Should a supervisor be liable for subordinate’s faults?

After C was dismissed by the company for false reimbursement, C’s supervisor H was also dismissed on the grounds that H neglected to perform his management duties, which brought damages to the interests of the company. H felt wronged, because he was cheated by C, all the faults were made by C, so it is unfair for the company to punish him.

This case has similarities, but differences, to the case in the previous Legal Notebook, which mentioned an accounting executive was fired due to other colleague’s false reimbursement. In the previous issue, the accounting executive is fired on the grounds that he failed to fulfill his duty of auditing vouchers. However, in the case in the beginning, H may also take the same opinion that the company shall blame the accounting executive instead of C’s supervisor, or as the supervisor, H may has a certain liability, which shall not be a severe one.

Therefore, in addition to the identification on the “significant damage” stipulated in Article 39, paragraph 3 of the “Labor Contract Law” as mentioned in the previous issue, the case in the beginning reminds enterprises to pay attention to the identification on the “serious dereliction of duty” under the circumstance that a subordinate has constituted a severe violation behavior, whether the supervisor shall be liable from the perspective of supervision and management. According to Article 39, only when both the “significant damage” and the “serious dereliction of duty” have been achieved, the employer could consider to dismiss the supervisor. In practice, enterprises need to pay attention to the following issues.

First, in view of massive judgments, the courts focus on two elements, which are the supervisor’s corresponding management responsibilities and the legality of relevant internal regulations. Regarding the former, the corresponding management responsibilities shall be clearly stipulated in internal regulations, which may include a job description, approval authority, management process, operating guidelines for specific businesses, employee handbooks and so on. Regarding the latter, enterprises should pay attention to the procedures of those regulations. It is well known that those regulations which applied to all employees shall go through democratic consultation and publicity procedures. Enterprises may ignore the procedures of those regulations which may applied to a certain department or position, such as a job description, approval authority, management process, operating guidelines for specific businesses and etc., although there is room for negotiation on whether such regulations require democratic consultation, the publicity procedures are obviously essential. Therefore, many enterprises failed in relevant labor disputes cases due to the lack of publicity procedures. Many employees would defend with the excuse that they did not know the existence of those regulations, and if the employer failed to prove the publicity procedures, then it would fail in the case.

Second, “The party who asserts shall present evidence” is the basic principle of the burden of proof in civil litigation, so enterprises shall present evidence to prove the supervisor’s “serious dereliction of duty”. For example, in the case (2016) Su 01 Min Zhong Zi No. 1278, the court held that, “although the company found that Jin’s email involved a subordinate’s report that the subordinate planned to require doctors to use products and increase sales through meeting requests, visiting doctors, paying lecture fees and etc., however, if the aforementioned alleged violation of the “Standards of Conduct and Ethics” has not been verified, it is illegal for the company to directly terminate the labor contract.” It can be seen that when the supervisor is to be punished, the enterprise shall present a complete evidence chain, which includes the subordinate’s actual fault.

Third, when there are multiple supervisors, it is also very important to choose the object who shall be punished and the corresponding punishments. When employees make serious mistakes, the big boss is often pissed off, and such angry emotion would drive the boss to be angry with a certain supervisor. In the case (2019) Min 0203 Min Chu No. 12581, the court held that, “it is not reasonable for the enterprise to dismiss the middle-level manager L’s labor contract only, and applied a less lightly punishment or none punishment to the subordinate’s direct supervisor, the supervisor with corresponding management responsibilities, and the supervisor with greater management responsibilities. Therefore, enterprises should arrange the punishments reasonably and rationally upon a comprehensive analysis regarding various elements of individual cases.