China Employment Law Network
Shanghai Business Lawyer
Section D: Dispute resolution

• If an employee sues the company, how should the company react?

The best thing to do is to seek professional legal help. A lawyer will be able to assist the employer in collecting any evidence (this step is very important, as strong evidence is often the key to the success of any case) and then represent the employer during the arbitration and litigation procedures.

• I am worried about employees making claims against the company, what I can do?

By seeking  professional legal help before a dispute arises, employers can put measures in place to reduce the risk of employees making claims; a  lawyer can evaluate potential risks and review the existing  employee handbook, company rules and regulations and other documentation and make suggestions about potential improvements.  If an employee does then make a claim, the lawyer is in a better position to represent the company and resolve the issues quickly and efficiently and hopefully avoid the dispute going to court.

• Is there a maximum amount that the employee can be awarded in an employment dispute?

There is no a maximum amount that the employee can be awarded in an employment dispute. However, if the employer dismisses the employee in accordance with the provisions of law, standard compensation (severance pay) must be paid.

Severance pay is based on the number of years worked, at the rate of one month’s wage for each full year worked, or half a month’s wage for employees of six months or less. Any period of more than six months but less than one year will be counted as a year.

 There are some minor geographical restrictions which may also affect the calculation of  severance pay  but if you are unsure about how much to pay your employee or would like  us to calculate  the correct amount of compensation for you, please contact us and we will  be happy to help.

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