In accordance with Article 39 Paragraph 1 Subparagraph 5 of Labor Contract Law of the PRC (hereinafter "Labor Contract Law"), an employer is entitled to terminate the labor relationship with its employee under the circumstance that the employer enters a labor contract with the employee in the condition of being deceived by its employee, which may cause invalidity or partial invalidity of the contract.
It is questionable that whether an employee' s submission of fake resume or education information in his or her job application constitutes fraudulence, and whether it triggers an employer' s legal termination right. Under different circumstances, each court analyzes different situations and balances the benefits between an employer and its employee. Finally, courts stand a point that even if an employee submits a fake resume or untrue information when he/she applies a job, whether it constitutes fraudulence depends on many factors.
II Under which circumstances, will it constitute fraudulence if an employee/applicant submits a fake resume?
Fraudulence means that one party meaningfully informs the counterparty of false statements, or meaningfully conceals actual conditions, which induces the counterparty to mispresent its intention.
A. An applicant/employee intentionally informs false statements or conceals actual conditions.
Under the Labor Contract Law, after an applicant/employee submits a fake resume or false statements, it is fraudulent if 1) an employee' s action is intentional (intentionally informs or conceals); 2) such an employee submits the false information; 3) his/her employer forms false recognition because of the employee' s fraudulent action; and 4) based on the false recognition, the employer expresses its intention, which means that there is proximate cause between the employer' s false recognition and its expression of intention.
Among the above four factors, the fourth element is the focus of disputes. Whether an employer forms false recognition due to the fraudulence varies with courts' different standards for an employer' s duty of care. Therefore, it is hard to define such an element. Generally speaking, in the following conditions, courts may hold that an employer doesn' t form false recognition if 1) an employee has informed his/her employer of submission of a fake resume; 2) after an employer has known the submission of a fake resume by its employee, it still enters/renews the labor contract with such an employee; or 3) when an employer posts its job vacancy without specifying the requirements for experience or education, the employer decides to hire the employee after the probation period .
In the case of (2011) Hu Second Intermediate Civil Three (Civil) No. 535, Shanghai No.2 Intermediate People' s Court held that the employee failed to prove the employer knew or should have known that the employee submitted the false resume when he submitted the job application. Therefore, in the Court' s view, the employee had intent to conceal the false information and the employer was induced to enter several labor contracts with the employee based on the false recognition. It is worthy-noted that the Court did not put emphasis on the employer' s duty of care. With regard to an employer' s duty of care, we will analyze it in the following section.
B. An employer fails to fulfill the duty of care.
Article 8 of Labor Contract Law stipulates the statutory duty of notification for an employer and the employee' s duty of providing necessary information. However, in accordance with the article, the employee' s duty of providing necessary information is limited to directly work-related information which is requested by its employer.
When an employer decides on whether to hire a job applicant, it is important to consider the applicant' s prior experience or education. Therefore, it should emphasize on the employer' s duty of care for the examination of information provided by the applicant. Meanwhile, the basic requirement of duty of care is to specify the requirements for education and prior experience when an employer posts its job vacancy. In addition, an employer should check the applicant' s information if necessary, especially some education information can be checked easily online. Finally, if an employer discovers a false resume, it should claim the invalidity of the labor contract at once. Otherwise, it may lose the right to terminate the labor relationship at will. The time is of essence.
In the case of (2014) First Intermediate Civil No. 05797, Beijing No.1 Intermediate People' s Court supported the above points. The employer claimed the invalidity of the labor contract, after the employee passed the probation period and had worked for the employer over one year. The Court held that this situation is unfair for the employee. The Court also held that the employer failed to provide the evidence to prove that the employer had specified the requirements for the position. As a result, the employer should bear the adverse effects of failure to provide evidence. Meanwhile, the employer failed to check the applicant' s providing information. It failed to fulfill the duty of care. Therefore, the Court ruled that the employee' s action did not constitute fraudulence and the labor contract was valid. Thus, it is illegal for the employer to terminate the contract unilaterally. The employer should pay the damages to the employee.
