Court fines employer for dismissing worker without notifying trade union

A court in Chengdu has taken the highly unusual step of sanctioning a company for dismissing an employee without informing the trade union, as required by law, the Chengdu Commercial Daily (成都商报) reported on 9 October.

The Jinjiang District People’s Court ordered a Chengdu electrical appliance company to pay the employee, a Ms Gao, 19,600 yuan in “double compensation” (双倍赔偿金) – that is twice the amount of economic compensation the employee would normally be entitled to if dismissed in accordance with the Labour Contract Law.

Article 43 of the Labour Contract Law states: “Any employer that discharges a labour contract unilaterally shall notify the labour union with relevant explanations...” Ms Gao’s lawyer asserted that the company had violated article 43. The court agreed and, in accordance with article 87 of the law, doubled the economic compensation to be paid to the employee for termination of employment.

Ms Gao was dismissed in February this year after her employer alleged she had been employed at an insurance company in Chengdu whilst still employed at the electrical appliance company. Ms Gao filed a complaint with the Jinjiang District Labour Dispute Arbitration Committee seeking wages in arrears and compensation for illegal dismissal. The case was then referred to the district court.

The case is significant not only because it may well be the first time this particular provision has been invoked in an illegal dismissal case, but also because it clearly highlights the duties and obligations of the trade union in the event of an employee termination. Article 43 goes on to state that:

In case the employer is in violation of any law, administrative regulation or stipulations of the labour contract, the labour union is entitled to require the employer to make a correction. The employer shall take the opinions of the labour union into account and notify the labour union concerning the relevant results in written form.

Currently, most enterprise trade unions are under the thumb of management and unwilling to challenge an unfair or illegal dismissal. However, the Jinjiang court’s decision shows that unions are legally empowered to protect their members, and should be more proactive in challenging employers’ violations of the labour laws.
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