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Mar. 10 – A court in Beijing has awarded an employee of a foreign-invested advertising company RMB400,000 for wrongful dismissal after the employee was fired when she established a trade union using the company’s chop without permission, China National Radio reported on Tuesday.
The former human resources manager at R&D Advertising in Beijing, identified as Ms. Cui, sued the company last year, alleging that the company had fired her because of her union role.
The Xicheng District People’s Court upheld her claim for wrongful dismissal, ruling that is was her right to establish a trade union.
The China Federation of Trade Unions has been increasingly aggressive in pushing for unions to be established within foreign businesses and have targeted all Fortune 500 companies operating in China to do so. Companies in China are generally reluctant to endorse unionization of their workforce as it adds a 2 percent surcharge to the workforce labor bill in mandatory payment of union fees.
The ruling in Beijing appears to suggest that support for the establishment of labor unions in foreign companies overrules the use of illegally using chops and signing off documentation while misrepresenting yourself as an employee. Businesses in China are recommended to keep company chops and seals in a locked secure environment.
This case highlights the difficulties of litigation in China, and the impact of political issues in determining judgement. The prosecution were clever to link the dismissal to the right to set up a trade union, in doing so they reckoned that politicizing the case they would have a chance of overcoming the employees obviously fraudulent use of the company seal. The court agreed with that line. The right of a worker to set up a union, regardless of how she went about it proved far stronger an argument in her claim against the company than their counterclaim that she had been fired for fraudulently misrepresenting herself. That is a prime example of political matters and rights of workers being placed above the actual honesty of the employee. The use of a political angle in litigation in China should always be considered by both sets of lawyers involved in such hearings.
Chris D.E.,
I’m not a lawyer, so to make sure I got it right: you are basically saying that China has no rule of law, and that foreign entities operating or wanting to invest in China should consider the “hidden” costs to the bottom line. Another impression I get is that foreign entities in China would almost always lose if sued by an employee, as they are on the “wrong” side of the political spectrum.
My question: is this only true to foreign entities in China or does it apply to local entities as well?
Thank you.
So the ends continue to justify the means in China! Scary.
@Daniel; No I’m not saying that China has no rule of law, because it definately does. Its how that rule can be applied, and the political nuances within it that can make some rulings appear odd. In rulings that have a political aspect, the court will always veer towards the upholding of the political beneficiary of China’s Constitution and that of the Communist Party. Curiously, within the Constitution, there are some anomolies there, but legal predence upholds the Communist parties view.
The use of a political angle to win cases is an interesting ploy, and it seems to work.
Chris,
Thank you for the reply, naturally it flew right over my head so allow me to simplify this.
To my understanding there are laws (assuming) that state a person may not steal company chop, a person in fact should not steal anything, should not murder other people, should abide the authorities etc.
In my eyes these are rules, the law.
Vague “political direction” is not a law, it’s a … vague political direction.
In the example which you wrote above it’s clear that the court ignored the law and instead followed their interpretation of the current political agenda. Isn’t this called a “precedent”? Tomorrow someone else will steal a company chop and use it for a political reason. Then what?
Of course if in the “book of laws” it says that the law is a vague political notion that may change according to the weather at the time, than it’s not a law, even if it’s named a law.
My 0.02 cents.
Hi Daniel, the courts overriding concern, and an argument provided by the prosecution, was that she was dismissed because she wanted to set up a union. Without having been privy to the case, its difficult to assess how both sides were presented. However its apparent the court believed the overriding issue was the denial of her rights to establish a union. Whether they took into account her behavior over falsifying documents in the amount of damages awarded I can’t say. However in making such an award, the court has left the verdict open to interpretation that the illegitimate use of company seals seems “ok”. Which to be fair was probably not their intention. – Thanks Chris
This is my experience with my company seal.
My manager managed to obtain a blank paper with our company seal and used it to guarantee his loan to black money market lender.
The guarantee papers was shonky, there was not loan agreement accompanied with the guarantee, no proof of money ever changed hand, no third party witness to the guarantee and the loan. The lender and my manager are a long time friends.
Despite our witnesses that the manager got the blank paper with company seal without our approval almsot like straling, we lost our case at lower court and imtermediate court.
China has Laws but it appears that the judges could be lazy to find the truth of the matters, and placed the judgement in favour of the lender.
The manager has been no longer contactable by the police.
Hence China Laws on company seal is that the company is responsible for the use of its seal even though there is possibility that there is criminal element in using the seal.