Case interpretation by Judge Xiao Daming, Judge of Second Civil Division of Beijing Second Intermediate Court, translated by Sun Jin (Marlow), China attorney at law


Case Summary:

May of 2005, JUHE company employed a German Conte through a job center. According to signed contract, Conte is employed by JUHE as assistant of general manager with the salary of 5000 rmb/ month, the contract period is from June 1st, 2005 to May 30th, 2008 and Conte shall observe the labor discipline of JUHE during the employment. In Feb of 2006, Conte smoked in non-smoking meeting room in working time and didn¡¯t extinguish when general manager warned. It violated the labor discipline of company. On Mar. 2nd, 2006, JUHE made the decision of expelling Conte, and the salary paid till January of 2006. On Apr. 1st, 2006, Conte appealed to labor dispute arbitration commissions, claiming for salary of February and the economic compensations of 10000rmb. The arbitration commissions confirmed the expelling which Conte violated labor discipline of JUHE, judged JUHE to pay the salary of February 5000rmb for Conte, and rejected the other claims. Conte disagreed to the arbitral award and brought the case to the people¡¯s court. JUHE employed the foreigner without Employment permit, and didn¡¯t apply the Foreigner's Work Permit with Conte subsequently. The court determined the labor contract between Conte and JUHE was invalid. JUHE shall pay the remuneration when Conte provided work. So the judgement is to order JUHE pay Conte for the salary of February, and reject the claim of economic compensation.

According to relevant regulation, Chinese corporate hiring a foreigner shall be subject to the employment permit system. Chinese corporate shall apply for Employment Permit, and the foreign employee shall apply for the work permit. In this case, JUHE didn¡¯t apply for the employment permit and Conte didn¡¯t apply for the work permit, neither. Until the dispute arised, both parties didn¡¯t complete the formalities, so the court determined the labor contract is invalid.
Because the labor contract is invalid, Conte¡¯s claim for remuneration was not supported. But Conte provided work for JUHE in fact, JUHR shall pay for it. If the labor contract is valid, the economic compensation shall be paid according to the number of years of employee has worked for the employer by the rate of one month¡¯s salary for each full year employee worked. But if the employee violates labor discipline, the employer may expel the employee without economic compensation.

What need to explain is, labor dispute in China shall be subject to the arbitration preposition system. That means, the labor dispute shall apply to labor dispute arbitration commissions firstly. The party that has objections to the ruling of the labor arbitration committee can bring the case to a people¡¯s court within the legal period of time. In this case, the ruling and the judgement on the validation of contract is different, the court¡¯s judgement shall prevail.




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