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The Importance of Service Clause in Employment Contracts — Case in Case of An Employee

Update time:2021/7/21 16:28:48 Browse times:690

Keywords: Clause of Service | Employees' Leaving without Leaving without Leaving | Notice of Release | Risk Prevention

 

In the process of employment, occasionally encountered employees who are still within the term of the labor contract but leave without Leaving without Leaving without Going to work can not be contacted. When I do legal work in enterprises, I have also encountered human resources departments to consult how to deal with this situation, whether the labor contract will be automatically rescinded or terminated? How can enterprises operate to avoid risks? Before answering this question, let's take a look at the relevant provisions of the Labor Contract Law on the rescission or termination of labor contracts.

Whether the labor contract will be automatically rescinded?

Articles 36 to 40 of the Labor Contract Law stipulate three forms of rescission of labor contracts, namely, rescission through consultation, rescission by workers and rescission by employers. Leaving without Leaving without Leaving is obviously not the first two forms of rescission. Among the six situations for rescission by employers as provided in Article 39 of the Labor Contract Law, there is no provision that an employer may rescind an employee if he leaves without Leaving without Resignation. However, the provision in Subparagraph 2 of Article 39 of the Labor Contract can be based on the fact that the number of days of absenteeism of an employee constitutes a serious violation of the employer's rules and regulations, and the employer may rescind the labor contract. Even if there is no specific provision in the rules and regulations, it can still be based on the provision of "serious violation of labor discipline" in Subparagraph 2 of Article 25 of the Labor Law.

Will the labor contract terminate automatically?

The termination of a labor contract is a statutory act. The labor contract can be terminated only under the statutory circumstances, that is, the labor contract cannot be terminated according to the agreement, otherwise the agreement is invalid. Article 44 of the Labor Contract Law stipulates six situations for the termination of a labor contract, which can be summarized as follows: (1) the expiration of the labor contract; (2) the loss of the employee's subject qualification; (3) the loss of the employer's subject qualification. Obviously, the departure of an employee without Resignation does not belong to the above three situations for statutory termination. If it is stipulated in the employer's rules and regulations or the labor contract that the labor contract shall be terminated without Resignation, such stipulation is invalid.

Therefore, the labor contract will not be automatically terminated or terminated if the employee leaves without Resignation. However, as the labor relationship between the two parties still exists as a result, there are great potential risks and dangers if left unchecked.

Article 50 of the Labor Contract Law stipulates that "an employer shall, upon rescission or termination of a labor contract, issue proof of rescission or termination of the labor contract and shall, within 15 days, complete the formalities for the employee's file and social insurance transfer."Article 89 of the Law stipulates that "where an employer violates this Law by failing to issue to the employee a written certificate evidencing the termination or dissolution of the employment contract, the employer shall be ordered by the labor administrative department to make corrections; where the employee suffers any harm or loss as a result thereof, the employer shall be liable for damages."Article 87 of the Labor Contract Law also stipulates that "where an employer illegally rescinds or terminates a labor contract, it shall pay damages to the employee in accordance with the law."It is thus clear that issuing proof of rescission or termination of a labor contract to an employee is a statutory obligation of the employer. If the employer fails to perform such obligation, it may face the risk of being ordered to make corrections, assuming compensation liability or paying damages.

Article 24 of the Provisions of the Higher People's Court of Jiangsu Province on Several Issues Concerning the Trial of Labor Dispute Cases stipulates that "where a decision of rescission of a labor contract made by an employer has not been served on the employee or has not been made public by such means as a public notice when served on the employee, such decision shall have no binding force on the employee. If the employee requests to revoke such decision, such decision shall be revoked."Article 22 of the Minutes of the Higher People's Court of Shandong Province on Several Issues Concerning the Trial of Labor Dispute Cases stipulates that "where an employer dissolves a labor contract in accordance with the relevant provisions of the Labor Contract Law, the employer shall refer to the provisions of service of arbitration institutions and courts to serve the notice of rescission of a labor contract in accordance with the law. Where the whereabouts of the person to be served is unknown, or the document is still unable to be served directly, by leaving at the place of abode, by mail or by electronic means, the document can be served by public notice. "Article 20 of the Answers to Several Issues Concerning the Trial of Labor Dispute Cases stipulates that "where an employer dissolves a labor contract with an employee, it shall be in principle of direct service, and service by leaving at the place of abode or by mail as a supplementary method, unless the employer has evidence to prove that the employee's whereabouts are unknown or the employee is unable to serve by other means, service by public notice can be applied."As can be seen from the above provisions of the Provincial Higher People's Court and the Municipal Intermediate People's Court, an employer shall serve a notice of termination to the employee at the same time. If the notice fails to be served, the employee shall not be binding on him/her, and the employee may request for revocation of the notice. In respect of the choice of methods of service, service by public notice shall be applicable only when all the other methods of service remain unavailable, i.e. service by public notice is not directly applicable. Therefore, only if a notice of termination is issued and is validly served, can the employer effectively claim that it has fully performed the obligations that it shall have performed in accordance with the law.