Even if an applicant submits a false resume at the beginning, and then he/she provides true information when filling in the employee' s basic information form provided by its employer, it may be deemed that the employee' s fulfillment of duty of providing the true information if the employer fails to find the contradictions. It means that the employee' s action does not constitute fraudulence. An employer has the capacity to check the information and owns the duty of care. If an employer concludes a labor contract with an employee and continues to hire the employee after probation period without checking the information, it should deem that the employer admits the employee' s experience and professional ability. Based on the above analysis, an employer is prohibited from terminating a labor contract because the invalidity of contract is triggered by the reason of fraudulence.
In the case of (2012) Hu Second Intermediate Civil Three (Civil) No. 1204, Shanghai No.2 Intermediate People' s Court confirmed that the employer had duty of care to check information. The job applicant submitted a false statement when he provided the resume to a job hunter. In the following, he provided the actual experience information before he was hired. The Court confirmed that the employee fulfilled its duty of telling the truth under Article 8 of Labor Contract Law. The employee did not have intention to deceive the employer or conceal information from the employer. Neither did the employee implement the fraudulence. Under the circumstance that the employer failed to discover the difference between the actual experience and the prior resume, it was not the employee' s fault. Hereby, the employee' s action did not constitute fraudulence. Thus, it is baseless for the employer to terminate the contract based on the Articles 26 and 39 of Labor Contract Law.
However, in the trial cases, courts hold different standards to whether an employer fulfills the duty of care. In the cases of (2011) Hu Second Intermediate Civil Three (Civil) No. 535 and (2018) Hu 01 Civil No. 7516, both courts took considerations of all factors and held the point that whether the employer fulfilled the duty of care was not a decisive factor for the validity of a contract. The courts have a standing that whether a labor contact is valid still depends on whether the employee' s actions constituted fraudulence.
Based on the above cases, the author thinks that it is court' s discretion to decide whether an employer is required to fulfill the duty of care when a court considers the constitution of fraudulence. Usually, courts focus more on the attributes of the employee' s actions. For the standing of an employer, it is beneficial for the employer to fulfill the necessary examination of an applicant' s information when such disputes arise. Therefore, it is recommended for an employer to check an applicant' s information before it hires the applicant. If an employer uses the external human resources to obtain an applicant' s information, it is better to appoint the job hunter to carry out the background check. It is safe for an employer to specify the damages if a job hunter fails to do the background check and provide false information.
III If an applicant submits a false resume, but it does not constitute fraudulence, is an employer entitled to terminate the labor contract?
Based on the analysis, we concluded that courts do not always deem an employee fraudulent if an employee submits a false resume. In this condition, an employer cannot apply Article 39 Paragraph 1 Subparagraph 5 of Labor Contract Law to terminate the contract. Nevertheless, an employer can terminate the contract in other ways.
A. The labor contract stipulates that if the applicant provides false statements, the employer is entitled to terminate the contract.
An employer, as the drafter of the labor contract, has the right to state that “if the employer discovers that the employee provides false statements including in the resume, application form, education and so on, the employer is entitled to terminate the contract at any time.” Although an employer is powerful party in the aspect of employment, the above clause in the labor contact does not violate any law or regulation. Neither does it belong to the standard clause. If an employer terminates the labor relationship based on the labor contract, courts will support it.
In the case of (2015) First Intermediate Civil No. 2091, Beijing No.1 Intermediate People' s Court held that the employee submitted a false resume. However, the employee' s action did not invalidate the labor contract. The labor contract was valid. Furthermore, according to both parties' executing contract, the contract stated that if the employee submitted false statements, the employer had the right to terminate the contract once the condition was confirmed. It also stated that the employer was not required to pay any damages to the employee in such a termination. The Court held that the contract was mutually agreed and it did not violate any law or regulation. Thus, based on this contract, the Court supported the employer to terminate the contract without any compensation.
B. The Employee' s Manuals stipulates that if the employee provides untrue information in the resume or other forms, the employer is entitled to dismiss him/her.
