Pay Attention to the Leaving Reason Stated in the Employment Separation Certificate

Zhou was dismissed by Company A, and the leaving reason stated in the Employment Separation Certificate (“ESC”) covered two aspects, (a) Zhou has seriously violated the company’s rules and procedures; and (b) Zhou is incompetent to his position. Zhou insisted that such words would affect his job search, and required Company A to delete such words. Company A refused, and Zhou filed to the labor arbitration committee. Finally, the court rejected Zhou’s claim.

The main legal basis for issuing an ESC is Article 24 of the “Regulations for the Implementation of the Labor Contract Law” (the “Regulations”), which requires the employer to issue an ESC when a labor contract has been dissolved or terminated, and the ESC shall list the term of the labor contract, the date when it is dissolved or terminated, the position of the employee and the working time of the employee with this employer. It is a pity that this article has described the contents which shall be listed, but failed to mention whether other contents could be listed, such as the leaving reason. Article 15 of the “Circular on Several Issues Concerning the Implementation of the Labor Contract System” (Lao Fafa [1996] No. 354) stipulates that an ESC shall list the term of the labor contract, the date when it is dissolved or terminated, the position of the employee; and the employer could explain the leaving reason objectively in the ESC upon the request of the employee. This article lists a right granted to the employee, instead of prohibits the employer to list other contents in an ESC. Therefore, there are disputes on the contents of an ESC. In practice, if an employer has listed any negative words as the leaving reason in an ESC, e.g. the employee has seriously violated the employer’s rules and procedures, the employee normally would require the employer to delete such words, and issue a new ESC without those negative words. Some employees even file a lawsuit against the employer for the infringement of reputation rights.

In the judicial practice, there are different judgments on such disputes; even the same court might have made different judgments. Currently, the main judicial opinion is that an employer could list the leaving reason, no matter negative or positive, if the leaving reason has not violated any mandatory provisions of laws and regulations. For example, (2016) Su 05 Min Zhong No.2112, (2014) Yu Zhongmin Yi Zhong Zi No. 00184, (2014) Sanzhong Min Zhong Zi No. 08089, (2018) Xiang 01 Min Zhong No.6931, and etc.. The other judicial opinion is that Article 24 of the “Regulations” has listed all the contents which shall be listed in an ESC, so the employer shall not add any other words, such as the leaving reason, or any descriptions related to the capability or conduct of the employee, such as (2018) Su 01 Min Zhong No. 6614 and etc..

An interesting phenomenon is that Guangzhou Intermediate People’s Court had made different judgments on similar cases in 2017 and 2018. In the cases, (2017) Yue 01 Min Zhong No.9269 and (2018) Yue 01 Min Zhong No.10232, the court held that the content of the ESC had not violated the relevant laws and regulations, and the public ethic. However, in the case (2017) Guangdong 01 Min Zhong No. 8669, the court held that the employer had listed some contents other than the contents stipulated in Article 24 of the “Regulations”, and ordered the employer to re-issue a new ESC.

In summary, there are still disputes in judicial practice on whether an ESC could list the leaving reason, especially such reason is negative.

From the perspective of an employer, in order to reduce risks, it is recommended to issue an ESC strictly in accordance with Article 24 of the “Regulations”.