Fact:
Mr. Yuan migrate to Shanghai for work from February, 2008, in a security company as security staff on the salary of 3000 yuan per month. Both parties signed several labor contracts, and the last one is due on Feb 28th, 2017. The company handbook provides the company can unilaterally terminate the contract if a staff continuously absenteeism for three days or accumulatively for five days in one year. Meanwhile, it also provides 3-day salary will be deducted for 1-day absenteeism. Mr. Yuan signed off the handbook without any objection.
In July 2015, Mr. Yuan went back to hometown for emergency without asking for leave, causing absenteeism from July 27 to July 31, 2015. The company tried to contact Mr. Yuan many times, the no one answered the call. The company sent written notice asking him to report absenteeism reasons, but still no answer. Then the company terminated the contract due to materially breached the company rules.
September 2015, Mr. Yuan went to the company for departure procedures. But no agreement was reached on the salary of July 2015, then he went to labor arbitration for salary 2483 yuan. (3000 yuan/21.75 days *actual working 18 days)
Issue:
The issue of this case is on the effectiveness of the rule provided in the handbook that 3-day salary will be deducted for 1-day absenteeism. The company thinks Mr. Yuan signed off the handbook, so 15-day salary shall be deducted for his 5-day absenteeism. But Mr. Yuan thinks the salary shall be counted on the actual working days.
Ruling:
The arbitration ruled after trial that the company indeed did not pay Mr. Yuan the salary for July 2015, therefore it shall bear the responsibility to make the payment. As to the amount, the arbitration thinks on the one hand no evidence showed that the making of the handbook went through democracy process, on the other hand the rule that 3-day salary will be deducted for 1-day absenteeism has no base in law. So the company shall pay Mr. Yuan 2483 yuan.
Director Tony Tang’s Comment:
This is a case on the effectiveness of handbook.
Firstly, the making of handbook and other company regulations shall go through democracy process. Article 4 in Labor Contract Law provides that When an Employer formulates, revises or decides on rules and regulations, or material matters, that have a direct bearing on the immediate interests of its Employees, such as those concerning compensation, work hours, rest, leave, work safety and hygiene, insurance, benefits, employee training, work discipline or work quota management, the same shall be discussed by the employee representative congress or all the employees. The employee representative congress or all the employees, as the case may be, shall put forward a proposal and comments, whereupon the matter shall be determined through consultations with the Trade union or employee representatives conducted on a basis of equality.
Does that mean any regulation will come to effect if it go through democracy process? In this case, can the regulation that 3-day salary will be deducted for 1-day absenteeism apply to Mr. Yuan if its making went through democracy process? Will the arbitration or court take it as the basis to rule? As least in the present practice, the answer is still negative.
The denial logic lies in 1-day salary can be deducted for 1-day absenteeism, but the other 2-day salary is for the actual work, the deduction inviting suspicion of embezzlement. The Labor Law provides that Employers shall pay their Employees labor compensation on time and in full in accordance with the employment contracts and state regulations.
Take it to a further step, the question is more than embezzlement of 2-day salary. According to Article 38 of the Labor Law that A Employee may terminate his employment contract with severance if his Employer: fails to pay labor compensation in full and on time; Has rules and regulations that violate laws or regulations, thereby harming the Employee’s rights and interests. Therefore the handbook shall be lawfully and reasonable, otherwise it might not be taken by the judiciary authorities when dispute arises due to illegalness or irrationality. An alternative method can be considered in this case for the purpose of punishment. For example, attendance bonus will be deducted for absenteeism or performance bonus will be lowered to 80%. This will be more likely to be taken.
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