Lose Weight Crazily VS Keep Fit Reasonably

“Shadow” (“S”) is a mid-sized company, in the past few years, with the improvement of R&D, the added value of S’s products has been increasing and S has made a sizeable profit. However, the KPI system exists in name only, the employees just complete the same tasks as the past, but they can obtain a salary increase at around 5% to 15% year by year, which becomes a convention.

In the recent 2 years, the Euro crisis causes the shrinkage of foreign clients’ demand, the R&D cycle trough and failure to develop new products, the effect of RMB appreciation has brought discount to S’s offshore profit, all these elements have pushed S into a hard time. Regarding of these, the board of S made a resolution that 20% of the employees should be laid off, the remained employees should take a 15% salary cut.
When the employees got the news, those employees to be laid off went on strike, and held a demonstration in front of S’s gate. In order to put pressure on S, the remained employees also joined the strike. What’s worse, an employee even held a barrel of gasoline and threatened to burn himself if he lost the job. The situation became uncontrollable.

S calls the attorney for help. Attorney analyzes S’s business, and confirms that the situation of S is a statutory layoff. Attorney explains the situation to the employees and the authorities in charge of labor issues, drafts the settlement plan, communicates with the employees, and finally solves the bad results brought by S’s action of losing weight crazily.

Meanwhile, in accordance with the suggestions of attorney, S amends the relevant systems to keep it fit: a) design a reasonable and legally KPI system and payroll system, which can help S to achieve a reasonable and legally “survival of the fittest” goal; b) terminate the labor contract in accordance with the requirements and procedures stipulated by the relevant laws and regulations.