Illegal Use of Company Chops Seemingly Endorsed in Beijing Court Ruling

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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.