Recently I handled a case in which a foreign invested company in China decided to dismiss several employees who are suspected of bribery. The corporate HR manager came to our lawyers’ office to consult about the pre-plan and possible risk therein. Actually, most of corporations may encounter such problems. Here below, I’d like to share some of my suggestions regarding such cases:
First of all, bear in mind that it’s a company’s obligation to prove that the employee should should have been dismissed according to the labor law of China. In case that a company who dismisses a employee fails to raise enough proofs to substantiate his/her dismissal, then the company, rather than the employee, shall take the risks of being lost because of failure to do so.
The circumstances in which a company could possibly justify its dismissal are stipulated in the clause 2 and 6 of article 39 under the law of labor contract of China. Article 39 of Labor Contract Law says: the employer may have the labor contract cancelled if a worker is found in any of the following circumstances: (2) seriously violating the rules and regulations of the employing unit; (6) being investigated for criminal responsibility in accordance with law.
To substantiate the legitimacy of dismissal, a company could take different measures by in consideration of a particular bribery. In a case that an employee dishonestly accepts a comparatively bigger amount of money, the police may be involve to start a criminal investigation. In this situation, the company may wait for the conclusion of the police’s investigation. Subsequently, the company may send a notice of dismissal in case that is a bribery based on the conclusion.
However, there are many bribery cases into which no police is involved to investigate, partly because the amount don’t reach the standards of a criminal registration or any other reason. In such circumstance it is hard for the company to present enough proofs justify the dismissal. According to a search to the existing court or arbitration decisions , we found that most of the dismissals were adjudicated to be illegal and/or overthrown by the court/arbitration decision, and only a few of the dismissals are maintained.
Therefore, the companis in China should be very careful to take measures of cancellation of a labor contract. To substantiate the lawfulness to dismiss an employee pursuant to clause 2 of article 39 of labor contract law: it’s not enough for an employer to make a corporate regulation to declaim the circumstances in which an employee should be dismissed, but also such regulation should be acknowledged by employees in , and furthermore but also enough evidence should be gathered to convict the bribery.