Basic information:

Appellant (defendant of the original suit): Beijing branch of Tianyin Communication Co., Ltd.

Respondent (plaintiff of the original suit): He Qixian

Court: Beijing Second Intermediate People’s Court

Case number: (2014) Erzhong Min zhong Zi No. 03833

Key Points of the Judgment:

The salary of the untaken annual leave is in essence remuneration and the special arbitration limitation period stipulated in Article 27, Section 4 in Mediation and Arbitration of Labor Disputes Law should apply.

Key Facts:

On June 1, 2007, He Qixian (“Employee”) joined the Beijing branch of Tianyin Communication Co. Ltd, (“Company”) as a sales promoter. Her average salary was RMB 2,000 each month. The last employment contract between the parties was to expire on August 18, 2015.

On December 26, 2012, the Employee sent a termination notice to the Company on the ground that she was not provided with annual leave and was underpaid. The Company received the notice on December 28, 2012.

The Employee later filed for arbitration and brought the case to the court, claiming for the salary for untaken annual leave from January 1, 2008 to December 26, 2012 in the amount of RMB 4,598.

The court of the first instance judged that the company paid the Employee salary for the untaken annual leave from January 1, 2008 to December 26, 2012 in the amount of RMB 4,299.89 and partly supported the Employee’s other claims.

The Employee appealed to the court of the second instance.

Judgment:

The court of the second instance rejected the appeal and sustained the first instance judgment.

Reasoning:

The salary for untaken annual leave is in essence remuneration and should be subject to the special arbitration limitation period.

Source of Case: Judgment Document Website

KWM Comment: Whether claims concerning the salary for untaken annual leave are subject to the general arbitration limitation period or the special limitation period depends on the nature of the salary. Some maintain that salary for untaken annual leave is in essence remuneration and the special limitation period applies; others believe that it is benefit and compensation, and the general limitation period applies. Beijing courts vary from each other on this issue at present. The answer needs to be clarified by the relevant authorities.