In a recent case decided by the Shanghai First Intermediary Court, Company A terminated an employee’s employment contract during the employee’s probation period on the grounds that the employee’s former experience was far beyond Company A’s business needs and it could not afford the management cost. Two days following the termination, and before the expiration of probation period, Company A issued another termination notice to the employee stating that the employee’s resume contained fraudulent information, and that the employee had refused assignments and had several unexcused absences. The judge in the case opined that termination notices are effective upon delivery to the employee, so the judge would only consider the first termination notice in deciding whether the termination was wrongful. As a result, the judge ultimately decided that Company A had performed a wrongful termination and that it shall bear the related liabilities. This case is a reminder that when issuing termination notices, employers should ensure that the reasons for the termination are compliant with PRC law to avoid disputes.
China