In a recent case in Suzhou, the court ruled that a unilateral termination without notifying a union in advance was unlawful, even though the company itself had no union.

A company sought to temporarily assign an employee to assist other departments. While refusing the temporary assignment, the employee threatened and argued with his supervisor. The police were called to handle the dispute. Afterwards, the company unilaterally terminated the employee because the altercation was a serious violation of its employee handbook.

Although the court agreed that the employee had seriously violated the employee handbook, the court ruled the termination unlawful because the company had failed to notify the upper level union before terminating the employee. According to Jiangsu Province regulations, a company should notify a union of a unilateral termination in advance. If the company has not established a union, then the upper level local union should be informed instead. In this case, the company had no union and did not notify the upper level union. Therefore, the court ruled the termination unlawful and ordered double statutory severance as the legal remedy.

Key take-away points:

National law is silent on whether a company is required to notify the upper level union of a unilateral termination decision if it has not established its own union. However, companies in Jiangsu Province should provide this notification to the upper level union according to Jiangsu regulations. In other jurisdictions such as Shanghai where local regulations do not provide clear guidance, courts would have more discretion in this regard.