Guangdong Provincial Higher People’s Court recently published five typical cases dealing with safeguarding the lawful rights and interests of women. These included an employment dispute involving remuneration paid to a female employee while pregnant that deserves the particular attention of employers.
Case overview
In July 2022, a female employee was recruited to serve as the reservation centre supervisor of a hotel. The parties specified that her employment contract would run from 12 July 2022 to 11 July 2024. In December 2022, the employee became pregnant.
In May 2023, the hotel unilaterally informed the employee that she was being transferred from the position of supervisor to front-desk receptionist, on reduced wage. Deductions from her wage would also be made for the times when she had her regular prenatal checkups.
Subsequently, the employee claimed the wage difference from the hotel and the case was brought to court after labour arbitration.
The judgment
In the case, the court found that the proposal by the hotel to transfer the employee to a different position – on the grounds that she was no longer suited to work in her existing position – needed to be resolved through consultation between the parties.
In the absence of sufficient evidence provided by the hotel to show the employee was no longer suited to her supervisor role, the transfer did not comply with relevant provisions of the law.
Accordingly, it ruled that the hotel was required to continue paying the employee at the existing remuneration rate provided for in her contract. The court further ruled that the hotel pay the employee back wages for the leave she took for her prenatal checkups.
Key points
China’s Law on Safeguarding the Rights and Interests of Women and other such regulations expressly provide that an employer may not reduce a female employee’s wages and benefits, dismiss her, or unilaterally terminate her employment (engagement) contract or service agreement for such reasons as marriage, pregnancy, maternity leave and nursing.
On breaching the regulation, the employer will not only be required to pay the amount deducted from the employee’s wages, but there is also a potential risk that the employee will claim the employer failed to pay her remuneration in full, as provided in her employment contract, and claim economic compensation.
When an employer needs to transfer an employee to a different position, it is advisable to do so after reaching a consensus with the employee through consultations.
If an employer needs to unilaterally transfer an employee to a different position for a genuine production or operational need, it should do so based on the principles of lawfulness and reasonableness.
However, the criteria for determining “reasonableness” in adjudication varies to a certain degree in different regions, so it is recommended that an employer responds based on the circumstances of the specific case, and in light of the local judicial approach.
For example, certain courts hold that an employer’s transfer of a worker to a different position is required to satisfy the following conditions: whether the employer’s transfer of the worker is based on the employer’s production and operational needs; whether the worker’s wage level before and after the transfer is basically equivalent; whether the transfer is humiliating, discriminatory or punitive; and whether the transfer complies with laws, regulations and the employment contract between the parties.
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 Howard Wu (Shanghai) at howard.wu@bakermckenzie.com
