Shanghai court issues employment white paper


The Shanghai Second Intermediate Court on 26 June 2017 issued the White Paper on Employment Dispute Judgments for 2013-2016. In addition to discussing traditional employment dispute matters, such as unlawful termination, wage arrears, and labour dispatch issues, the white paper also calls attention to other emerging trends. For example, it addresses employee dishonesty, electronic evidence, and evidentiary difficulties due to paperless offices and extensive use of social media.


Certain model court decisions were also included in the white paper. In one case, the court ruled that a board resolution to remove a senior manager from the manager’s current position should be deemed as a change in that position rather than an automatic termination of employment. Dismissal based on this board resolution was therefore wrongful termination. Under these circumstances, the employee was entitled to reinstatement, even though the original position had been filled by another employee. The employer was therefore required to arrange a “reasonable position” for the reinstated employee.

In another case, the court held that a mutual termination contract could not become effective until an employee with potential exposure to occupational hazards conducted an exit occupational health examination. The court reasoned that an employee unaware of whether he had suffered an occupational disease or injury could not form the requisite intent to terminate an employment contract.

Therefore, the court ruled that the employee could claim employment reinstatement until the exit occupational health examination and the labour incapacity assessment were completed, and the statutory compensation for any occupational disease could be determined. The court did note, however, that this right to the exit occupational health examination could be waived by the employee voluntarily in the mutual termination contract, if reasonable consideration were paid for the waiver.

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: [email protected]