Answer: Forced resignation may attract liabilities of economic compensation and damages for forced resignation. This damages is different from the punitive damages due to illegal termination of employment relationship. It refers to the liability employers must assume as stipulated in Article 85 of the Employment Contract Law: if an employer involves unjustified arrears or deductions of wages and overtime wages, wages payment lower than local minimum wage, or failure of payment of economic compensation, and subsequently fails to rectify the issues(s) after the labor department orders a correction, the employer is liable to pay the damages ranging form 50% to 100% of the amount owed.¹It should be noted that this damages are totally different from the punitive damages for illegal termination under Article 87 of the Employment Contract Law.

That is to say, if an employee is forced to resign under employment law, they not only have the right to request the employer to pay economic compensation, but also may ask the employer to pay additional damages when certain conditions are met. According to the provisions of that article of the Employment Contract Law, the aforementioned conditions are: first, employee must first complain to the labor department about the wage arrears, wage lower than local minimum wage, and failure of payment of economic compensation, etc.; second, the employer fails to respond to the labor department’s correction order, the necessary pre-processing.

At present, the vast majority of court cases stipulate that the pre-processing of the labor department is the prerequisite for the damages, including the cases from Guangzhou, Shandong, Ningbo and Jiaxing courts in Zhejiang Province.²Civil Judgment of the Second Instance of Labor Dispute between Qu Jianzhong and Heli Forklift Co., Ltd. Civil Judgment of the Intermediate People’s Court of Jiaxing City, Zhejiang Province (2019) Zhe 04 Min Zhong No.487. Li Sicong, Ningbo Beilun Zixuan Entertainment Management Co., Ltd. and other civil judgments of the second instance of labor disputes, Zhejiang Ningbo Intermediate People’s Court Civil Judgment (2021) Zhe 02 Min Zhong 4911. Liao Liping, Guangzhou Ruisheng Yanxi Trading Co., Ltd. and other civil judgments of the second instance of labor disputes, Guangzhou Intermediate People’s Court of Guangdong Province, Civil Judgment (2021) Yue 01 Minzhong No.26149. Guo Jian and COFCO Biochemical Energy (Gongzhuling) Co., Ltd. Labor Dispute Review Case Jilin Provincial People’s High Court Civil Ruling (2016) Ji Min Shen No.922. Civil Ruling on Labor Dispute Civil Application for Retrial Review by Pei Xiangqin and Weihai Keyuan International Freight Forwarding Co., Ltd. Civil Ruling of Shandong High Court (2022) Lu Min Shen No.10218.However, this is a very obscure claim item. In the practical cases we have seen, virtually none of employees took administrative complaint measures but directly initiated employment arbitrations for this damages; therefore their claims for the damages were not supported.

The case of Wu Hanmin before Hubei Provincial High Court in 2017 is a rare opposite case. The court held that the lower court’s view that the damage is subject to the administrative pre-processing is a mistake in applying the law, and directly changed the judgment to employee being entitled to the damages.³Civil Judgment on Labor Dispute Retrial of Wu Hanmin and Wuhan Baoan Group Co., Ltd. Civil Judgment of Hubei High Court (2017) E Min Zai No.398.

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Mr. Wangdong

Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.

Email: wangdong@royalaw.com

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  It should be noted that this damages are totally different from the punitive damages for illegal termination under Article 87 of the Employment Contract Law.
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  Civil Judgment of the Second Instance of Labor Dispute between Qu Jianzhong and Heli Forklift Co., Ltd. Civil Judgment of the Intermediate People’s Court of Jiaxing City, Zhejiang Province (2019) Zhe 04 Min Zhong No.487. Li Sicong, Ningbo Beilun Zixuan Entertainment Management Co., Ltd. and other civil judgments of the second instance of labor disputes, Zhejiang Ningbo Intermediate People’s Court Civil Judgment (2021) Zhe 02 Min Zhong 4911. Liao Liping, Guangzhou Ruisheng Yanxi Trading Co., Ltd. and other civil judgments of the second instance of labor disputes, Guangzhou Intermediate People’s Court of Guangdong Province, Civil Judgment (2021) Yue 01 Minzhong No.26149. Guo Jian and COFCO Biochemical Energy (Gongzhuling) Co., Ltd. Labor Dispute Review Case Jilin Provincial People’s High Court Civil Ruling (2016) Ji Min Shen No.922. Civil Ruling on Labor Dispute Civil Application for Retrial Review by Pei Xiangqin and Weihai Keyuan International Freight Forwarding Co., Ltd. Civil Ruling of Shandong High Court (2022) Lu Min Shen No.10218.
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  Civil Judgment on Labor Dispute Retrial of Wu Hanmin and Wuhan Baoan Group Co., Ltd. Civil Judgment of Hubei High Court (2017) E Min Zai No.398.