How to Write a Notice on the Dissolution of a Labor Contract

Company A’s “Sales Regulations” specifies that, where the price of any transaction is lower than the normal price level, such transaction shall be approved by the accounting dept. in advance, otherwise, the responsible person shall be recorded for a serious mistake. Sales manager Qian sold products to his friend’s company at a lower price, which brought the loss of 0.17 million to Company A. Company A issued a “Notice on the Dissolution of a Labor Contract” to Qian, in which it dissolved the labor contract with Qian for the reason that he had seriously violated Company A’s internal rules and regulations. Qian filed a labor arbitration. The labor arbitration committee decided that Company A had dissolved the labor contract illegally, because Company A should record this serious mistake for Qian instead of dissolve the labor contract, according to the “Sales Regulations”.

The “Labor Contract Law” came into force in 2008, and it is more and more difficult for the employer to dissolve a labor contract. In order to reduce or avoid legal risks on the illegal dissolution, more and more companies have drafted detailed internal rules and regulations. However, if those internal rules and regulations could not be applied properly, such risks might not be reduced or avoided. As the case in the beginning, because the “Sales Regulations” specified that Qian’s action should be recorded for a serious mistake, it is not proper for Company A to dissolve the labor contract by applying this article. In fact, under such circumstance, Company A could considerate of paragraph 3 of Article 39 of the “Labor Contract Law”, which says the employee causes any severe damage to the employer because he seriously neglects his duties or seeks private benefits. In view of this, employers shall pay special attention to the content of such notice.

According to the judicial rules on dealing with such disputes in practice, the following aspects could be taken into consideration while drafting a “Notice on the Dissoution of a Labor Contract”.

Firstly, the legal basis shall be written clearly, such as Article 36 or 39 of the “Labor Contract Law”. In practice, many companies used to use a format, in which there is no legal basis. Later then, the employee would file a labor arbitration against the employer with the reason that the employer had dissolved the labor contract illegally.

Secondly, to introduce the facts briefly and list the relevant articles of the internal rules and regulations comprehensively. In the individual cases, sometimes it would be difficult to decide the specific article which could be applied to the employee’s behavior, or too many articles could be applied. Under such circumstance, if an employer only listed a specific article in the notice, which did not support by the court, then the employer would be decided as dissolve the labor contract illegally. It would be better to introduce the facts in whole and list all the relevant articles, rather than to divide the facts into several individual behaviors, and list the correspondent articles one by one. Because the employer could apply different articles flexibly during the hearing.

Thirdly, to check the internal rules and regulations and adjust the conflict among these documents.

Fourthly, considering the period of the application for a labor arbitration is 1 year, it is recommended to keep the relevant evidence at least 1 year. For example, in the case (2015) Huang Pu Min Yi (Min) Chu Zi No.1456, the court held that the employer had dissolved the labor contract illegally, because it could not prove the employee had violated its internal rules and regulations.