32.What are the exceptions to employers¡¯ obligation for double-wage damages?

Answer: Employers who ought to have signed written employment contracts with their employees but did not are liable to pay the employees double-wage damages theoretically. However, the employer’s liability for compensation is restricted by the limitation of arbitration in practice (please refer to Is it too late for me to claim the double-wage damages?). There are also certain exceptions to the employer’s liability.

The first type of exception is where the employer is not at fault for not signing the contract or where the employee is at fault. There is a tendency in practical cases that if the employee can not prove that the employer is responsible for not signing the employment contract, the employer does not have to bear the liability of double-wage damages. For example, the employee’s maternity leave results in the failure to sign the contract,¹the employee is on leave without pay, early retired, on long-term unpaid leave, or the employer is in the preparatory or incorporation stage or does not have the legal subject qualification, or there is lockdown of the city during an epidemic where the employer has no fault in not signing the contract. ² If a full-time employee establishes a factual employment relationship with a second employer and has no written employment contract in place, the court does not uphold the claim of double-wage damages in this case because of the restrictive attitude of the law towards dual employment relationships.³

The second type of exception is the backdating of the employment contract between the two parties. If an employer fails to sign an employment contract in accordance with the law after the employee’s entry (or after the expiration of the previous employment contract), in order to avoid the liability of double-wage damages, it signs an employment contract with the employee’s entry date as the starting date but marking the current signature date, or backdates the signing date as a date within one month after the employment contract commencement date (commonly known as backdated employment contract). At present, the courts in Guangdong Province, Hubei Province, Huaian City of Jiangsu Province, Beijing City, Jinan City of Shandong Province and other places have recognized that this kind of backdating behavior constitutes the exemption from the liability of double-wage damages,⁴but there are also some courts across the county holding that remedial measures can not exempt the responsibility. The implementation areas include Weihai in Shandong, Shenyang in Liaoning, Fuzhou in Fujian, and Huaihua in Hunan.⁵

The third exception is where a labor dispatch is found invalid. Because of the existence of the employment contract between the dispatched worker and the dispatch employer, the host employer may not be considered to have not sign a written employment contract and may be exempted from double-wage damages. At present, cases from Jiangsu, Beijing and Jilin Changchun courts hold that although the labor dispatch contract is invalid, after all, the dispatch employment contract already exists, thus the liability of double-wage damages can not be upheld.⁶However, there are also cases where courts held that employers¡¯ malicious evasion of their obligations shall, even if there is an dispatch employment contract (which is invalid), lead to double-wage damages.⁷As for the nature of the contract term of the factual employment relationship between the host employer and the employee after the labor dispatch is invalid, the law does not stipulate it, and the judicial decisions seldom involve it.⁸

The fourth exception is whether the employment contract should be regarded as not signed if the two parties continue to perform the employment relationship for over one month after the expiration of the pervious fixed-term contract. This problem appears to be a blind spot in law and practice. Courts such as the Guangdong Provincial High Court and the Shenzhen Intermediate Court have cited the judicial interpretation of the Supreme Court that this is deemed to be a signed employment contract and refused to upheld the claim of double-wage damages.⁹However, there are also a large number of court decisions to the contrary. ¹⁰ It should be noted here that there are completely opposite decisions in Guangdong Provincial High Court and Shenzhen Intermediate Court.

The double-wage damages is a new type of employment law damages created in the Employment Contract Law. However, as with other employment rules, legislators left more loopholes related to the damages in practice for courts or employment entities to explore and test.

