In a recent case reported on April 10, 2014, The First Intermediate People’s Court of Chongqing ruled that a company’s unilateral Chongqing lawful. The People’s Court ruled that the Employment Contract Law requirement to notify a company labor union of the reasons for a unilateral termination is inapplicable if a company has yet to establish a company labor union among its employees.
An employee in Chongqing abused and assaulted one of his colleagues during a dispute. According to the employer’s company policy, the employer could unilaterally terminate the employee
for this behavior. The employer terminated the employee under Article 39 of the Employment Contract Law for seriously violating company policy. However, the employer did not notify a labor union of the unilateral termination, because no company union had been established.
After being unilaterally terminated, the employee sued the employer for illegal termination. The employee claimed that the employer failed to provide advance notify to a labor union of the reasons for unilateral termination as required under Article 43 of the Employment Contract Law and a Supreme People’s Court guiding opinion (“SPC Opinion”) . Additionally, the employee argued that the SPC Opinion directs the People’s Court to order
compensation for the employee if the employer fails to notify the labor union in advance of the unilateral termination and fails to make remedial notification to the labor union of the termination before the employee brings a suit, even if the unilateral termination satisfied all other legal requirements.
The Yubei District People’s Court and the Chongqing First Intermediate Court both dismissed the employee’s claim for compensation. The Chongqing First Intermediate Court ruled that an employer is not required to establish a labor union. Therefore, the employer is not required to notify a labor union in order
to unilaterally terminate an employee if the employer has not established a labor union.
This case shows that the People’s Courts in Chongqing do not require employer notification to a labor union to unilaterally terminate an employee if the employer has not established a labor union. However, courts in other cities might still require some form of labor union notification. For example, a court might require an employer to notify an upper level labor union, e.g. a district- level labor union, of the reasons for unilateral termination if the company has not established a company labor union.