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Pursuant to Articles 38 and 46 of the Labor Contract Law, if an employer fails to pay wage in full and on time, an employee may terminate the labor contract and demand the employer to make up the wage difference and pay economic compensation. In practice, employees may terminate the labor contract and demand economic compensation on the grounds of wage issues, such as, late wage payment, non-payment of overtime pay, salary reduction after job reassignment, and so on. Whether an employer shall pay economic compensation due to such wage issues? Let’s see a case. In 2017, Wang joined a company, and his salary consisted…

To maintain unified product market positioning and stable sales channels, many manufacturers adopt control measures in distributor management, such as setting minimum retail prices and imposing penalties for parallel gray-market shipments. However, such practices carry significant risks of being deemed vertical monopolistic conduct. Since China’s first administrative penalty case involving vertical monopoly agreements in 2013 — in which the National Development and Reform Commission imposed fines of over RMB 200 million each on Moutai and Wuliangye for mandating minimum resale prices on distributors — administrative and civil litigation cases concerning vertical monopolistic conduct have remained frequent. The Anti-Monopoly Law, revised…

Let us review three cases concerning this issue firstly. Company A adopted AI for map data collection and resolved to abolish its Navigation Product Department, which previously handled manual data collection. So Company A negotiated with Lau on amending his employment contract, but Lau refused. Company A unilaterally terminated Lau’s contract. The arbitral tribunal and the courts of both instance all held that the dismissal was unlawful. (See (2024) Jing 01 Min Zhong No. 11896). Company B replaced part of Yu’s job responsibilities with AI, and negotiated cutting his monthly salary from RMB 25,000 to 15,000. Yu refused this proposal.…

The revised Company Law (2023) came into force on July 1, 2024. It imposes restrictions on the capital contribution period, triggering a wave of corporate capital reductions. Meanwhile, due to the backdrop of the economic environment in recent years, numerous enterprises have opted for capital reduction for various reasons. Although the Company Law prescribes relevant procedural requirements for capital reduction, specific rules vary across practical scenarios. We have compiled key matters concerning capital reduction for limited liability companies for reference. Firstly, the procedures for capital reduction differ depending on the reasons for such action. Reasons Legal Basis & Key Procedural…

In American TV dramas, a typical scene is that a protagonist carried a cardboard box and walked out of office after being fired. In China, however, this protagonist may carry the box and walk back to the office. According to Article 48 of the Labor Contract Law, if an employer unlawfully rescinds or terminates an employment contract, the employee has the right to request reinstating the contract. The employer may only settle the matter by paying compensation equivalent to twice the statutory severance pay (2N) if the contract is no longer capable of being performed. But no employer would be…

National standards, industry standards, local standards, enterprise standards and association standards serve as the yardsticks for product quality. National mandatory standards must be strictly followed. Local standards are often categorized into the scope of quasi-mandatory standards based on local regulatory provisions. In cases where enterprise standards are unclear, industry standards may also become an important adjudication basis once quality disputes arise between enterprises over customized product transactions. Therefore, enterprises shall keep track of applicable standards. Once an update is released, they need to verify relevant matters and formulate response measures, which mainly include the following aspects: Does the new standard…

A collective employment contract is a written agreement concluded by an employer and employees through collective negotiation on labor-related matters in accordance with the law. Since a collective employment contract does not require individual consent from each employee but applies to all employees, its conclusion and entry into force are subject to certain restrictions. According to relevant provisions, the procedures for the conclusion and entry into force of a collective employment contract are as follows: (1) Drafting Stage: Representatives of the employer and the employees reach a consensus through negotiation to formulate the draft. (2) Voting Stage: The draft shall…