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    Dissolve the Labor Contract for Illegal Birth

    Ms. Lee was the customer service staff at a Nanjing Company, and she got pregnant again. The company confirmed that Ms. Lee had violated the family planning policy, so it dissolved the labor contract without paying economic compensation, according to Article 24 of “Employee’s Labor Contract Management System”, which says that an employee violates the family planning policy shall be deemed as the employee has severely violated the employer’s internal rules. Later on, Ms. Lee brought the dispute to the labor arbitration committee, but she failed to obtain the support of the committee. However, there is a similar case happened in Dafeng city, Jiangsu province, Ms. Liu failed in the labor arbitration procedure, but obtained the support of the first instance court. The Dafeng case has been listed in the 2014 Jiangsu Province Higher People’s Court Gazette.

    In view of those 2 cases, the employer is pushed to an embarrassed corner on dealing with such case.

    Article 39 of “Labor Contract Law” has prescribed 6 circumstances that the employer could dissolve the labor contract without paying economic compensation, but illegal birth has not been listed in. Therefore, if the employer dissolves the labor contract by the reason of illegal birth, normally, such action shall be deemed as illegal dissolution.(As the exception, some local governments, such as Jiangxi, Hainan province, have stipulated in the local regulations that the employer shall be entitled to dissolve the labor contract under such circumstance). In practice, the typical relevant dispute is that if the employer has prescribed “Illegal Birth” as a severe violation of the employer’s internal rules as stipulated in “Labor Contract Law” Article 39, paragraph 2, whether such article is valid?

    “Population and Family Planning Law” has stipulated that the employer could punish the employee for illegal birth. “Reply for Solving the Labor Dispute Related to the Violation of Family Planning Policy” (Lao Ban Li Zi (1992) No.15) has prescribed while dealing with such labor disputes, the labor administration department shall be in pursuance of the labor laws and regulations, the national and local rules and regulations on family planning policy, and the enterprises’ internal rules which meet the requirements of the relevant laws and regulations. In view of these, the supporters insist that the relevant laws and regulations have granted the employers with right to punish the employees based on their internal rules, which are drafted democratically and disclosed to the employees in accordance with Article 4 of “Labor Contract Law”. In practice, some verdicts are made based on such opinion. For example, (2013) Tai Jiang Min Chu Zi No.2071 made by the people’s court of Jiangyan District, Taizhou city; the (2014) Ning Min Zhong Zi No.5106 made by the people’s court of the intermediate people’s court of Nanjing.

    However, Article 42 of “Labor Contract Law” has stipulated that the employer shall not dissolve the labor contract with the female employee who is in her pregnancy, confinement, or nursing period; and Article 27 of “Law on the Protection of Women’s Rights and Interests” has stipulated that no entity may, for the reason of matrimony, pregnancy, maternity leave or breast-feeding, decrease a female employee’s wage, dismiss her or unilaterally terminate the labor (employment) contract or service agreement. In view of these, some people insist that the employer shall not be entitled to dissolve the labor contract for illegal birth. The case in the opening just reflects such opinion.

    Since there is no unified opinion in the judicial practice for illegal birth, we suggest the employers could take the following ideas into consideration. Firstly, it would be better to check the local regulations and judicial practice tendency. If the local regulations have prescribed that the employer is entitled to dissolve a labor contract for illegal birth, or the local judicial departments would support the employer to define illegal birth as the severe violation of internal rules, then the employer could design the internal rules as aforesaid, and dissolve the labor contract accordingly.

    Secondly, if there are no local regulations, nor the support of the judicial departments, it would be better to design other punishments instead of dissolving a labor contract, such as set illegal birth as an element in KPI, which might affect the salary increase, year-end awards and promotion; or set illegal birth as a kind of violation of internal rules with appropriate penalties (such as a waring and etc.).

    However, if the illegal pregnant employee has severely violated the internal rules for other actions, the employer could also dissolve the labor contract according to paragraph 2, Article 39 of “Labor Contract Law”.