★Nutshell
In April 2017, Mr Yang joined a department store in Shanghai as a network administrator.
In January 2018, he didn’t feel well and asked his leader in charge to approval his annual leave. With the permission of his leader, he had a rest at home for two days.
But unexpectedly, on January 31, 2018, Mr Yang was fired by the department store for leave without approval. And his behavior was regarded as absenteeism which violated the company discipline. Then, the company completed the formalities of unemployment in the online social insurance system. But Mr Yang’s certification of unemployment and labor manual was still kept by the company.
On February 26, 2018, Mr Yang claimed to the labor arbitration. After “one adjudication, two trials”, the legal department confirmed that the commercial company should pay double compensation for the illegal termination.
During the trial, Mr Yang can’t apply for the unemployment insurance benefits and the medical insurance benefits during the period of the unemployment due to lack of the certification of unemployment. And the medical expenses happened during trial also can’t be covered by medical insurance, which was too heavy for Mr Yang to afford and made his life tougher. Mr Yang has no choice but to claim to the labor arbitration again on February 14, 2019 to require the department store to give him his certification of unemployment and labor manual, and to compensate for his loss caused by its failure to handle the formalities of dismissal in the time prescribed by the law, including the loss of unemployment benefits and the corresponding loss of medical insurance benefits.
★Issue
The issues of this case are :
- Whetherthe commercial company should compensate Mr Yang for its failure to handle the formalities of dismissal in the time prescribed by the law after terminated the employment relationship?
- Whetherthe loss of medical insurance benefit falls in the compensation items for its failure to handle the formalities of dismissal in time?
Mr Yang thinks that the company illegally terminated the employment relationship, and failed to handle the formalities of dismissal in time. So it should compensate for his loss of unemployment benefits and medical insurance benefits.
The company thinks that since Mr Yang required the labor arbitration to restore the employment relationship, which means he didn’t want to leave the company and may go back to work, it is legal to keep the certification of unemployment and the labor manual as his employer. Therefore, the resulting losses should be undertaken by himself.
★Judgment
After the trial, the court holds that it is employer’s legal obligations to complete the formalities of dismissal within 15 days after the termination of employment relationship. So the department store should compensate Mr Yang for his economic loss happened in the period from February 16, 2018 to February 15, 2019, caused by its failure to handle the formalities of dismissal in time. The compensation should be calculated based on the Shanghai unemployment benefits standard of 1815 yuan per month. As for the part before February 16, 2018, it can’t be supported
for it is beyond the time limitation of labor dispute arbitration. What’s more, Mr Yang’s requirement of the compensation for his medical expenses happened in the period of no dismissal formalities also can’t be supported for lacking of legal basis.
★Comment by Lawyer Tang
This employment dispute is arised from the employer’s failure to handle the formalities of dismissal in time as prescribed.
As the Article 50 of the Labor Contract Law of the People’s Republic of China indicates, it is employer’s legal obligation to complete the formalities of dismissal within 15 days after the termination of employment relationship. If the employer refuses to perform the legal obligation and fails to handle the formalities of dismissal in the time prescribed by the law, or remains the employee’s certification of unemployment and labor manual, it will be required to compensate for the employee’s resulting loss, such as the unemployment insurance benefits or the chance of job registration.
In this case, the department store misunderstood the termination time of employment relationship. When it issued the Notice of Termination of Employment Relationship to Mr Yang, the employment relationship has been terminated. Even if Mr Yang claimed to the labor arbitration to restore the employment relationship, the employer’s legal obligation to handle the formalities of dismissal as prescribed was unable to be exempted.
In that way, how much should the commercial company pay to compensate for its failure to handle the formalities of dismissal as prescribed?
Taking Shanghai as an example, as the article 5, paragraph 1 of the Notice of Shanghai Labor and Social Security Bureau on Regulation of Shanghai Municipality on Labor Contract indicates, the compensation should in principle be calculated based on the relevant regulations of unemployment insurance, but if the employee can prove what his has actual lost, the compensation should be limited to the actual loss.
Mr Yang has been unemployed since he was fired. But he was unable to get his unemployment benefit for lack of the formalities of dismissal. So the court’s decision that the department store should compensate Mr Yang for his unemployment insurance benefits is legal and reasonable.
As for the medical insurance benefits during the period of unemployment benefits, Mr Yang thinks that as the Article 6 of the Notice of the Medical Insurance Benefits During the Period of Unemployment Benefits (published by the Ministry of Human Resources and Social Security (MHRSS), 2011, no.77) indicates, “The employees with unemployment insurance benefits shall enjoy the corresponding medical insurance treatments such as hospitalization and outpatient therapy since the first month joined the employees’ basic medical insurance, and the period of the medical insurance benefits is consistent with the period of the unemployment insurance benefits.” If the company had successfully handled the formalities of dismissal for him in time, then he would be able to apply for unemployment insurance benefits and obtain corresponding medical insurance benefits. But at present, such requirement has no legal basis. And therefore, it can’t be supported by the court.
As a reminder, it’s employer’s legal obligation to handle the formalities of dismissal in the time prescribed by the law after discharged the employment contract, otherwise the employer would be required to bear the corresponding legal consequences.
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