★Nutshell
On June 11, 2018, Miss Wang joined a consulting company in Shanghai as an executive secretary. Her basic salary is 3800 yuan per month.
It was agreed in the employment contract that Miss Wang should notice the company in written form 30 days before resignation, or she should compensate one month salary to the company as liquidated damage.
On October 10, 2018, Miss Wang deemed that the company underpaid her housing accumulation funds and conflicted with her colleague.
And then, she verbally resigned to the company leader.
She hasn’t finished the work handover or resignation process when she left the company that day.
After that, as a result of several failed negotiations to let her back or finish the work handover, the company claimed to the labor arbitration to require Miss Wang to pay 3800 yuan as the contract damages specified in the employment contract.
The labor arbitration rejected the claim for beyond its acceptance scope.
The company had no choice but to claim to the court to require Miss Wang to pay 3800 yuan as the liquidated damages specified by the employment contract.
★Issue
The central issue of this case is: Whether Miss Wang should pay the liquidated damages to the company for leave without written notice to the company 30 days in advance, which was against the Labor Contract Law and the employment contract?
The company thinks that since it is employee’s legal obligations to notice the company in a written form 30 days in advance, according to the employment contract, Miss Wang should pay the liquidated damages.
Miss Wang thinks that the reason she left the company is that the company underpaid her housing accumulation funds.
Besides, according to the relevant provisions in the Labor Contract Law, her failure to notice the company in a written form 30 days in advance doesn’t belong to the situations in which liquidated damages can be agreed.
★Judgment
After the trial, the court holds that according to the Article 25 of the Labor Contract Law, the liquidated damages undertaken by the employee can’t be agreed by employer and the employee except for being aroused by that the employee breached the agreement on the term of service, or the competition restriction provisions.
Therefore, such liquidated damages agreement in this case was completely invalid for violating the compulsory provisions.
And all claims of the consulting company were legally rejected by the court.
★Comment by Lawyer Tang
This dispute isw arised from the employee mistake her
The Article 37 of the Labor Contract Law indicated that “A Employee may terminate his employment contract upon 30 days’ prior written notice to his Employer. During his probation period, an employee may terminate his employment contract by giving his employer three days’ prior notice. ”
It empowers the employee to terminate the employment contract unilaterally without any reason.
This right is a forming right, which means as soon as the employee raises a resignation, it will come to effect.
And its purpose is to protect employees’ liberal employment right.
However, if employees are allowed to resign at liberty, it would bring serious damages to the normal business order of the employing units.
Therefore, in order to build harmonious employment relations, and to protect employees’ liberal employment right, this regulation mentioned above also sets an advance notice restriction on the execution of such right to leave enough time for the employer to arrange someone to fill the post.
In this case, Miss Wang’s opinion that it is legal to leave immediately for her employer’s underpaid her housing accumulation funds is wrong.
It doesn’t belong to the statutory situations of immediate termination, and she still has to perform the obligation of 30 days’ prior written notice to her employer.
The court regarded Miss Wang’s failure to perform the obligation of 30 days’ prior written notice as an illegal termination of employment contract.
As the Article 90 of Labor Contract Law of the People’s Republic of China indicates, “If a Employee terminates his employment contract in violation of this Law…… and if such violation or breach causes his Employer to suffer loss, he will be liable for damages”, Miss Wang should undertake the compensation for her illegal act.
Liability to Compensation≠Liquidated Damages.
As the Article 4 of the Compensation Measures of Violating the Employment Contract Regulations Specified by the Labor Law issued by the former Ministry of Labor indicates, although the employer have no right to claim liquidated damages, yet he can ask the employee to compensate for his actual loss caused by the employee’s failure to notice his employer as required by the legal provisions, such as the cost of hiring someone to fill the post temporarily, overtime payment of his colleague to do his work, or the training fee and so on.
Otherwise, because the employers often pay last month salary in the next month, the employer can also deducted the compensation of failure to notice as required by the legal provisions from the employee’s last month salary, which means an unnecessary loss for the employee.
However, we still need to remind the employees that, when the employee decide to exercise his legal right to unilaterally terminate a labor contract empowered by the Labor Law, he shall not just “leave”, and the obligation of prior written notice shall be performed for the labor discipline and the professional ethics requirement, or, he will be required to undertake the legal consequences.
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