In the “Employee Handbook”, Company A has stipulated while an employee asks for an emergency sick leave, the employee shall go through the formalities in 3 working days upon the completion of the sick leave, otherwise, the employee’s absence shall be deemed as absenteeism. Mr. Wang asked for an emergency sick leave, but he failed to go through the formalities. Six months later, Company A terminated Mr. Wang’s labor contract with the reason that his absence should be deemed as absenteeism, which had severely violated the company’s rules and regulations. Mr. Wang filed the dispute to the labor arbitration committee. The committee stated that Company A failed to deal with the said absenteeism within 6 months, so Company A should be deemed as have had acquiesced his absence was a sick leave other than absenteeism. Finally, the committee decided that Company A had terminated the labor contract illegally.
The key point of this case is while an employee has severely violated the company’s rules and regulations, is there any given period for the employer to deal with such misconduct? Article 20 of ‘Regulation on Rewards and Penalties Given to Enterprise Staff and Workers’ has stipulated while a worker’s action shall be punished by terminating the labor contract, the given period shall be no more than 5 months, for other punishments, the given period shall be no more than 3 months. The given period shall begin from the date when the worker’s action was confirmed as an misconduct. However, this Regulation has been expired.
In view of this, many companies believe that the employee’s misconduct could be dealt at their own discretion. In practice, many companies take advantage of such misconduct, which says that a company would take the employee’s misconduct as an excuse, while the employee has a poor performance, or the company wants to terminate the labor contract for some other reasons. However, in the judicial practice, such ‘lagging’ punishment may be against by the labor arbitration committee and the court.
In fact, laws and regulations could not stipulate the given period for dealing with all kinds of misconduct, however, the procedure as required by the relevant laws and regulations shall be reasonable and equal. Areasonable procedure shall include a reasonable giving period in dealing with the misconduct. Take Wang’s case for example. Normally, the salary would be paid monthly, and the employer would check the emploee’s attendance while calculating the salary,. Even if the attendance would be check in the following month, practically, the company should have noticed that Wang had been absent for several days, it should investigate the reason and make the appropriate decision on such absence. So it is unreasonable for the company to deal with such issue after 6 months. An equal procedure refers to the same misconduct shall be dealt with within the same procedure (such as the given period). For example, the employer deals with the misconduct before the KPI examination or after the KPI examination, then the employee’s KPI bonus would be totally different.
In order to deal with the employee’s misconduct within a reasonable given period, there are 2 aspects could be paid attention to:
Firstly, in order to avoid the failure in obtaining the relevant evidence, the employer shall investigate the misconduct timely, and keep the relevant evidence, including the employee’s explanation in person, the employee’s written statement.
Secondly, the employer could prescribe a general article on the given period in dealing with a misconduct based on the employer’s current situation. For example, if a company has a large amount of employees, it would be more efficient for the company to deal with such misconduct in a specific period. Or if the company wants to observe the employee who has made a misconduct and finally decides whether such misconduct shall be dealt with or not, then such general article would be useful. The general article could be drafted as, the company would deal with the misconduct quarterly, except those special misconduct. Such article could help the employer to control the legal risks, and perform the reasonable procedure as required by the laws and regulations. On the other hand, such article could also be flexible and efficient for the employer to manager employees.