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Labor case review: Mr.Shi v HD Corporation
2019-04-11

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Case materials

Mr. Shi was employed by LYS Corporation, a state-owned enterprise in Shanghai and began to work in October, 2002. In 2008, LYS Corporation was purchased by HD Corporation, a state-owned enterprise in Shanghai and turned into a subisidiary of HD Corporation. In December 30, 2010, Mr. Shi signed employment contract with HD Corporation (“Employer”) and worked as an assistant of manager of headquarter of administrative affairs. In October 1 ,2011, both parties renewed the employment contract and entered into open-ended employment contract attached with the supplementary agreement specifying his annual salaries is 114,648 yuan(RMB). After restructuring of corporatal governance, Employer had quite a few redundent employees holding high positions. In June, 2016,  Employer introduced a position competition program for positions of all levels, including general manager of department, which required all the incumbent shall compete for their current position. Any other employees may compete for higher positions. If the incumbents failed in higher position competition, they shall compete for other positions at lower level. Mr. Shi missed enrollment for competing for his position as assistant general manager due to his illness. Therefor, Employer arranged for him to compete for the lower positions. But Mr. Shi rejected this arrangement and remained in his original office. For Mr. Shi did not attend position competition, so Employer unilaterally arranged Mr.Shi to work as project administrator which is at lower level and paid less, and sent him a written notice for such end.  But Mr.Shi declined the demotion and still remained in the original office. Employer paid Mr.Shi remuneration according to the remuneration standard for the project administrator post. Mr.Shi were not satisfied and then sent his disagreement on this. In March 2,2017, Mr. Shi filed petition to Changning Labor and Personnel Dispute Commission for arbitration of following claims:

i. To order Employer pay the amount of 10614yuan deducted;

ii. To order Employer pay owned fixed year-end bonus,namely 13937.

Employer's argument.

First, Employer has right and freedom to adust employees' position through introducing position competition program and its employees has obligation to obey.

Second, Mr. Shi are aware of the position competion program and did not attend it. His position was obtained by other employee through fair competition. Therefore Employer has right to arrange him to a project administrator of lower level. 

Third, according Employer's policies and supplementary agreement signed, Mr. Shi shall be paid according to the remuneration standard for the new position when his origninal position was changed.

Last but not least, Mr.Shi did not go to the new post and had done nothing after he was demoted. Therefor, Employer is not obligated to pay him salary responding to the assistant general manager 

Employee's lawyer's argument

First, Employer has no right to unilaterlly change his post and force him to leave his original post and accept position of lower level and paid much less.

Second, Mr.Shi is competent for his position and his score of performance appraisalment is high. 

Third, Mr.Shi is not aware of enrollment period for position competition during which he was in his sick leave.

Finally, Mr. Shi did put away his work documents and received no other task. He failure to work normally was caused by Employer at fault. So, Employer shall pay Mr. Shi full amount of salary according to his original position and provisions provided in supplementary agreement. 


Award by Changning Labor and Personnel Dispute Commission

The Arbitrator held that Employer had right to adjust its employees' position through introducing position competition program according to needs of employer's business and rendered an award denying Mr.Shi's all claims.


Mr. Shi is not satisfied with the Award rendered by Changning Labor and Personnel Dispute Commission and filed lawsuit with Court of law in Changning.

Judgment by Changning Court of law

The judge Mrs. Zhou held that Employer are not allowed to change Mr. Shi's position and lower his salary unilatterlly without legal cause. It is unlawful that Employer adjusted Mr.Shi's position and lower his salary without his consent but through introducing positions competition program. Employer shall pay deducted salary and year-end bonus for it is Employer's fault that Mr. Shi could not work normally.


 


 


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