Guangdong court gives guidance on labour disputes

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The Guangdong Province High People’s Court on 19 July 2017 issued a Reply to Controversial Issues Concerning Ruling on Labour Dispute Cases to guide lower courts when ruling on labour disputes. The high court’s reply should significantly influence how local judges handle labour disputes in Guangdong province.

Key highlights from the guidance include:

  • Relocation. Relocation due to the business development or planning is a major change in the objective circumstances upon which an employment contract was originally agreed. Thus, an employee may terminate the employment contract and demand compensation if the employee does not agree to the workplace relocation unless the relocation does not excessively inconvenience the employee, and the employer takes reasonable steps to eliminate the inconvenience (for example, providing a shuttle bus for the employee);
  • Liquidated damages. An employee can request both liquidated damages and severance pay if the employer breaches the contract or wrongfully terminates the employee. The employee can claim liquidated damages according to the employment contract (if the contract has such a liquidated damages clause) and can additionally claim severance compensation according to the Labour Contract Law;
  • Termination. An employer can terminate an employee who violates family planning regulations if such termination cause is stipulated in the labour contract, the collective contract or company policy;
  • Personal injury compensation. An employee suffering a work safety accident or an occupational disease can claim personal injury compensation from the employer if such amount is not covered by the work injury insurance system.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by e-mailing Danian Zhang (Shanghai) at: danian.zhang@bakermckenzie.com