Generally, an employer is aware that it is sent a work notice to an employee by telephone, text message, WeChat, email and other means if the employee is unable to work for a reason other than force majeure or due to illness, and the employer is aware that it is issued a notice of termination in accordance with the relevant provisions of labor discipline or rules and regulations. However, it often is encountered with problems in delivering the notice. Through case search, it is found that most labor disputes are related to the termination of labor contracts, and among the disputes of termination of labor contracts, part of the disputes arose due to the issuance or service of the notice of termination. The reason is that some employers neglect the service clause or the agreement is too general and ineffective in the process of signing an employment contract with the employee, resulting in the claim of effective service in litigation.

The service clause is one of the most important clauses in an employment contract, but it is often ignored by the employer and its importance will not be realized until the employer is involved in a lawsuit. Part of the contract risks comes from the terms and conditions of the contract, and part from the failure to effectively prove the fulfillment of the obligations during the performance of the contract. How can an employer effectively serve the notice of termination after it issues a notice of termination to an employee without leaving his/her employer to avoid risks? Based on the above analysis, the author makes the following three suggestions:

(I) The service clause shall be separately stipulated in the employment contract. Article 17 of the Employment Contract Law stipulates nine major clauses that should be included in an employment contract. Meanwhile, this article also stipulates other matters that the employer and the employee can stipulate in the employment contract. Some employers only pay attention to the essential clauses and make no other agreements. In view of the importance of the service clause discussed above, we suggest that the employer include a separate service clause in the employment contract.

(II) The service clause shall stipulate clearly and specifically. Although some employers stipulate service of legal documents, the stipulations are too general and lead to disputes in the application of such agreement. For example, "Party B's home address is the address for service of legal documents." Does the home address refer to the household registered address or the permanent address? Is the service of legal documents applicable to the notice of termination of an employment contract? Generally, the service clause includes the content, communication method, address, service method and deemed service. The delivery contents may stipulate that any documents to be delivered by Party A to Party B, including but not limited to the notice of termination of an employment contract and other correspondence; in addition to the mailing address and contact information of the employee himself/herself, such mailing address and contact information of the designated recipient, and specify that any party shall notify the employer in writing of any change in the mailing address and contact information of the party. Based on the analysis of the relevant provisions on the service methods, in order to reduce the inconvenience of direct service and the indirect application principle of service by announcement, service by mail may be stipulated in the service clause as a method agreed upon by the parties. Meanwhile, it shall be specified that if relevant documents could not be actually received due to the reasons that the contact information and contact address provided or confirmed by the employee are inaccurate, or the employee fails to notify the employer in a timely manner as agreed after any change in the address, or the employee and the designated recipient refuse to sign for a receipt, the return date of such documents shall be deemed as the service date.

(III) Pay attention to retaining evidence. As mentioned above, part of the contractual risks stems from the failure to effectively prove the full performance of the obligations during the performance of the contract. Therefore, the employers shall pay attention to retaining evidence in the notification and service. In view of the cases in trial practice there are cases where they believe that sending a collection notice through an ordinary courier company will not result in the interruption of statute of limitations, we suggest that important correspondence such as the notice of termination of labor contract with the employee should be sent by express mail by the post office with the words "Notice of Termination of Labor Contract with the xxx company" indicated on the cover and keep the return receipt of the express mail.

Service clauses are important not only in employment contracts but also in business contracts. Article 96 of the Contract Law provides that "If a party claims to terminate a contract, it shall notify the other party. The contract shall be terminated upon the receipt of the notice by the other party. "Article 565 [Procedure for Termination of Contract] of the Civil Code provides that "If a party claims to terminate a contract according to law, it shall notify the other party. The contract shall be terminated upon the receipt of the notice by the other party. "It is thus obvious that the contract shall not be terminated until the notice of termination reaches the other party. Therefore, a business contract expressly stipulates for delivery clauses, specifies the contact information and mailing address of the parties or the designated recipient, and requires the party to be responsible for the validity and authenticity of the information provided by it. In the event of any change in the contact information and address, the party concerned shall promptly notify the other party in writing and confirm by the other party in writing. If not, the original mailing address shall be deemed as continuing effective. Meanwhile, the situation which shall be deemed to have been served shall be expressly stated in the clause in advance for avoidance of disputes.

Returning to the issue mentioned at the beginning of the article, if the delivery clause has been explicitly and effectively agreed at the beginning of the signing of the employment contract, such as telephone, text message, WeChat, email, etc. when an employee leaves without resignation, to confirm the employee is unable to work due to reasons other than force majeure or illness, a notice of termination of the employment contract shall be given in accordance with relevant provisions of rules and regulations and the employment contract shall be delivered as agreed upon by the parties. But if a valid delivery clause is not explicitly agreed upon, the above issues may be at a loss and a lawsuit may be triggered by failure. Therefore, the person reviewing a contract should conduct the review with an issue-oriented approach. Prevention is often more important than remedies afterwards, otherwise even if a case is won, it is time consuming and labor consuming. In the context of the disclosure of judgments and rulings, the information involved may also affect the company's next transaction, at a loss. The so-called details determine success or failure, in the termination of the employment contract can also be reflected on the issue of service.