Panke (Beijing) Technology Co., Ltd. v. Xi**: Employment dispute — appellate civil judgment

Panke (Beijing) Technology Co., Ltd. v. Xi**: Second-instance Civil Judgment in an Employment Dispute. Publication date: 9 October 2014.

Appellant (defendant at first instance): Panke (Beijing) Technology Co., Ltd., domiciled at Room 806, Floor 8, Building 1, No. 16 Chaowai Dajie, Chaoyang District, Beijing.

Legal representative: Zhang**, general manager.

Authorized representative: Zhou Ruoqi, lawyer at Beijing Zhongyou Law Firm.

Authorized representative: Li Xiaoxia, lawyer at Beijing Zhongyou Law Firm.

Respondent (plaintiff at first instance): Xi**, female, born on ****年**月**日 [date masked in the source].

Authorized representative: Xi Dao***, female, born on ****年**月**日 [date masked in the source].

In this employment dispute with respondent Xi**, appellant Panke (Beijing) Technology Co., Ltd. (hereinafter “Panke Company”) appealed to this Court against Civil Judgment (2014) Chao Min Chu Zi No. 13226 of the Beijing Chaoyang District People’s Court. After accepting the appeal, this Court duly constituted a collegiate bench comprising Judge Jiang Hui as presiding judge and Judges Wang Ben and Huo Siyu. A public hearing was held on 7 August 2014. Panke Company’s authorized representative Li Xiaoxia and respondent Xi** appeared and participated in the proceedings. The proceedings have now concluded.

Xi** stated in her first-instance complaint: She joined Panke Company in July 2012 as customer service director at an after-tax wage of CNY 20,000 per month. On 16 January 2013, Panke Company unilaterally notified her that her employment contract was being terminated. During her employment, the company arranged eight days of overtime in December 2012 and January 2013 but provided neither compensatory time off nor overtime pay. She therefore brought proceedings, requesting that Panke Company: (1) pay CNY 11,034.48 in wages for 1–16 January 2013; (2) pay CNY 14,712.64 in overtime wages for December 2012 and January 2013; (3) pay CNY 40,000 in economic compensation for terminating the employment relationship; (4) pay CNY 16,436.78 in compensation at 25% of the amounts unpaid from January 2013 to the present; and (5) make supplementary social insurance contributions for January and February 2013.

Panke Company did not appear at the first-instance hearing and did not submit a defense.

The first-instance court found: On 9 July 2012, Xi** (Party B) and Panke Company (Party A) signed an Employment Contract providing that the contract would take effect on ****年**月**日 [date masked in the source] and end on 8 October 2013. Party B agreed to work as customer service director according to Party A’s operational needs. Party A would apply the standard working-hours system and pay Party B the preceding month’s wages in money before the eighth day of each month. The agreed after-tax monthly wage was CNY 20,000, including an 8% confidentiality allowance; the probationary wage was CNY 16,000.

On 20 November 2013, Panke Company issued a certificate stating: “On 16 January 2013, for unilateral reasons attributable to our company, we formally notified Xi** that her employment relationship would terminate on 17 January 2013. Xi** left the company on 17 January. A total of eight days of compensatory leave for overtime during her employment remained owed.”

Xi**’s bank card transaction details showed wage payments of CNY 6,469.16 on 10 July 2012, CNY 17,038.95 on 8 August, CNY 17,215.73 on 11 September, CNY 20,000 on 9 October, CNY 20,000 on 7 December, and CNY 20,000 on 7 February 2013. As to overtime, Xi** said four days were weekend overtime and four days were accumulated extensions of ordinary working days.

The first-instance hearing was scheduled for 8:45 a.m. on 12 May 2014, but Panke Company did not appear on time. At 2 p.m. that day, its authorized representative Zhao× appeared. When questioned, Zhao× said: “The company president had intended to attend, but his flight was delayed by rain, so I was told to come to court. I was only just notified, which is why I arrived in the afternoon.” Zhao× accepted the authenticity of the employment contract submitted by Xi** but said the certificate’s authenticity needed verification. Zhao× said the company had terminated the employment relationship because there were issues with Xi**’s work capability, that the company owed Xi** wages of CNY 16,186.24 and compensation of CNY 10,000, and that it did not agree to pay other amounts. Panke Company did not respond within the period set by the first-instance court regarding Xi**’s wage rate, the certificate, or the other issues.

In March 2014, the Beijing Chaoyang District Labor and Personnel Dispute Arbitration Commission issued Xi** a notice declining to accept her application.

The first-instance court held: In an employment dispute, each party bears responsibility for producing evidence supporting its own assertions. Where evidence relating to the disputed matter is held and managed by the employer, the employer must produce it; failure to do so entails adverse consequences. Panke Company failed to respond within the period set by the first-instance court concerning its comments on the evidence and the related issues, and must bear the adverse consequences. The evidence submitted by Xi** established that Panke Company had not paid wages for 1–16 January 2013 and part of her overtime pay. The amounts Xi** claimed were erroneous, and the first-instance court corrected them. Panke Company terminated the employment relationship but failed to prove that the termination was lawful, and therefore had to pay the corresponding damages. Xi**’s fourth request lacked a legal basis, and her fifth request fell outside the scope of employment disputes accepted by the people’s courts.

