Viewpoint | Research (III) on Disputes over Year-end Awards
Published:
2022-12-16
The "Fair and Reasonable" Principle of (II) Year-end Bonus If the labor contract, rules and regulations and other written documents do not stipulate the year-end bonus or the agreement is invalid, when the employer should issue the year-end bonus, the worker may make a claim based on the principle of equal pay for equal work. If the employer decides not to issue the year-end bonus, it should provide evidence that the worker does not meet the conditions for the year-end bonus, such as the worker's unqualified assessment, failure to meet the performance requirements, the employer's failure to make a profit, the worker's violation of rules and regulations, and violation of labor discipline. Based on the principle of fairness and reasonableness, the distribution of year-end awards usually has the following manifestations. (1) If the employer fails to assess the labor contract due to the illegal termination of the labor contract, the year-end bonus shall still be paid. If it is agreed or stipulated that the year-end bonus shall be paid according to the assessment, if the laborer is unable to participate in the assessment due to the employer's reasons, such as the illegal termination of the labor contract, the employer shall bear the adverse consequences of the non-assessment, and the year-end bonus shall be issued in combination with the assessment in previous years. Shanghai No. 1 Intermediate People's Court (2015) Shanghai No. 1 Zhongmin San (Min) Zhongyu No. 283 Civil Judgment held: First, the court found that the termination of the labor contract of a certain mall did not comply with the law. Secondly, the work assessment and incentive method of the mall stipulates the distribution and standard of the year-end bonus. The mall distributed the year-end bonus to Wang moubin in 2012 and 2013. Now the mall has terminated the labor contract between the two parties ahead of schedule, which makes Wang moubin unable to participate in the year-end assessment. the responsibility shall be borne by the mall. referring to Wang moubin's year-end bonus in 2013 to convert his year-end bonus from January 1 to March 21, 2014, the year-end bonus amount is 3717.21 yuan. (2) If the year-end bonus is not issued on the grounds that the employer is not profitable in the current year, the employer shall provide corresponding evidence The employer may agree or stipulate that no year-end bonus shall be paid to the worker if there is no profit or loss in the current year. In the event of a dispute, if the employer claims a loss but does not issue a year-end bonus, it is required to provide financial audit reports and other evidence that can prove that the current year did not make a profit or even a loss. However, if the worker can provide evidence that the employer has publicly announced the profitability of the current year, the court is likely to accept the evidence against the employer and award the year-end bonus. Shanghai No.1 Intermediate People's Court (2014) Hu Yi Zhong Min San (Min) Zhong Zi No. 1750 Civil Judgment held that according to the facts that have been ascertained, although the 2012 annual audit report issued by an accounting firm in Shanghai recorded a net profit of -4091764.77 yuan, the 2012 net profit announced by a company was 5042500 yuan. A company claims that the audit caliber is different, so the results are different, the claim lacks legal basis, the original court did not accept. Because a company did not give a reasonable explanation to the two diametrically opposed audit results, the original court accepted the unfavorable audit results and determined that it had made a profit in 2012. A company claimed that it had a serious loss in 2012, and the original court did not accept it. (3) The conditions for the payment of the year-end bonus have been agreed. Although the conditions have not been met, the employer may still have to pay the year-end bonus in proportion. If it is agreed or stipulated that the year-end bonus will not be paid for mid-year entry and mid-year resignation, the court will usually not support the workers' request for year-end bonus according to the principle of "agreement priority" for year-end bonus. Shanghai No. 2 Intermediate People's Court (2014) Hu Er Zhong Min San (Min) Zhong Yu No. 761 Civil Judgment holds that the employer has the ability to determine the internal salary, welfare distribution method and distribution according to the production and operation characteristics and economic benefits of the unit. According to the regulations of a company, Lu Moumei has resigned before the end of the year and does not meet the conditions for receiving the year-end bonus, the court did not support Lu's year-end bonus claim. However, there is another view in judicial trials. Even if the contract or regulations stipulate that the year-end bonus will not be paid for mid-year entry and mid-year resignation, the employer should still be based on the principle of equal pay for equal work. Pay the employee the year-end bonus in proportion. In fact, if the payment of year-end bonus is only related to attendance time, it is more reasonable to convert the payment according to the proportion of attendance time. (4) The year-end bonus shall not be paid on the grounds of the conditions stipulated in the rules and regulations, and the rules and regulations shall be democratically publicized The conditions and standards for the payment of year-end bonuses are usually stipulated by the labor contract or rules and regulations. Whether the current labor contract stipulates the conditions and standards for the payment of year-end bonuses and year-end bonuses is usually easy to determine, but the formulation and adoption of rules and regulations have their particularities. When claiming whether to issue