Classical Case Analysis of Labor Disputes in Pudong Court (Part II)

        Last month, this column provided five different types of labor disputes, such as relocation compensation disputes, vague identification of labor relations, workers'false reporting of work experience, failure to sign a labor contract and other profitable activities of workers engaged in non-local work. In this issue, we will use actual cases to analyze the rights and obligations of both sides.

        [Case 1]
         Zhang Mou, formerly vice president of a property management company in Shanghai, did not work for two days and submitted a sick leave form issued by the hospital, but was later found out by the company that Zhang Mou left for Canada during his sick leave. Therefore, the company took Zhang Mou as a serious breach of integrity and company rules and regulations and made a dismissal. Zhang applied for arbitration, demanding that the company pay compensation for illegal termination of labor contract; the company demanded that the compensation should not be paid.
        
         The court held that it was not inappropriate for the employer to terminate the labor contract on the basis of his breach of good faith because Zhang Mou left the country during his sick leave and did not give a reasonable and credible explanation for his departure and sick leave. Remind workers that good faith is one of the principles to be followed in the performance of labor contracts. If the employer violates good faith, the employer may legally terminate his labor contract in accordance with the rules and regulations.

        [Case 2]
         Yang Mou used to be an employee of a management company. The company's employee manual stipulates that if the employee is dismissed or returned to the labor dispatching agency, the company's reward plan is not applicable. Subsequently, the company issued a notice of termination of the labor contract to Yang Mou on the grounds of false reimbursement and serious violation of company rules and regulations. Yang applied for arbitration, demanding that the company pay quarterly bonuses and behavior evaluation awards, etc., but the company believes that according to the regulations, Yang does not meet the conditions for bonus payment, but filed a lawsuit.
        
         In response, the court held that it was clearly illegal for the company to terminate the labor contract with Yang Mou in the absence of sufficient evidence to prove the existence of false reimbursement. When the employing unit is deemed to have terminated the employee's labor contract illegally, the employing unit can't establish the defense of not paying the corresponding bonus according to the rules and regulations.

        [Case 3]
         Zhang Mou joined a gardening and greening engineering company in April 2012. In May 2014, he suffered industrial injury and was identified as Grade 9. Li Mou and Yang Mou are shareholders of the company. In January 2016, the shareholders'meeting passed a resolution to cancel the company. On the same day, Li Mou and Yang Mou promised in the cancellation liquidation report that the company's debts had been liquidated. If there were any outstanding matters, they were willing to continue to assume responsibility within the scope of legal provisions. However, after the cancellation of the company, Zhang Mou failed to claim industrial injury insurance treatment to Li Mou and Yang Mou, and then initiated a lawsuit.
        
         The court held that Li Mou and Yang Mou promised in the cancellation liquidation report that they would continue to be liable within the scope prescribed by law if there were any outstanding debts of the company, but the garden greening engineering company cancelled the registration without liquidation according to law, so Li Mou and Yang Mou should bear the legal consequences of the failure of proof. Therefore, even if the company is registered and cancelled, in order to avoid the company evading legal liability by liquidation, cancellation and other means, and infringing on the legitimate rights and interests of employees, the promised shareholders of the company should still bear the liability for compensation for industrial injury of employees.

        [Case 4]
         Tang Mou was dispatched to an information technology company in Shanghai by a foreign service company to act as a responsible editor. In the company's "Chinese Literature Network", Tang Mou was responsible for the signing of network authors, the editing of network literature, and the maintenance of the relationship between network authors. In July 2012, Tang signed a competition restriction agreement with information technology company. After leaving his post, he joined another network company as director and was responsible for the adaptation and dissemination of online literary works of "a website" co-operated by the company and the company outside the case. Later, an information technology company in Shanghai initiated arbitration, demanding that Tang Mou continue to implement the non-competition agreement and receive support. Tang Mou disagreed with the ruling and claimed that an IT company in Shanghai was not its employer. The competition restriction agreement signed by the two parties was not binding on it, and it did not violate the obligation of competition restriction. Therefore, Tang Mou demanded that the competition restriction agreement should not be fulfilled.
        
         The court held that Tang Mou belonged to the "two high and one secret" personnel whose company could agree on the restriction of competition, so the competition restriction agreement concluded between Tang Mou and the company was legal and valid. According to the scope of business, a network company in Shanghai has a competitive relationship with an information technology company in Shanghai. Therefore, Tang Mou should bear the corresponding responsibility for violating the agreement of the non-competition restriction agreement.
        
         In the labor dispatch relationship, the employer and the employer shall bear the obligation of restriction on competition after signing the agreement of restriction on competition. When there is a competitive relationship between the actual work content and the business content of the employer after leaving the post, the violation of the obligation of restriction on competition shall be determined.

        [Case 5]
         Yao Mou served as Manager of Marketing Department in a Shanghai Enterprise Management Consulting Company. The employers and employees had signed a "Confidentiality and Non-Competition Agreement". Those who violated the obligation of restricting competition should pay a breach of contract damages of 500,000 yuan. After the termination of the labor contract in November 2015, Yao Mou entered a business and trade company in Shanghai to work. In fact, he also provided labor for a website operated by a network technology company in Shanghai. After that, an enterprise management consulting company in Shanghai initiated arbitration, demanding Yao to pay a liquidated damages of 500,000 yuan on the grounds that Yao breached the obligation of restricting competition, and arbitration award that Yao paid 180,000 yuan of liquidated damages. However, the company refused to accept this, filed a lawsuit, and still demanded Yao to pay 500,000 yuan of liquidated damages.
        
         The court held that Yao's conduct did violate the "Confidentiality and Non-Competition Agreement" signed by the two parties and should continue to implement the agreement. At the same time, the court adjusted the extent of Yao's breach of contract, the standard of compensation for Yao's restriction on competition, and Yao's salary, and decided that Yao should pay 270,000 yuan to a Shanghai Enterprise Management Consulting Co., Ltd.
        
         This case shows that workers who violate the non-competition agreement should be liable for breach of contract in accordance with the law. If both parties agree on a penalty for breach of contract, they should generally comply with the agreement. If the amount of liquidated damages agreed upon by the parties is too high or too low, the court can make a comprehensive judgment based on the subjective malicious degree of workers'breach of contract, the facts of actual breach of contract, the amount of compensation for workers' competition restrictions, the benefits of workers'breach of contract (wage standard of the new unit), and the losses caused by workers' breach of contract to the employing units.