Recently, Beijing’s No.1 Intermediary Court highlighted in its briefing on April 28, 2015 that mixed employment between affiliated companies has been a major factor behind labor disputes, especially for internet companies. In one exemplary case, an employee signed an employment contract with one company (“Company A”), which shared the same legal representative, managers and supervisors with its controlled company (“Company B”), and the two companies took turns paying the employee’s salary and social insurance. However, Company A did not renew the employment contract with the employee upon its expiration, which led to a labor dispute. The judge in the dispute ultimately found that because of the mixed employment relationship between the two companies and the lack of a contract describing the employment relationship, the two companies should be jointly liable to the employee for any unpaid salary. Therefore, this case creates a precedent for holding multiple employers jointly liable for employee grievances when such employee is shared among the employers.
China