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

Civil Judgment

Appellant (defendant at first instance): Panke Health Technology (Beijing) Co., Ltd., domiciled at Rooms 305–306, Building 1, No. 16 Chaowai Dajie, Chaoyang District, Beijing.

Legal representative: Yifeng Zhang, chairman of the board.

Authorized representative: Fan Zhiqiang, lawyer at Beijing Zhongyou Law Firm.

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

In this employment dispute between appellant Panke Health Technology (Beijing) Co., Ltd. (hereinafter “Panke Company”) and respondent Wang*, the appellant appealed to this Court against Civil Judgment (2014) Chao Min Chu Zi No. 30341 of the Beijing Chaoyang District People’s Court. After accepting the appeal, this Court duly constituted a collegiate bench comprising Judge Jiang Wei as presiding judge and Judges Li Ran and Huo Siyu. The proceedings have now concluded.

Wang* stated at first instance: Wang* had been employed by Panke Company as design director, and the parties had entered into an employment contract. They later terminated the employment relationship and signed a departure agreement. Panke Company undertook to pay Wang* wages and expense reimbursements totaling CNY 124,058.90 by 30 September 2013, but thereafter refused to pay those amounts. Wang* then applied for arbitration to the Beijing Chaoyang District Labor and Personnel Dispute Arbitration Commission (hereinafter the “Chaoyang Arbitration Commission”), which declined to accept the application. Wang* therefore brought proceedings in the first-instance court, seeking an order that Panke Company pay wages of CNY 95,318.30 and reimbursements of CNY 28,740.60, totaling CNY 124,058.90.

Panke Company responded at first instance: It did not agree to Wang*’s claims. Wang* had indeed been its employee, and the relevant agreement had been signed, but the company’s business was currently performing poorly and it was unable to pay the arrears.

The first-instance court found after hearing the case: Wang* joined Panke Company on 1 March 2013 as design director, at a monthly wage of CNY 17,950.75. On 1 March 2013, the parties entered into an employment contract for the period from 1 March 2013 to 29 February 2016. Wang* last worked on 31 August 2013, and the employment relationship ended that day.

Wang* further contended that the parties had mutually agreed to terminate the employment relationship, completed the handover on 11 September 2013, and signed a departure agreement providing that Panke Company would pay his wages and reimbursements by 30 September 2013. In support, Wang* submitted: (1) a departure handover form showing completion of the handover between Wang* and Panke Company, bearing the company’s official seal; (2) a departure agreement stating that Wang*’s last actual working day at Panke Company was 31 August 2013 and that, after Wang* completed all handover tasks, Panke Company would pay him wages and other expenses of CNY 124,058.90 before 30 September 2013; and (3) a wage breakdown showing total wages payable of CNY 115,314.07, total wages paid of CNY 19,995.77, unpaid wages of CNY 95,318.30, reimbursements of CNY 28,740.60, and a total unpaid amount of CNY 124,058.90, bearing Panke Company’s official seal. Panke Company acknowledged that the parties had mutually agreed to terminate the employment relationship and had signed the departure agreement, but said that business difficulties had prevented it from paying the amounts stipulated in that agreement. Its comments on the evidence were: (1) it accepted the authenticity of the seal on the departure handover form but said the company had not affixed it and disputed the form’s contents; (2) it accepted the authenticity of the departure agreement but said the agreed amounts had not been paid because of business difficulties; and (3) it accepted the authenticity of the seal on the wage breakdown but said the company had not affixed it and disputed its contents.

The first-instance court also found that, on 20 June 2014, Wang* applied to the Chaoyang Arbitration Commission for employment arbitration of the parties’ dispute, requesting payment of wages, reimbursements, and other amounts. The commission subsequently issued Notice of Non-Acceptance Jing Chao Lao Zhong Bu Zi (2014) No. 01174, deciding not to accept the application. Wang* disagreed and brought these proceedings.

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. In this case, both parties acknowledged that the employment relationship had ended and that they had signed a departure agreement. Panke Company also accepted the authenticity of the departure agreement submitted by Wang*, so the first-instance court accepted that agreement as evidence. It provided that Panke Company was to pay Wang* wages and other expenses of CNY 124,058.90 by 30 September 2013, but the company had not paid. Considering the parties’ statements together with Wang*’s evidence, the first-instance court accepted Wang*’s claim and held that Panke Company was required to pay the wages and other expenses stipulated in the departure agreement, totaling CNY 124,058.90. Accordingly, pursuant to Article 6 of the Labor Dispute Mediation and Arbitration Law of the People’s Republic of China, the first-instance court ordered Panke Company to pay Wang* the wages and other expenses stipulated in the departure agreement, totaling CNY 124,058.90, within ten days after the judgment became effective. If the monetary obligation was not performed within the period specified in the judgment, debt interest for the period of delayed performance was to 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 Wang* had indeed been a company employee, the parties had mutually agreed to terminate the employment relationship and signed a departure agreement, but the company’s business was currently performing poorly and it could not pay the arrears. It requested: (1) amendment of the judgment so that Panke Company would not have to pay Wang* the wages and other expenses stipulated in the departure agreement, totaling CNY 124,058.90; and (2) an order that Wang* bear all litigation costs in the case.

Panke Company submitted new evidence to this Court: Exhibit 1, one printed electronic transfer receipt, intended to prove that in July 2014 its legal representative Yifeng Zhang had transferred a total of CNY 24,500 to Wang*. It sought deduction of that sum from the amount payable under the first-instance judgment.

Wang* neither appealed against the first-instance judgment nor submitted new evidence. In a written request for determination on the papers, he stated that he accepted the first-instance judgment and did not agree to Panke Company’s appellate requests.

On review, this Court held that Panke Company’s submission was not “new evidence” within Article 41 of the Supreme People’s Court’s Several Provisions on Evidence in Civil Proceedings. Its evidentiary form also did not comply with legal requirements, and it was insufficient to achieve the intended purpose of proof. This Court therefore did not accept it.

The facts found by this Court following 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 case record.

This Court holds: 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’s defense and appeal now concern only its ability to pay. The parties’ departure agreement does not violate mandatory provisions of laws or administrative regulations and must be recognized as lawful and valid. It was not improper for the first-instance court to require Panke Company to pay the wages and other expenses stipulated in that agreement. In conclusion, the first-instance judgment made clear factual findings, correctly applied the law, and reached a proper result, 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 10 shall be borne by Panke Health Technology (Beijing) Co., Ltd. and paid to the original trial court within seven days after this judgment becomes effective.

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

This judgment is final.

18 December 2014.