year-end bonuses based on rules and regulations, the rules and regulations should first be proved to be legal and effective. According to Article 4 of the Labor Contract Law, labor rules and regulations shall be discussed by the workers' congress or all employees, and determined through equal consultation with the trade union or employee representatives. The employing unit shall publicize the rules and regulations and decisions on major matters that directly involve the vital interests of the workers, or inform the workers. Therefore, if the application of rules and regulations is advocated as the basis for the distribution of year-end awards, it should first be proved that the rules and regulations have been formulated through democratic procedures and have been publicized or informed to the relevant workers, otherwise they will not be the basis for distribution. Shanghai No.1 Intermediate People's Court (2014) Shanghai No.1 Zhongmin San (Min) Zhongzi No.1750 Civil Judgment held that the salary management system and performance appraisal system provided by a company have no evidence to prove that they have been formulated through democratic procedures and have been publicized or informed to workers including Zhang, and cannot be used as the basis for deciding to issue Zhang's year-end performance bonus. (5) The agreed conditions for the payment of year-end awards shall be legal and valid. Although the conditions for the payment of year-end bonuses can be agreed or stipulated in advance, if the agreed payment conditions are unreasonable or do not comply with the law, they may be deemed invalid by the court. Shanghai Second Intermediate People's Court (2015) Shanghai Second Intermediate People's Court () Shanghai Second Intermediate People's Court (Min) Zhong Zi No. 74 Civil Judgment held that: Regarding the payment of the year-end bonus, the labor contract signed by a company and Zhou Mouming clearly stipulated the year-end bonus. The calculation method, both parties should perform according to the contract. A company believes that according to the relevant provisions of the Company Law, the company's profits should be calculated after making up for the losses and withdrawing the statutory provident fund. During Zhou Mouming's tenure as general manager, the company suffered an overall loss, so Zhou Mouming's year-end bonus should not be issued. The Court believes that the provisions of the Company Law on the withdrawal of statutory provident funds involve the distribution of shareholders' profits, the year-end bonus in this case belongs to the scope of labor remuneration of workers, the two are not the same nature of legal relations, so a company's claim, the Court does not adopt. Therefore, whether the year-end bonus is paid or not generally depends on whether the employer and the worker have agreed on this or whether there are such provisions in the rules and regulations. Once the labor contract stipulates or the rules and regulations stipulate the conditions and standards for the payment of year-end awards, the employer shall issue them in accordance with the regulations. Without justifiable reasons, the year-end bonus shall not be refused, nor shall the year-end bonus be refused under conditions not agreed or stipulated in advance. In practice, employers and workers may have a variety of different agreements or regulations on year-end bonuses, but if employers can well follow the two principles of agreement priority and fairness and reasonableness, they can not only give full play to the employer's operational autonomy, safeguard the legitimate rights and interests of workers, but also play a role in mobilizing the enthusiasm of workers.
The "Fair and Reasonable" Principle of (II) Year-end Bonus
If the labor contract, rules and regulations and other written documents do not stipulate the year-end bonus or the agreement is invalid, when the employer should issue the year-end bonus, the worker may make a claim based on the principle of equal pay for equal work. If the employer decides not to issue the year-end bonus, it should provide evidence that the worker does not meet the conditions for the year-end bonus, such as the worker's unqualified assessment, failure to meet the performance requirements, the employer's failure to make a profit, the worker's violation of rules and regulations, and violation of labor discipline. Based on the principle of fairness and reasonableness, the distribution of year-end awards usually has the following manifestations.
(1) If the employer fails to assess the labor contract due to the illegal termination of the labor contract, the year-end bonus shall still be paid.
If it is agreed or stipulated that the year-end bonus shall be paid according to the assessment, if the laborer is unable to participate in the assessment due to the employer's reasons, such as the illegal termination of the labor contract, the employer shall bear the adverse consequences of the non-assessment, and the year-end bonus shall be issued in combination with the assessment in previous years. Shanghai No. 1 Intermediate People's Court (2015) Shanghai No. 1 Zhongmin San (Min) Zhongyu No. 283 Civil Judgment held: First, the court found that the termination of the labor contract of a certain mall did not comply with the law. Secondly, the work assessment and incentive method of the mall stipulates the distribution and standard of the year-end bonus. The mall distributed the year-end bonus to Wang moubin in 2012 and 2013. Now the mall has terminated the labor contract between the two parties ahead of schedule, which makes Wang moubin unable to participate in the year-end assessment. the responsibility shall be borne by the mall. referring to Wang moubin's year-end bonus in 2013 to convert his year-end bonus from January 1 to March 21, 2014, the year-end bonus amount is 3717.21 yuan.
