Answer: Employment law does not have a specific provision regarding the consequences if an employer reneges on its commitment after finalizing an employment contract. But from civil law angle this employer ought to assume the “contractual negligence liability ” under Chinese civil law, namely liability of one party who violates the basic principle of good faith and fair dealing and who ought to compensate the loss of the other.
For example, in the case of Li Ziyi before the Third Intermediate Court of Beijing in 2022, the court held that when recruiting employees, the employer had reached an oral agreement with the candidate on RMB 9,500 in probation period and RMB 10,500 in formal employment, but when the candidate was enrolling, the employer repented and changed the wage to RMB 7,200 in probation period and RMB 9,000 in formal employment, resulting in the failure of the employee to sign employment contract and enrolment. The court ordered the employer to pay the employee discretionary damages of RMB 9,000 on the grounds that the employer violated the principle of good faith.1Civil Judgment of the Second Instance of Labor Dispute between Beijing Dianqu Education Technology Co., Ltd. and Li Ziyi Civil Judgment of the Third Intermediate People’s Court of Beijing (2022) Jing 03 Min Zhong No.5622
This is a rare case of contractual negligence liability in concluding an employment contract. From the legal point of view, employees can also choose to require the employer to fulfill the original commitment of the employment contract. Conversely, if the employee has reached the main conditions of the employment contract with the recruitment employer, but repents and refuses to enter the role, he may also be liable for compensation for losses.
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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
- 1Civil Judgment of the Second Instance of Labor Dispute between Beijing Dianqu Education Technology Co., Ltd. and Li Ziyi Civil Judgment of the Third Intermediate People’s Court of Beijing (2022) Jing 03 Min Zhong No.5622