This article is from the WeChat public account: Economic Observer (eeo-com-cn) , author: Zhuang Yi, GRAPHIC, title figure from: vision China
“If you change your mind, there will be a way to live.” But Netease, who hadn’t had time to change its mind, first put itself on the dangerous road of public opinion. In the middle of the night on November 23, an obituary to Netease’s slogan “Netease layoffs, let the security guards kick me out of the company with terminal illness”. The nightmare I experienced in NetEase myself! ”Violence ripped off the sensitive public topic of layoffs.
Redundancies are never new. Facing the pressure brought by the macroeconomic downturn, optimizing operating efficiency and reducing production scale have become one of the measures for enterprises to adapt to market demands; responding to technological changes brought about by business model changes, and strategic transformation and change have become inevitable choices for many enterprises.
But when it comes to rescission of labor contracts, it is never a trivial matter. No business event is more terrible than layoffs, and companies can lose people, morale, and even the entire organization. So whether it is to optimize operational efficiency, reduce production scale or strategic transformation and change, when layoffs become inevitable, what lessons can we learn from the “Netease layoffs” incident? What is the correct posture for the enterprise and employees to terminate the labor contract?
Pitfalls behind layoffs
Severe violations of discipline and last elimination are common layoffs used by companies.
The first move “serious violation of discipline” is similar to the reason used in the “Netease layoffs” incident. However, the reasons for the termination of such labor contracts require enterprises to collect enough evidence to prove in order to obtain labor arbitration and court support. However, according to the usual statistical big data, 85% of labor arbitration cases were lost by the unit, which is enough to show that it is difficult to prove such reasons.
In 2019, the high-frequency word that appeared in the layoffs of Internet companies was “last elimination.”
On February 15th, Didi CEO Cheng Wei acknowledged that staff reductions caused by business restructuring and substandard performance were reduced, and the overall layoffs accounted for 15% of the total, involving about 2,000 people. JD.com announced in February that it would “finally eliminate” 10% of executives above the level of vice president in 2019. Within a month after the “Executive Optimization” prelude began on March 15th, there were five VP-levels in succession. Executives are either “optimized” to leave or reassigned.
Under the situation of soaring labor costs, it is not difficult to understand the motivation for enterprises to adopt “last elimination”. However, in practice, the last elimination system still lacks legislative basis in China.
In China ’s “Labor Law”, “Labor Contract Law” and other relevant laws, regulations and legislative documents, there is no expression of “last elimination”. 2012 Interpretation of the Supreme Court on Several Issues concerning the Application of Law in the Trial of Labor Disputes (IV) (Draft for Comment) Article 16 states:
During the duration of the labor contract, if the employee does not comply with the provisions of Article 40, Paragraphs 1 and 2 of the Labor Contract Law, the employer unilaterally terminates the labor contract by means of “last elimination” and labor If the employer requests the employer to pay compensation on the ground that the employer has terminated the labor contract illegally, the people’s court shall support it.
This is the first time that China ’s legislation has officially incorporated the “last elimination” into the scope of the law. span class = “text-remarks” label = “Remarks”> (IV) “text, there is no provision for” last elimination “. “Last Elimination” did not end up in the law, and “Last Elimination” was still outside the legal or judicial interpretation.
In fact, judicial practice also denies “last elimination.” On November 30, 2016, the Supreme People’s Court published the “Minutes of the Eighth National Civil and Commercial Trial Work Conference Statutory conditions for economic layoffs
Today, more companies will jump out of their usual thinking and consider how to reduce burdens and costs from other directions. The most typical way is to lay off employees economically.
Employment reduction refers to the situation in which an enterprise needs to terminate a labor contract with multiple workers due to serious difficulties in production and operation, and bankruptcy and reorganization of the enterprise. It is one of the ways in which an employer can exercise the right to terminate a labor contract.
Enterprises need to reorganize in accordance with corporate bankruptcy regulations, have serious difficulties in production and operation, change production, major technological innovations, or adjust business methods. They still need to reduce staff after changing labor contracts. Only when there are major changes in the objective economic situation of the company that the labor contract cannot be performed, can the economic retrenchment process be initiated.
The third scenario, “The company needs to reduce staff after changing labor contracts, major technological innovations, or adjustments to business methods,” is worthy of attention. At present, China’s current laws have no clear stipulations on “transition of enterprises”, “major technological innovation”, and “adjustment of operating methods”.
From the perspective of judicial practice, “enterprise conversion” here should refer to the qualitative change rather than quantitative change in the production and operation of an enterprise, or the production activities to business operations, or the business activities to production activities.
“Major technological innovation” should be understood as: the technology on which the core business of the enterprise depends has been changed or upgraded, and this change has led workers to adapt to and be competent for the working environment under the new technology.
