Employers, please save this: What you need to know about contract termination

[2] Compiled from: Shandong High Court
 
Case review
He Mou joined a company as a sales representative on August 1, 2016, and signed a written labor contract. To facilitate work communication, the company created a WeChat group that all employees were required to join, managed by HR supervisor Wu Mou. On June 5, 2019, He Mou and Wu Mou had a dispute in the WeChat group over differing work opinions. After work that day, Wu Mou removed He Mou from the group. Starting the next day, He Mou stopped going to work. Subsequently, He Mou applied for labor arbitration, claiming the company illegally terminated the labor contract and demanded 8 yuan in compensation, which was rejected by the labor arbitration committee. He Mou disagreed and sued in court.

 

 
[1] Court Opinion
Both courts held that Wu Mou removing He Mou from the company WeChat group due to a work disagreement did not prove the company illegally terminated the labor contract. Given insufficient evidence from both sides on the reason for termination, the courts determined that the labor contract was terminated by mutual agreement. The final judgment ordered the company to pay He Mou 4.2 yuan in economic compensation.
 
 
Relevant legal provisions
Labor Contract Law
Article 36 Termination of Labor Contract by Mutual Agreement
If the employer and the employee reach a consensus through consultation, the labor contract may be terminated.
 
Article 39 Unilateral Termination of Labor Contract by the Employer (Termination for Cause)
The employer may terminate the labor contract if the employee falls under any of the following circumstances: (1) being proven not to meet the recruitment conditions during the probation period; (2) seriously violating the employer's rules and regulations; (3) committing serious dereliction of duty or engaging in malpractice for personal gain, causing significant damage to the employer; (4) simultaneously establishing labor relations with another employer, which seriously affects the completion of tasks for the current employer, or refusing to rectify after being called out by the employer; (5) rendering the labor contract invalid due to the circumstances specified in Article 26, Paragraph 1, Item 1 of this Law; (6) being subject to criminal liability in accordance with the law.
 
Article 48 Legal Consequences of Unlawful Termination or Expiration of Labor Contract
If the employer terminates or expires the labor contract in violation of the provisions of this Law, and the employee demands continued performance of the labor contract, the employer shall continue to perform it; if the employee does not demand continued performance or the labor contract can no longer be performed, the employer shall pay compensation in accordance with the provisions of Article 87 of this Law.

 
[1] The author's perspective
The focus of the dispute in this case is whether the employer's removal of the employee from the work group chat due to a disagreement over work matters constitutes an unlawful termination of the labor contract.
 
[1] The author believes that this behavior does not constitute an illegal termination of the labor contract by the employer.
 
第一 [2] Legal regulation of illegal termination of labor contracts 。[3] The termination of a labor contract refers to a legal act in which, after the contract is concluded but before it is fully performed or partially performed, the parties or one party to the contract prematurely ends the labor relationship through legal actions. Regarding the termination of labor contracts, the Labor Contract Law stipulates six situations, namely Articles 36 to 41. If either party to the labor relationship terminates the contract based on any of these six situations, it is considered legal termination; otherwise, it is illegal termination.
 
[4] The so-called illegal termination of a labor contract, as the name suggests, refers to the termination of a labor contract by the parties without legal basis. Generally speaking, the vast majority of illegal terminations of labor contracts occur on the part of the employer.
 
 
第 [5] II. Determination of illegal termination of labor contracts 。In practice, truly unlawful termination is extremely rare; most cases of unlawful termination arise from differing interpretations of the grounds for termination. For example, if an employer’s internal regulations stipulate that half a day of absenteeism constitutes a serious violation, the employer may terminate the labor contract under Article 39, Item 2 of the Labor Contract Law without paying economic compensation. The employee, however, may consider this penalty excessive and deem it unlawful termination, while the employer often views it as lawful. Disputes of this nature are ultimately resolved by labor arbitration committees or courts.
 
In my view, an employer must have sufficient reasons and legal grounds to terminate a labor contract and cannot do so arbitrarily. Once termination is deemed unlawful, the employer must bear liability in accordance with Article 48 of the Labor Contract Law.
 
第 Third, unlawful termination of a labor contract requires a clear expression of intent. 。Unlawful termination of a labor contract has two elements: "unlawfulness" and "termination." The former refers to the absence of legal grounds for termination, serving as the prerequisite for unlawful termination; the latter refers to the party’s clear expression of intent to terminate, which is the result of unlawful termination. Both elements are interrelated and indispensable. Unlawful termination can only be established when both elements are simultaneously satisfied; otherwise, it cannot be recognized as unlawful termination.
 
In this case, the employer’s HR manager, Wu, removed He from the company’s WeChat group. This action neither proves unlawfulness nor demonstrates the employer’s intent to terminate the labor contract. The court’s decision not to support He’s claim of unlawful termination was therefore appropriate. Since both parties provided sufficient evidence regarding the reason for termination, the court adopted a "compromise" approach, determining that the employer and employee mutually agreed to terminate the contract and ordering the employer to pay economic compensation. This ruling aligns with both legal principles and common sense.