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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

1
Deng Mou and Gansu Lanyang Science and Technology Co., Ltd. Labor Dispute Civil Judgment of First Instance Civil Judgment of the People’s Court of Xifeng District, Qingyang City, Gansu Province (2021) Gan 1002 Min Chu No.1831. In the case, the recruitment resume signed by both parties contains the main conditions of the employment contract and both parties agreed to sign a formal contract after the expiration of the three-month probation period. The court held that ¡°before the expiration of the three-month probation period, the plaintiff asked for maternity leave, and the two parties did not sign a written employment contract after the expiration of the probation period, so the Court could not determine who was at fault for not signing a written employment contract.¡±
2
The Beijing Municipal Bureau of Human Resources and Social Security released the fourth of the ten typical cases of labor dispute arbitration involving the novel coronavirus pneumonia epidemic in Beijing: the case of a dispute between Chen and an education consulting company over the recovery of labor remuneration-without a contract, the employer can be exempted from paying double-wage damages with prior notice.
3
Zhong Jianwei, Liaoning Jiaheng Real Estate Market Media Co., Ltd. Civil Application for Retrial Review of Labor Disputes Civil Ruling Liaoning Provincial People¡¯s High Court Civil Ruling (2021) Liao Minshen No.2634. The employee established a factual employment relationship with a second employer and did not sign an employment contract, the court found that although the second employer did not sign an employment contract, employment law does not encourage dual employment relationships, so it does not support the employee’s request for double-wage damages.
4
Zhu Fengnan, Foshan Nanhai Yanbu Baocheng Property Management Co., Ltd. Civil Ruling on Labor Dispute Retrial Review and Trial Supervision, Guangdong Provincial People¡¯s High Court Civil Ruling (2019) Guangdong Minshen 12918 No; Application for Labor Dispute between Wan Yali and Chunmiao School of Jianghan District, Wuhan City Civil Ruling of Hubei Provincial People¡¯s High Court (2014) E Min Shen Zi No.00023; Civil Judgment of Second Instance of Labor Dispute between Xie Yaoying and Lianshui Jiadebao Wood Products Co., Ltd. Civil Judgment of Intermediate People’s Court of Huaian City, Jiangsu Province (2023) Su 08 Min Zhong No.91; Civil Judgment of the Second Instance of Xu Tingfang et al. Labor Dispute Civil Judgment of the Second Intermediate People’s Court of Beijing (2022) Jing 02 Min Zhong 12913 No.
5
Rushan City Subdistrict Office Jingwei Kindergarten, Wang Xinghua Labor Dispute Civil Judgment Civil Judgment of Weihai Intermediate People’s Court of Shandong Province (2023) Lu 10 Min Zai No.5, Gao Hongbo, Jinan Huangtai Gas Stove Co., Ltd. Labor Dispute Civil Judgment of Second Instance Civil Judgment of Jinan Intermediate People’s Court of Shandong Province (2022) Lu 01 Min Zhong No.6595, Hao Guidong v. Liaoning Qiangdun Fire Door Co., Ltd. Labor Dispute Civil Judgment of Yuhong District People’s Court of Shenyang City (2016) Liao 0114 Min Chu No.1281, Li Jin, Fujian Tianniushan Real Estate Development Co., Ltd. Labor Dispute Second Instance Civil Judgment Fujian Fuzhou Intermediate People’s Court Civil Judgment (2016) Min 01 Min Zhong No.4499 (This case seems to imply that the employer still has to bear the liability of double-wage damages for backdating employment contracts). Hunan Huaicheng Property Management Co., Ltd. and Li Li Labor Dispute Appeal Hunan Huaihua Intermediate People’s Court Civil Judgment (2017) Xiang 12 Min Zhong No.64
6
Civil Judgment of Second Instance of Labor Dispute between Zhang Hai and Changzhou Public Transport Group Co., Ltd. Civil Judgment of Changzhou Intermediate People’s Court of Jiangsu Province (2020) Su 04 Min Zhong No.3389, Tang Geyin and Changchun University, Jilin Jingyi Property Service Co., Ltd. Civil Judgment of the Second Instance of Labor Dispute of Changchun Zezhong Property Service Co., Ltd. Civil Judgment of Changchun Intermediate People’s Court of Jilin Province (2018) Ji 01 Min Zhong No.1423, Labor Dispute Appeal Case between Liu Xinjun and Beijing Construction Engineering Group Co., Ltd. Civil Judgment of Beijing No.2 Intermediate People’s Court (2014) Er Zhong Min Zhong Zi No.11879.
