The Amendment of the PRC Population and Family Planning Law has been officially implemented as of January 1st, 2016. The aforementioned Amendment has changed China's previous one-child policy to one that encourages couples to have a second child, establishing the “two-child policy”, under which couples are allowed to have additional children if legal requirements are met.

The issue to be addressed here, is whether an employer may terminate an employee’s employment contract, if the latter violates the national family planning policy by giving birth to a third child. This issue has baffled employers for a long time, over which no unified opinions have been formed in judicial practice.

From the perspective of national laws, in order to protect employees’ working rights, the employers’ rights of unilateral termination are strictly restrained. An employee’s violation of family planning policy is not listed as one of the scenarios explicitly defined by the PRC Employment Contract Law, in which the employer has the right to unilaterally dismiss a concerned employee. In addition, Article 5 of the Special Rules on the Labor Protection of Female Employees states that “the employer shall not …dismiss or terminate the employment contract with a female employee due to her pregnancy, childbearing or breastfeeding”. The aforementioned rule does not distinguish legal and illegal “procreation”, meaning employers need to act with extreme caution when handling a female employees’ violation of family planning policy.

On the other hand, as a special national policy formulated in a specific time, the PRC Population and Family Planning Law states that in the event where a person gives birth to a child in violation of the family planning policies, she is required to pay a Social Child-raising Fee. In addition, if such violation is committed by state functionaries, he or she shall be given administrative punishment, while people other than state functionaries shall be given disciplinary punishment by their employers. The aforementioned rule does not specify the scope and limit of “disciplinary punishment”, resulting in uncertainties of judicial authorities’ views on the employers’ decision of termination.

We notice that some courts (e.g. some courts in Beijing) are quite conservative when dealing with cases regarding the dismissal of female employees violating the family planning policy. Such prudence might be correlated, to some degree, to the looseness and adjustment of the national family planning policy.

Review of several cases

In Installation Engineering Co., Ltd. of First Bureau Group of CSCEC versus Sun Yan [(2014) Beijing Second Intermediate People’s Court Civil Judgment No.08745], the company submitted several kinds of internal regulatory documents which specified the company’s right to impose disciplinary actions on employees in violation of the family planning policy. In respect to employees “whose violation of family planning policy was serious, resulting in relatively great impact”, the company had the right to unilaterally terminate their contracts immediately. In the meantime, the company submitted a written explanation of adverse impact caused by employee’s violation of family planning policy. However, the court held that regardless of the abovementioned explanation, the company failed to submit other evidence so as to prove repercussions caused by the employee’s violation, thus held the company’s termination decision was illegal.

In China People’s Liberation Army Daily Printing House versus Lv Hongjie [(2015) Beijing Second Intermediate People’s Court Civil Judgment No.10587], one focus of the disputes between the company and the employee was whether the company had publicized the rules and regulations based on which the termination decision was made. The company alleged that it published the requirement of family planning rules on factory newspapers and hung them on the walls of workplace, and it also organized several sessions of employee group study in order for them to learn about related rules. Relevant witnesses also testified that they were aware of the company rules that employees who gave birth to a second child would be dismissed. However, the court held that evidence of factory newspapers and witness testimony were not enough to establish that relevant rules and regulations had already been communicated or publicized to employees. Therefore, the company’s termination decision was held illegal by the court.

Based on the above cases, although the courts did not directly deny the company's right to terminate female employees in violation of family planning policy according to its internal rules and regulations, they might examine the evidence submitted by employers in a quite picky manner when hearing specific cases.

In a case regarding wrongful termination published on Announcement of Jiangsu Province Higher People's Court in 2014 (Liu Jingjing versus Jiangsu Jinli Fertilizer Co., Ltd.), the court’s judgment reflects the judicial authorities’ conservative tendency towards the dismissal of female employees who violate national family planning policy. “In the event where employees violate regulations regarding family planning, even if they are required to assume corresponding administrative liabilities, the employer shall not terminate their employment contracts based on such violation”, said the court in the judicial verdict.

Loosening national family planning policy might lead to changes in judicial criteria

The implementation of birth control policy in China is a measure of expediency under special circumstances of the nation. With population growth gradually got under control and the increasingly severe problem of an aging population, national policies, laws and regulations have gradually liberalized the restrictions on birth control. In response to changes in attitude from the general public, judicial authorities might also adjust their views on cases regarding employees’ violation of family planning policy. Despite the fact that in certain cases courts in areas as Guangdong Province recognized the employers’ decision of dismissing employees due to their violation of birth control policy, with loosening national family planning policy, it is much likely that weakening intervention of employers in employees’ birth giving will become a more common practice, which is more consistent with the social cognitive trend.

Employer’s strategy in dealing with employees’ violation of family planning policy

From the perspective of employee management, different entities may adopt different strategies. For instance, national authorities should impose severe disciplinary actions on civil servants pursuant to relevant rules of CPC and the government. State-owned enterprises and institutes, those who pay more attention to implementing family planning policy, may continue their previous practice regarding disciplinary actions imposed on employees in violation of family planning policy. However, for general companies, they are advised to take a relatively moderate measure when dealing with employees violating birth control policy. For example, companies may terminate the employees’ employment contracts through mutual negotiation. Also, companies may stipulate in their internal regulations that employees whose birth giving do not conform to national family planning policy will receive salary during their maternity leave based on the standards of sick leave or personal leave. However, the employer will face certain legal risks if it immediately dismisses the employee who violates family planning policy on the basis of severe violation of its internal regulations.

Employer’s internal management should be maintained with reasonable limits

In terms of protecting employees’ working rights, employee management conducted by employers should be maintained within particular scope and limited involvement. Generally speaking, the employer is not advised to regulate or manage employees’ personal life outside the workplace. In addition, employers should refrain from taking disciplinary action on employees’ behaviors in violation of administrative regulations that are not related to work. Therefore, it is advisable for employers to review and adjust their internal management strategy in a timely manner, so as to avoid as far as possible interfering in employees’ personal life, and focus on management of the matters directly related to employees’ performance of the employment contract.