★Nutshell
In January 2009, Mr Xu signed an open-ended employment contract with a bank’s Shanghai branch which contains the declassification period. And he was appointed as the general manager of the Department.
In July 2016, Mr Xu applyed for resignation for personal reason.
The branch approved his application and informed him that his declassification period is from July 11, 2016 to October 11, 2016.
Moreover, his post was transferred to administrative, which means his salary is also adjusted according to the treatment of administrative post.
On October 25, 2016, the employment relationship between the two parties was terminated.
October 19, 2017, Mr Xu claimed to the labor arbitration to require his employer to pay him the quarterly bonus for the third quarter, and the allowances as the festival allowance for the Mid Autumn Festival and the National Day, living allowance and so on, same as the original post.
★Issue
The issues of this case are :
- Whether the salary and bonus in his declassification period could be adjusted according to the transformation of the post?
- Since no written agreement has been reached before, whether the company must pay him the allowances such as festival allowance?
Mr Xu thinks that the company should pay him the quarterly bonus for the third quarter according to its internal salary management regulations.
As for the allowances as the festival allowance for the Mid Autumn Festival and the National Day and living allowance, he deserves the payment as his colleagues.
The company believes that whether to pay the quarterly bonus is its employment autonomy .
And in the declassification period, Mr Xu’s job content is different from his original secret related post.
Therefore, even if the bonus should be paid, its payment standard can’t be the same as his original secret related post.
So, Mr Xu’s claim on the allowances such as the festival allowance for the Mid Autumn Festival and the National Day and living allowance has no corresponding basis.
★Judgment
The labor arbitration thinks that since the work nature and trait has been changed a lot in Mr Xu’s declassification period, his claim of the quarterly bonus according to his former post treatment is baseless.
Besides, since there is no agreement on the festival allowance and the living allowance between the employer and the employee has been reached before, the claim of such allowances shall not be supported by the labor arbitration.
★Comment by Lawyer Tang
This dispute is arised from the employer’s alteration to the employee’s salary, bonus and welfare in the declassification period.
The declassification period was first stipulated in the Notice on Several Issues Concerning the Mobility of Employees issued by the former Ministry of Labor in 1997 which indicates that “When the employer conclude an employment contract with the employee who keeps the business secret, it is legal to be agreed that the employer could adjust employee’s work post and change the relevant contents of the employment contract within a certain period of time (no more than six months) before the termination of the employment contract or after the employee’s resignation. ”
Whether this clause is still in force has aroused a hot debate after the introduction of the Labor Contract Law of the People’s Republic of China. One view is that the declassification period regulation should be invalid according to the principle that the higher-level law is superior to the lower-level law, because it conflicts with the Article 37 of the Labor Contract Law of the People’s Republic of China.
In another view, the regulation “30 days’ prior notice of resignation” is a provision on establishment of rights.
And because right can be waived, the agreement between the employee and the employer about the declassification period would exclude the application of the regulation mentioned above.
In this regard, there are different opinions in judicial practice, and the current mainstream view is the second one.
However, the premise to use the declassification term is that there must be a prior and effective agreement on the declassification term.
Three conditions must be met for the agreement to be valid: the employee’s post is related to the business secrets; the form of declassification term article is legal; the declassification measures are reasonable.
Many employers misunderstand the meaning of this article, and regard the declassification term as a “standard terms” of the employment contracts. They force all their employees to sign the declassification period agreement even if his post isn’t related to the business secrets.
Under such article, the employees are required to work another 6 months after resignation.
There’s no doubt that such agreement is definitely illegal!
The employers could only ask the employees related to the business secrets to sign the declassification period article.
The agreement of the declassification period must be reached in written form when they signed the employment contract.20120
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