7
Civil Judgment of the Second Instance of Labor Dispute between Luo Yuling and Xiaogan Branch of China Mobile Tietong Co., Ltd. Civil Judgment of the Intermediate People’s Court of Xiaogan City, Hubei Province (2019) E 09 Min Zhong No.798. In this case, the employer maliciously evaded the obligation of the employer by dispatching several companies, and the court ruled that the employer should bear the obligation of double-wage damages in the absence of a written employment contract with the employee.
8
There seems to be a case that after the invalidity of labor dispatch, the term of the employment contract between the newly dispatched employee and the host employer should refer to the fixed term of the labor dispatch contract.
9
Employment contract Dispute between Shenzhen Zhongzhou Investment Holding Co., Ltd. and Huang Yujin Civil Judgment of Shenzhen Intermediate People’s Court of Guangdong Province (2016) No.03 11048 of Guangdong Province Zhang Changhui v. Zhaoqing Jinfu Toys Co., Ltd. Labor Dispute Case Civil Ruling of Guangdong Provincial People¡¯s High Court (2014) Yue Gao Fa Min Shen Zi No.2155, Li yuanyu, Shanwei Huineng Electric Power Property Co., Ltd. and Labor and Social Security Administrative Review and Trial Supervision Case Civil Ruling of Guangdong Provincial People¡¯s High Court (2015) Yue Gao Fa Min Shen Zi No.2501, Xu Junhong. ¡°Article 16, paragraph 1, of the 2001 Interpretation of the Supreme People’s Court on Several Questions Concerning the Application of Law in the Trial of Labor Dispute Cases, stipulates that “after the expiration of the employment contract, the employment contract shall be terminated.” If the employee is still working for the former employer and the former employer has no objection, it shall be deemed that both parties agree to continue to perform the employment contract under the original conditions. If one party proposes to terminate the employment relationship, the people’s court shall support it. According to the judicial interpretation of this article, after the expiration of the employment contract, if the employee still works in the former employer and the former employer does not express any objection, it shall be deemed that both parties agree to renew the employment contract on the original terms. In this case, the rights and obligations of both parties are bound by the original employment contract, there is no uncertain state of rights and obligations, and the purpose of concluding a written employment contract has been achieved.¡± Hu Biqin, Kaili Friendship Gynecological Hospital Labor Dispute Retrial Review and Trial Supervision Civil Ruling Guizhou Provincial People¡¯s High Court Civil Ruling (2020) Qian Min Shen No.3662. Wang Yongjie and Banu Maodu Hotpot Co., Ltd. Civil Ruling on Civil Application for Retrial of Labor Dispute Civil Ruling of Henan High Court (2021) Yu Min Shen No.2737. Zheng Yan and Henan Aixingke Trading Co., Ltd. Civil Ruling on Civil Application for Retrial of Labor Dispute Civil Ruling of Henan High Court (2021) Yu Min Shen No.523.
10
Shenzhen Chuanchuan Science and Technology Development Co., Ltd. and Hu Xuezhang’s Appeal for Labor Remuneration and Economic Compensation Dispute Civil Judgment of Shenzhen Intermediate People’s Court of Guangdong Province (2017) Guangdong 03 Minzhong 15288 No. Chen Yuhe v. Zhanjiang Mingjing Property Service Co., Ltd. Labor Dispute Civil Ruling of Guangdong Provincial People¡¯s High Court (2015) Yue Gao Fa Min Shen Zi No.1661, Civil Judgment of Labor Dispute Retrial of Liu Mingshan and Harbin Shanmu Labor Dispatch Co., Ltd. Civil Judgment of Heilongjiang Provincial People¡¯s High Court (2020) Hei Min Zai No.291. Chongqing Kaidi Automobile Sales Service Co., Ltd. and Tan Zhen Labor Dispute Appeal and Civil Ruling of Application for Retrial Civil Ruling of Chongqing High Court (2020) Yu Min Shen No.2740. Xu Junhong and Wuhan Kaibis Electric Power Equipment Co., Ltd. Civil Judgment on Civil Retrial of Labor Remuneration Dispute Hubei High Court Civil Judgment (2020) E Min Zai No.156.

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32.What are the exceptions to employers¡¯ obligation for double-wage damages?

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