“Adjustment of business methods” should be understood as: substantial changes have taken place in the company’s business model and organizational structure, which has led to the disappearance of the basis for performing labor contracts.
Enterprises must bear evidence to prove that the company has changed production, major technological innovations, and adjustments in operating methods. Otherwise, there will be relatively large legal risks.
When one of the above situations is met, the enterprise needs to negotiate with the laborer to change the labor contract. Pay attention to retaining the evidence of the labor contract negotiation and change;After moving the contract, if there are still workers who are not qualified for the new job or the new work environment is not applicable, then the company can start the layoff process. It can be seen that the company applies this situation for economic layoffs, and has higher requirements for the company in terms of legal understanding and application.
According to the provisions of Article 41 of the current Labor Contract Law, if one of the following situations is required, the reduction of more than 20 employees or the reduction of less than 20 but accounting for more than 10% of the total number of employees, the employer shall notify the union or the whole 30 days in advance After explaining the situation of the staff and workers, and after hearing the opinions of the union or the staff, the staff reduction plan can be reduced by reporting to the labor administrative department.
Selection principles for layoffs
Enterprises must abide by the principle of social welfare when conducting economic layoffs, and they should meet the following requirements when reducing the number of candidates:
People who should be retained first: The “priority retention” here should be understood as the priority retention under the same conditions as the company’s layoffs. Employees who have one of the following conditions should be retained first:
A long-term fixed-term labor contract is signed with the unit; a non-fixed-term labor contract is signed with the unit; there is no other employed person in the family, and there is an elderly person or a minor who needs support.
Prohibition of reduction of personnel: In one of the following situations, an enterprise cannot terminate a labor contract with its employees through reduction, but can terminate the labor contract through negotiation:
1. Workers engaged in occupational disease hazards have not undergone pre-employment occupational health checks, or patients with suspected occupational diseases are undergoing diagnosis or medical observation;
2. Those who suffer from occupational diseases or injuries due to work and are confirmed to have lost or partially lost their ability to work;
3. Sick or non-work-related injuries within the prescribed medical period;
4. Female employees during pregnancy, childbirth, and lactation;
5. Those who have worked in the unit for fifteen consecutive years and are less than five years from the legal retirement age;
6. Personnel during the trial period;
7. Other circumstances stipulated by laws and administrative regulations.
Preferential recruitment: If the company makes economic layoffs and re-hires within 6 months, it shall notify the retrenched personnel andUnder such conditions, priority is given to recruiting reduced personnel.
Other possibilities for Netease layoffs
In contrast, the “NetEase layoffs” incident has far more than one solution.
First of all, from the perspective of jurisprudence, Article 40 of the Labor Contract Law of the People’s Republic of China stipulates that, in one of the following circumstances, the employer shall notify the worker in writing 30 days in advance or pay the worker an additional month. After salary, the labor contract can be cancelled:
1. Workers who are ill or are not injured due to work and are unable to engage in the original work after the prescribed medical period expires, or engage in work arranged by the employer;
2. Workers are not qualified for work, and after training or adjustment of jobs, they are still incompetent;
3. Significant changes have taken place in the objective conditions upon which the labor contract was concluded, which has made it impossible to perform the labor contract. After negotiation between the employer and the employee, no agreement has been reached on changing the content of the labor contract.
These are legal outlets at the legal level.
In addition, at the internal operation level of the enterprise, it is possible to adjust the position or department setting, and when the employee’s medical period expires (after the unit solicits the union’s opinion), it is legally based on Article 40 of the Labor Contract Law of the People’s Republic of China < span class = "text-remarks" label = "Remarks"> (3) , significant changes have taken place in the objective conditions on which the labor contract was concluded (The post has disappeared or the department has been lost) , resulting in the labor contract being unable to be fulfilled, and the negotiation failing to change the labor contract agreement. The employee was notified in writing 30 days in advance and the labor contract was legally and legally terminated.
Companies can also adopt a more humane approach. According to public media reports, given that it is known that before the game was planned, employees themselves were diagnosed with a type of myocarditis by the hospital (At this time, the unit should exclude the possibility of occupational diseases) / span>, in the absence of a suitable job, in the premise of consultation with the employee, you can adjust to a relatively easy work position without reducing income to adapt, or simply let the employee rest at home or hospital income Issued as normal,After the medical period expires until the term of the labor contract expires, the contract naturally ends.
This article is from WeChat public account: Economic Observer (eeo-com-cn) , author: Zhuang Yi (Lauda laboroot law firm lawyers), GRAPHIC (Deputy Director of Lauda laboroot lawyer, senior partner)