In a recent Jiangsu Province case, a court held that a company had lawfully terminated an employee for misusing her sick leave.

The employee joined the company in 2006 and was later promoted to the position of Workshop Quality Manager.  There were a number of client complaints about quality issues and the employer sought to transfer the employee but an agreement could not be reached on a proposed reduction in salary and annual leave.  The employee made a request for a three month period of sick leave which was supported by a hospital certificate. The company paid the employee three months’ sick leave in her capacity of manager, but became aware that the alleged illness did not require such a long period of sick leave, and that the employee had been to Malaysia for one week during the sick leave period.

The company issued a notice of termination to the employee on the basis of her failure to agree to the new work arrangement and her misconduct. The employee challenged the termination and made a claim for severance.  The court held that it was both fair and procedurally lawful for the company to terminate the employee based on the company’s regulations and relevant laws, and dismissed the employee’s claim for severance compensation.

Key Take-Away Points:

This case underlines the importance of having a comprehensively drafted set of examples of misconduct in the company handbook or relevant standalone policy and for the handbook or policy to be lawfully adopted through the legally required employee consultation procedure. This will increase the likelihood of the termination being held lawful.