preface
As the economic climate continues to deteriorate, the employment situation has become increasingly challenging over the past two years. Countless workers have been laid off, and my relatives and friends around me are constantly facing the risk of layoffs. The labor dispute cases I handle related to "layoffs" have also been on the rise. During case handling, Ive observed that many workers lack basic understanding of layoff procedures and dont know how to handle layoffs calmly. Some workers even unwittingly sign termination agreements or voluntary resignation forms, putting them at a disadvantage in subsequent arbitration and litigation processes. As a result, they ultimately fail to receive the compensation they were entitled to.
Based on the above situation, I decided to start from the perspective of workers and make a simple and easy to understand and operable "Layoff Manual" for you, so that you can calmly deal with it and get due or more compensation when you are unfortunately laid off.
Target readers: Ordinary workers at risk of layoffs
Purpose of the manual: popularize legal knowledge, clarify their own rights, master coping strategies, protect their legitimate rights and interests in the process of layoff, and strive for the best results
Core principles: legality, rationality, evidence and strategy
catalogue
preface
Target readers: Ordinary workers facing the risk of layoffs
Core principles: legality, reasonableness, evidence and strategy
Part 1: Basic knowledge-What is "cutting" and what is "compensation"?
I. Key terms (clear definition, avoid confusion)
II. Big Revelation of Industry Black Talk —— What exactly is N, N+1 and 2N? How to calculate them?
Part 2: Taking the initiative-How to "grasp" the company and strive for optimal solutions
I. Identifying Layoff signals and Initial Response (Stay alert and gather information)
Core Strategy: Master the initiative of negotiation (negotiation is the key battlefield to gain benefits)
III. NEGOTIATION TECHNIQUES
Part III: The legal arsenal-formal avenues of rights
I. Labor inspection reports
Labor arbitration (core safeguard channel)
III. COURT ACTION
Appendix I: Summary of relevant core provisions of the Labor Contract Law
Appendix II: template of evidence catalogue
Appendix III: template of arbitration application
Part 1: Basic knowledge-What is "cutting" and what is "compensation"?
I. Key terms (clear definition, avoid confusion)
(1) Layoff: In a broad sense, it refers to the act of an employer to terminate or terminate a labor contract; in a narrow sense, it refers to the "economic layoff" stipulated in Article 41 of the Labor Contract Law (which needs to meet legal conditions and procedures).
Legal conditions for economic layoffs: 1) Bankruptcy reorganization; 2) Severe operational difficulties; 3) Staff reductions required for production shifts, major technological innovations, or operational restructuring; 4) Other circumstances significant changes in objective economic conditions during contract formation render labor contracts unfulfillable, resulting in layoffs of over twenty employees or under twenty but exceeding 10% of total workforce.
The procedure of economic layoff: it is necessary to explain the situation to the labor or all the workers 30 days in advance and listen to their opinions, and report the layoff plan to the labor administration department.
Note: Many companies ostensibly conduct layoffs under the guise of "economic layoffs," but either fail to meet the required conditions or bypass standard procedures. Employees should carefully verify whether the company qualifies for economic layoffs. If the company doesnt meet these criteria, this critical fact can serve as leverage to negotiate better terms with the employer.
(2) Termination of labor contract: If the labor contract has not expired, the employer or the worker shall propose to terminate the labor relationship in advance.
In addition to the aforementioned economic layoffs, the circumstances under which employers may terminate employment contracts and pay severance compensation as stipulated by law generally refer to non-fault termination. Article 40 of the Labor Contract Law stipulates: In any of the following circumstances, an employer may terminate the labor contract after giving the employee thirty days written notice or paying an additional months salary:
(1) the laborer is ill or injured outside the work, and after the expiration of the prescribed medical period, he is unable to engage in his original work or the work separately arranged by the employing unit;
(2) the laborer is unable to perform the work and is still unable to perform the work after training or adjustment of the post;
(3) The objective conditions on which the labor contract is concluded have changed significantly, making it impossible to perform the labor contract, and the employer and the laborer fail to reach an agreement on the modification of the labor contract.
Summary: Both economic layoffs and non-fault dismissals are subject to specific legal conditions, as companies do not have arbitrary termination authority. In most cases, when negotiating layoffs, employers may neither meet the criteria for economic layoffs nor non-fault dismissals, often acting "merely to reduce staff and costs." If employees object, employers cannot force termination through severance pay, as such actions may constitute illegal termination requiring financial compensation.
II. Big Revelation of Industry Black Talk—— What exactly is N, N+1 and 2N? How to calculate them?
N: This typically refers to the severance pay mentioned above, calculated as follows: 1 months salary is paid for each full year of service. For periods between 6 months and 1 year, it is calculated as 1 year; for periods under 6 months, half a months salary is paid. For example, if an employee worked at the company for 2 years and 3 months, the severance pay calculation period would be 2.5 years.
The calculation formula is: the average salary of the 12 months before termination (including bonus, allowance, individual income tax, social security and other income) * working years.
N+1: refers to the economic compensation (N) + 1 notice (1), that is, one more months salary on the basis of the economic compensation.
Notice of Payment: When an employer terminates a labor contract under Article 40 of the Labor Contract Law (non-fault termination) without providing 30 days written notice, they must pay an additional months salary. In other words, if the company provides 30 days written notice in advance, it may be exempt from paying this additional wage.
2N: refers to the economic compensation, which is twice the economic compensation, and is usually applied when the employer unlawfully terminates the contract.
Some content of "Handbook on Job Redundancy-Practical Edition for Workers" is displayed
How to get the complete version of the Layoffs Handbook-Workers Practical Edition
If you are facing layoffs or may face layoffs in the future, you can add Yins wechat friends to get the full version of the manual, including the template of "Arbitration Application" and "Evidence Catalog".
We sincerely hope that this manual will help you through the economic downturn.
The writer:
Ms.Yin Sisi
Yin Sisi graduated from East China University of Political Science and Law. Her business areas are civil and commercial dispute resolution, intellectual property and corporate compliance. She has provided professional legal consultation and whole-process compliance services for many enterprises.
Mobile phone number (same as wechat): 18717724521