Our labor law protects not only the legal rights of employees but also the rights of employers. An employer can reinforce to restrain its employees through its internal rules or systems, which is an important way for an employer to manage its employees. If the Employee' s Manuals list a condition under which an employee violates the Employee' s Manuals, the employer is entitled to terminate the labor contract under Article 29 Subparagraph 2 and pay no damages to the employee.
In case of (2011) Hu Second Intermediate Civil Three (Civil) No. 535, the Court definitely pointed out that the employee' s submission of a false resume was prohibited by the Employee' s Manuals. Moreover, the employee did not oppose the existence of the Employee' s Manuals. The employer was entitled to terminate the labor contract, which showed the power of management by the Employee' s Manuals. It should be supported. Suzhou Intermediate People' s Court showed the same point in the case of (2016) Su 05 Civil No. 4164.
C. Can an employer apply the principle of honesty and trustworthiness to terminate the labor contract if the contact is valid?
Article 3 of Labor Contract Law rules that conclusion of labor contracts shall comply with the principles of legality, equitableness, fairness, voluntary participation, negotiation and agreement and honesty and trustworthiness. It is not applicable for an employer to terminate the labor contract with the reason of violation of principle of honesty and trustworthiness.
The principle of honesty and trustworthiness is named as a king principle in the civil law. It is also characterized as a general principle in labor contract law. Only if law does not specify the damages for the harmed party, a court is permitted to apply the principle of honesty and trustworthiness to compensate the harmed party in order to avoid unfairness. Except such condition, courts are not allowed to apply the principle directly to make a final judgement. Or it will weaken the specific clauses in the law and lead courts to flee to a general principle. Especially, in labor dispute cases, there are already specific articles stating that the legal termination rights for an employer. Article 8 of Labor Contract Law, it requires an employee to provide the true information, which also demonstrates the principle of honesty and trustworthiness. If a court allows an employer to terminate the contract with general principles, it provides an opportunity for an employer to take advantage of its powerful position to dismiss its employee without causes. It may also cause an employer to abuse the power of termination. As a result, it infringes an employee' s legal rights.
In the case of (2016) Jing 03 Civil No. 3365, Beijing No.3 Intermediate People' s Court held that the employee violated the principle of honesty and trustworthiness when he submitted a false resume to apply for the job. However, the employer did not specify the detailed requirements for the position when it posted the job vacancy and renewed the labor contract for several times. Based on these facts, even if the employee violated the principle of honesty and trustworthiness, it did not constitute fraudulence. In the case of (2014) First Intermediate Civil No. 05797, Beijing No.3 Intermediate People' s Court held the same position. In the case of (2018) Jing 0108 Civil No. 9009, Beijing Haidian District Court once ruled that it was appropriate for the employer to terminate the contract because the employee submitted a false resume and violated the principle of honesty and trustworthiness. However, this judgement was overruled by its appellate court.
After our legal research, we discover that courts apply the principle to the cases as a way of balance of benefits. Courts usually combine the principle with Article 39 of Labor Contract Law to make judgements. Both (2011) Hu Second Intermediate Civil Three (Civil) No. 535 and (2017) Jing 03 Civil No. 11023 aligns with this point.
According to the current cases, we find that our Labor Contract Law provides more protection to employees. Therefore, it is cautious for an employer to terminate the labor contract with employees. As following, there are several recommendations for employers:
1. When an employer posts a job description, it should specify the requirements for the position such as experience, education. The employer should keep this description in record in case of labor disputes. It is noted that Labor Contract Law only requires an employee to answer the employer' s questions truthfully. If an employee provides the extra false information which the employer does not request, the employee' s action does not constitute fraudulence.
2. After an applicant submits all the information, the employer needs to check the information. If such information can be checked online, it is better for the employer to check it. If the employer finds any questions or discrepancies, it should investigate or inquire the applicant on time. Or it is adverse for the employer when the dispute arises.
3. When both parties conclude the labor contract, the employer stipulates the right to terminate the contract without any compensation if the employee provides untrue information.
4. In the internal bylaws or documents, the employer rules that if the employee provides false statements, the employer is entitled to terminate the contract without any compensation at any time. It is noted that these documents should go through democracy procedures. Only after democracy procedures makes it effective and courts will admit it as evidence.