Answer: The period for computing double-wage damages is the same as that during which employers illegally fail to sign written employment contracts with their employees. Although the former is determined according to the latter, it is affected by three factors: the first is the type of liability for not signing an employment contract (including the new employee, the expiration of a fixed-term contract, and the situation where a permanent contract should be signed), the second is the maximum compensation period under the legal rules (that is, the 11-month or 12-month time limit caused by the automatic conversion of the contract to an indefinite period after one year), and the third is the limitation of arbitration.
The first factor is that there are three different types of liability for not signing an employment contract.
The first type is the situation of a new employee. If the employer fails to sign an employment contract with the employee for any period of time within 11 months from the next day of one month after the date of employment commencement (that is, the date of starting work) to one year after the date of employment commencement, it shall pay double-wage damages for that period. For example, courts in Guangdong Province and Henan Province, according to Article 14 of the Employment Contract Law, which stipulates that an employment contract shall be deemed to have been signed if it has not been signed for one year, hold that the period after the contract has not been signed for one year shall not be included in the period of compensation for double-wage damages.[Article 14 of the Employment Contract Law stipulates that if an employer fails to conclude a written employment contract with a worker within one year from the date of employment, it shall be deemed that the employer and the worker have concluded a permanent employment contract. Therefore, courts around the county hold that the employer’s obligation to double-wage damages is terminated at the end of one year. Zhengzhou Qunjie Financial Management Consulting Co., Ltd., Cao Yanfang Labor Dispute Civil Application for Retrial Review Civil Ruling Henan High Court Civil Ruling (2021) Yu Min Shen No.8769.]
The second type is where both parties are willing to continue the employment relationship after the expiration of a fixed-term contract. The employer’s obligation here to arrange for the signing of the employment contract is the same as that for the new employee, and the employment contract should be signed within one month after the expiration of the previous fixed-term contract. Therefore, the period during which the employer may be liable for compensating double-wage damages includes the period from one month to one year after the last contract period. However, it should be noted that if both parties are willing to maintain employment relationships after signing two consecutive fixed-term employment contracts, the third contract should be signed from the expiration date of the second contract or one month after the expiration date. At present, courts in different places have completely different practices in this regard.1Beijing Wushengchang Automobile Sales Service Co., Ltd. and Gong Jinpeng Labor Dispute Second Instance Civil Judgment Beijing Third Intermediate People’s Court Civil Judgment (2022) Beijing 03 Min Zhong No.6983. ¡°The employer should have anticipated the legal consequences of the expiration of the original employment contract and the continuation of employment, so there is no need to grant another month’s grace period. That is to say, the employer should have concluded the employment contract at the date of previous contract expired and must bear the legal consequences of not signing the employment contract from the date.¡± Ma Hong and the People’s Government of Dingyan Town, Rugao City, appeal for labor disputes and apply for civil ruling No.2945 of Jiangsu Provincial People¡¯s High Court (2018). ¡°If the employer violates the provisions of laws and administrative regulations and does not conclude a permanent employment contract with the employee, the starting time for the employer to pay double-wage damages to the worker is from the next day of one month from the date of expiration of the employment contract to the day before the supplementary permanent employment contract is signed, and the longest period is not more than 11 months.¡±
The third type is where the employer should sign a permanent employment contract, including with employees who have been working for the employer for ten consecutive years and request the employer to sign permanent employment contracts, and with employees who have performed two consecutive fixed-term contracts and request the employer to sign permanent employment contracts, but the employer has not done so. The obligation of the employer to sign a permanent contract shall be from the date of the employee’s proposal or the expiration date of the fixed-term contract.
The second factor is the restriction of the Employment Contract Law on the rule that “after one year without signing an employment contract, it will automatically become a permanent contract”. The interpretation of this provision by courts across the county is that the employer’s failure to sign an employment contract for one year automatically produces the consequences of a permanent contract, excluding the obligation of double-wage damages. Therefore, regardless of the aforementioned type, the maximum period for which the employer is liable for double-wage damages is 11 months (for example, one year from the first month of employment in the case of new employees) or 12 months (for example, some courts hold that the starting point for the employer to sign a permanent contract is the expiration of the previous contract, not one month after the expiration).
The third factor is the limitation of employment arbitration. If it is too late for an employee to apply for employment arbitration to claim double-wage damages after the employment contract has not been signed, it is likely that the right to the damages will be partially or completely lost because of the one-year limitation of arbitration stipulated in the employment arbitration law. That is to say, even if the employer should compensate for double-wage damages for a period according to the aforementioned rules, if the employee applies for arbitration too late, they may lose the chance to get compensation. How does the limitation of arbitration affect the loss of the right to double-wage damages? Please see Is it too late for me to claim the double-wage damages?
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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.
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- 1Beijing Wushengchang Automobile Sales Service Co., Ltd. and Gong Jinpeng Labor Dispute Second Instance Civil Judgment Beijing Third Intermediate People’s Court Civil Judgment (2022) Beijing 03 Min Zhong No.6983. ¡°The employer should have anticipated the legal consequences of the expiration of the original employment contract and the continuation of employment, so there is no need to grant another month’s grace period. That is to say, the employer should have concluded the employment contract at the date of previous contract expired and must bear the legal consequences of not signing the employment contract from the date.¡± Ma Hong and the People’s Government of Dingyan Town, Rugao City, appeal for labor disputes and apply for civil ruling No.2945 of Jiangsu Provincial People¡¯s High Court (2018). ¡°If the employer violates the provisions of laws and administrative regulations and does not conclude a permanent employment contract with the employee, the starting time for the employer to pay double-wage damages to the worker is from the next day of one month from the date of expiration of the employment contract to the day before the supplementary permanent employment contract is signed, and the longest period is not more than 11 months.¡±