★ Brief
On 2 June 2017, Zhang joined a shoe company and the company paid Zhang’s social insurance from July 2017 to January 2020.
On January 15, 2020, Zhang unilaterally terminated the labor contract by sending a notice of termination which recorded: “…… company regulation says that, social insurance won’t be paid on the month without full attendance. When I first joined the company, the personnel department arranged to report to the Chuansha shop under Gu on June 1, Gu actually then let me join on the 2nd …… which led to my social security cut-off for the month. Now I am determined to propose the termination of the labor relation for this illegal behavior and , claim economic compensation for the termination of labor contract ……”
On 20 January 2020, Zhang applied to the Shanghai labor arbitration committee, requesting the company to pay RMB 8,966.31 economic compensation for the termination of the employment contract. The arbitration did not support Zhang’s request. Zhang was not satisfied and filed a lawsuit. The court of first instance did not support Zhang’s claim, and Zhang later appealed against the first instance judgment.
In February 2020, the company paid the social insurance premiums for Zhang for June 2017.
★The verdict
The court of second instance upheld the first instance judgment after hearing the case. The court held that: although according to the law, if the employer failed to pay social insurance for the employee in accordance with the law, the employee may terminate the labor contract and request the employer to pay economic compensation for the termination of the labor contract. However, the purpose of the law stipulating this article is to urge all parties to perform the labor contract in good faith whether it is the employer or the employee shall exercise the rights and perform the obligations without violation of the principle of honesty and credit. Zhang joined the company on 2 June 2017, and the company paid social insurance for Zhang continuously from the following month until the termination of the employment between the two parties, and it was difficult to find that the company had the subjective malice of not paying social insurance in accordance with the law. The economic compensation claim of Zhang is not sufficient evidenced, thus the court did not support.
★ Comment of Lawyer Tang
According to the Labor Contract Law, the employer’s failure to pay social insurance contributions for the employee in accordance with the law may be used as a reason for the employee to terminate the labor contract. It is the basic obligation of the employer to pay social security contributions in accordance with the law. However, the criteria for calculating labor remuneration and social security contributions are often complex in practice. Therefore, the employer’s failure to pay social security contributions due to subjective malice can be used as a reason for the worker to terminate the contract. However, if the employer indeed has failed to pay social insurance contributions due to objective reasons, it cannot be used as a basis for the worker to terminate the contract.
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