Accordingly, under Articles 47 and 87 of the Labor Contract Law of the People’s Republic of China and Article 6 of the Labor Dispute Mediation and Arbitration Law of the People’s Republic of China, the first-instance court ordered: (1) Panke (Beijing) Technology Co., Ltd. shall pay Xi** CNY 10,114.94 in wages for 1–16 January 2013 within seven days after the judgment becomes effective; (2) Panke (Beijing) Technology Co., Ltd. shall pay Xi** CNY 12,873.56 in overtime pay within seven days after the judgment becomes effective; (3) Panke (Beijing) Technology Co., Ltd. shall pay Xi** CNY 40,000 in damages for terminating the employment relationship within seven days after the judgment becomes effective; and (4) Xi**’s other claims are dismissed. If the monetary obligations are not performed within the period specified in the judgment, debt interest for the period of delayed performance shall be paid at the doubled rate in accordance with Article 253 of the Civil Procedure Law of the People’s Republic of China.

Panke Company appealed to this Court against the above first-instance civil judgment. Its principal grounds were that the first-instance court’s factual findings were incorrect: (1) Xi** attended work normally until 16 January 2013, but the court simply relied on her oral statement to order payment of wages for 1–16 January 2013, a finding lacking a factual basis. (2) Xi** submitted a certificate stating that she left the company on 17 January 2013 and was owed eight days of compensatory leave for overtime during her employment. The company did not accept the certificate’s authenticity, so the overtime award clearly lacked a factual basis. (3) The employment relationship ended on 17 January 2013 because there were issues with Xi**’s work capability. Ordering economic damages based only on her certificate was clearly an erroneous finding of fact. (4) Xi** left for personal reasons on 16 January 2013 and applied to the Chaoyang District Labor Arbitration Commission in March 2014, exceeding the one-year limitation period. Wages were withheld because she had not completed departure handover procedures as agreed with the company. There had been no overtime, so the company did not owe overtime pay. The parties signed a notice terminating the employment contract when she left, and the termination was mutually agreed; there was no unlawful dismissal by the company. It therefore requested amendment of the judgment so that it would not have to pay: (1) wages of CNY 10,114.94 for 1–16 January 2013; (2) overtime pay of CNY 12,873.56; or (3) economic damages of CNY 40,000 for terminating the employment relationship. The source states that these items total CNY 62,988.51 [sic; see translation note 3].

Panke Company submitted the following evidence to this Court: a notice of termination of the employment relationship, intended to prove that the parties had mutually agreed to terminate that relationship.

Xi** accepted the first-instance judgment. She did not submit a written response to this Court but stated orally at the hearing: She agreed with the first-instance judgment. Panke Company had dismissed her unlawfully. The company had no evidence that she failed to complete the departure handover, while she had evidence establishing overtime.

During examination of the evidence at this Court’s hearing, Xi** accepted the authenticity of Panke Company’s exhibit but disputed its intended purpose of proof. This Court held that the exhibit was not new evidence in the second-instance proceedings and was insufficient to prove mutual agreement to terminate the employment relationship. The Court therefore did not confirm that assertion.

The facts found by this Court after its hearing are consistent with those found by the first-instance court.

Those facts are supported by the corresponding evidence and the parties’ statements in the record.

This Court holds: In an employment dispute, each party bears responsibility for producing evidence supporting its own assertions. Where evidence relating to the disputed matter is held and managed by the employer, the employer must produce it; failure to do so entails adverse consequences. The evidence provided by Xi** establishes that Panke Company had not paid wages for 1–16 January 2013 and part of her overtime pay. It was not improper for the first-instance court to order payment. Regarding termination of the employment relationship, Panke Company contends that the parties mutually agreed to terminate it, which Xi** disputes. The existing evidence shows that Panke Company terminated the employment relationship but failed to prove that its termination was lawful. The termination was therefore unlawful, and the company must pay economic damages for unlawful termination. The first-instance court’s calculation of those damages in accordance with law was proper, and this Court confirms it. As to the company’s contention that Xi**’s claims exceeded the arbitration limitation period, it did not raise that contention at first instance, and this Court does not accept it. In conclusion, Panke Company’s appellate requests lack sufficient grounds and are not supported. The first-instance judgment was proper and should be upheld. Pursuant to Article 170(1)(1) of the Civil Procedure Law of the People’s Republic of China, the Court renders judgment as follows:

The appeal is dismissed, and the original judgment is upheld.

The first-instance case acceptance fee of CNY 5 shall be borne by Panke (Beijing) Technology Co., Ltd. and paid within seven days after this judgment becomes effective.

The second-instance case acceptance fee of CNY 10 shall be borne by Panke (Beijing) Technology Co., Ltd.; it has already been paid.

This judgment is final.

8 August 2014.