16 August 2016

Suggestions on Employers’ Prudence about “Deemed as Voluntary Quit” Regulation

This article was written by Luo Ai(partner)Xie Minru(assistant associate).

An announcement from Ministry of Human Resources and Social Security of the People's Republic of China (MOHRSS) comes out that “Letter of the General Office of the Ministry of Labor on Answer to Whether Disputes Arised from Determining Employees’ Leaving without Permission as Voluntary Quit Falls into the Scope of Labor Disputes” is officially abolished on April 13th ,2016, while “Letter of the General Office of the Ministry of Labor on Answer to Definition of Voluntary Quit and Termination by Absenteeism” remains in effect.

In the absence of consistent and particular laws and regulations, can the employment relationship between employers and employees be immediately terminated, pursuant to the term, if formulated in employer’s rules and regulations, that “employees’ absenteeism over three working days is deemed as voluntary quit initiated by employees”? This article, by analyzing several judicial cases, attempts to offer some feasible suggestions concerning the question above.

1. Judicial Practice

The recent judicial decisions by tribunals come up with inconsistent opinions with regard to whether employees’ absenteeism is deemed as voluntary quit. Two of the most common practice are as follows.

a. Presumed Termination of Employment Relationship

In Shangjia Corp. v. Chenmin, the tribunal rules in favor of the employer’s regulation “deemed as voluntary quit”, holding that where employee’s leaving work is over a long period of time and falls without the scope of the Art. 38 of Labor Contract Law of the P.R.C., such absenteeism can be deemed as termination of labor contract initiated by employees with personal reasons, and confirms the employer’s claim that the employee has quit the job pursuant to the “deemed as voluntary quit” regulation. 

Additionally, another case also draws our attention. In Zhaojian v. Jinjiujiu Corp., the tribunal’s opinion confirms the legal efficacy of employees’ unilateral action to terminate the labor contract, holding that employees’ returning work uniforms before leaving, even without any request for termination of labor contract, shall be deemed as voluntary quit. 

Therefore, the tribunals’ opinions discussed above are in favor of the argument that employees can terminate the labor contract by either an expressive request for termination or a presumable action to terminate. In this regard, the official termination initiated by employers is not required since the employees’ leaving without permission is deemed as voluntary quit, pursuant to the “absenteeism deemed as voluntary quit” regulation. 

b. Employers required to initiate termination

Contrary to the aforementioned opinions, there remain a large number of tribunals against the “deemed as voluntary quit” regulation as legal basis to terminate employment relationships, holding that employers are required to initiate termination of employment relationships.

In Niulu v. Changfa Corp., the tribunal holds that the employment relationship between employers and employees turns into suspension of performance in the case of employers’ failure to terminate the labor contract as well as to require employees back to work by tracking their attendance, while employees do not show up at work and not request for their wages. Such employment relationship may come into termination under certain subsequent circumstances, such as bankruptcy of employers.

The Art. 14 of “Summary of Minutes of the Symposium on Application of Law in Labor Dispute Cases” provides: “It can be determined that none of labor rights and obligations exists between employers and employees during the long period of time when employees fail to work for employers and employers fail to pay employees for their work in the meantime.” In this respect, employees’ absenteeism does not necessarily lead to termination of employment relationship, while the employment relationship could turn into suspension of performance. 

Further, in some trials between a corp. v. Mr. Li in Beijing courts, the tribunals disagree with the argument that the term “employees’ absenteeism over three working days is deemed as voluntary quit” in “Employee Manual” is consistent with laws and regulations, holding that employers shall initiate termination of employment relationship where they are aware of employees’ absenteeism.

Therefore, the “absenteeism deemed as voluntary quit” regulation fails to serve as the legal basis for immediate termination of employment relationship. Provided that employers fail to promptly respond, the employment relationship could stay in effect, and accordingly tribunals are likely in favor of employees’ claims to return to work or for their wages from employers, if such disputes are put before the court.

2. Practical Suggestions 

Given the inconsistent opinions in current judicial practice, it is advised that employers be cautious about the “absenteeism deemed as voluntary quit” regulation. For the purpose of prevention of legal risks, employers are advised in this article to take the following measures, other than collecting employees’ records of absence from work.

  • Delivering a written notice of returning to work. Employers, under the responsible commitment for employees, shall send out a written notice of returning to work and ask employees back to work or to complete the termination procedure.
  • Requiring for employees’ submission of termination in writing. Where employees’ absenteeism is triggered by personal reasons to quit, employers shall require employees to submit written application of termination.
  • Delivering the termination notice of labor contract. Where employees fail to respond or return to work after receipt of the notice mentioned in paragraph 2.a., employers, on the ground of serious violation of labor disciplines and regulations by employees, may initiate termination of labor contract and deliver the corresponding notice to employees.

In conclusion, it is advisable for employers to stipulate employees’ absenteeism as one of the serious violations of employers’ rules and regulations. Under the circumstance of employees’ absenteeism, employers may terminate the labor contract pursuant to the Art. 39 of Labor Contract Law of the P.R.C. Given the inconsistent laws and opinions in current judicial practice concerning the “deemed as voluntary quit” regulation, where employers fail to make a prompt response to employees’ absenteeism, their employment relationship could likely turn into an uncertain legal status, imposing unnecessary liabilities upon employers. Therefore, it is suggested that employers be cautious and prudent with regard to the “deemed as voluntary quit” regulation.

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