areas is relatively complex.
The combined effects of the covid-19 pandemic, the tense China–United States trade relationship and the economic recession mean that enterprises need to make adjustments against greater risks of bankruptcies, liquidations, closures and business relocations. At the same time, business strategy adjustments may lead to staff redundancies or reorganisations. As a result, the number of collective dispute cases relating to staff redundancy placements is highly likely to increase.