(2) If the year-end bonus is not issued on the grounds that the employer is not profitable in the current year, the employer shall provide corresponding evidence
The employer may agree or stipulate that no year-end bonus shall be paid to the worker if there is no profit or loss in the current year. In the event of a dispute, if the employer claims a loss but does not issue a year-end bonus, it is required to provide financial audit reports and other evidence that can prove that the current year did not make a profit or even a loss. However, if the worker can provide evidence that the employer has publicly announced the profitability of the current year, the court is likely to accept the evidence against the employer and award the year-end bonus. Shanghai No.1 Intermediate People's Court (2014) Hu Yi Zhong Min San (Min) Zhong Zi No. 1750 Civil Judgment held that according to the facts that have been ascertained, although the 2012 annual audit report issued by an accounting firm in Shanghai recorded a net profit of -4091764.77 yuan, the 2012 net profit announced by a company was 5042500 yuan. A company claims that the audit caliber is different, so the results are different, the claim lacks legal basis, the original court did not accept. Because a company did not give a reasonable explanation to the two diametrically opposed audit results, the original court accepted the unfavorable audit results and determined that it had made a profit in 2012. A company claimed that it had a serious loss in 2012, and the original court did not accept it.
(3) The conditions for the payment of the year-end bonus have been agreed. Although the conditions have not been met, the employer may still have to pay the year-end bonus in proportion.
If it is agreed or stipulated that the year-end bonus will not be paid for mid-year entry and mid-year resignation, the court will usually not support the workers' request for year-end bonus according to the principle of "agreement priority" for year-end bonus. Shanghai No. 2 Intermediate People's Court (2014) Hu Er Zhong Min San (Min) Zhong Yu No. 761 Civil Judgment holds that the employer has the ability to determine the internal salary, welfare distribution method and distribution according to the production and operation characteristics and economic benefits of the unit. According to the regulations of a company, Lu Moumei has resigned before the end of the year and does not meet the conditions for receiving the year-end bonus, the court did not support Lu's year-end bonus claim. However, there is another view in judicial trials. Even if the contract or regulations stipulate that the year-end bonus will not be paid for mid-year entry and mid-year resignation, the employer should still be based on the principle of equal pay for equal work. Pay the employee the year-end bonus in proportion. In fact, if the payment of year-end bonus is only related to attendance time, it is more reasonable to convert the payment according to the proportion of attendance time.
(4) The year-end bonus shall not be paid on the grounds of the conditions stipulated in the rules and regulations, and the rules and regulations shall be democratically publicized
The conditions and standards for the payment of year-end bonuses are usually stipulated by the labor contract or rules and regulations. Whether the current labor contract stipulates the conditions and standards for the payment of year-end bonuses and year-end bonuses is usually easy to determine, but the formulation and adoption of rules and regulations have their particularities. When claiming whether to issue year-end bonuses based on rules and regulations, the rules and regulations should first be proved to be legal and effective. According to Article 4 of the Labor Contract Law, labor rules and regulations shall be discussed by the workers' congress or all employees, and determined through equal consultation with the trade union or employee representatives. The employing unit shall publicize the rules and regulations and decisions on major matters that directly involve the vital interests of the workers, or inform the workers. Therefore, if the application of rules and regulations is advocated as the basis for the distribution of year-end awards, it should first be proved that the rules and regulations have been formulated through democratic procedures and have been publicized or informed to the relevant workers, otherwise they will not be the basis for distribution. Shanghai No.1 Intermediate People's Court (2014) Shanghai No.1 Zhongmin San (Min) Zhongzi No.1750 Civil Judgment held that the salary management system and performance appraisal system provided by a company have no evidence to prove that they have been formulated through democratic procedures and have been publicized or informed to workers including Zhang, and cannot be used as the basis for deciding to issue Zhang's year-end performance bonus.
(5) The agreed conditions for the payment of year-end awards shall be legal and valid.
Although the conditions for the payment of year-end bonuses can be agreed or stipulated in advance, if the agreed payment conditions are unreasonable or do not comply with the law, they may be deemed invalid by the court. Shanghai Second Intermediate People's Court (2015) Shanghai Second Intermediate People's Court () Shanghai Second Intermediate People's Court (Min) Zhong Zi No. 74 Civil Judgment held that: Regarding the payment of the year-end bonus, the labor contract signed by a company and Zhou Mouming clearly stipulated the year-end bonus. The calculation method, both parties should perform according to the contract. A company believes that according to the relevant provisions of the Company Law, the company's profits should be calculated after making up for the losses and withdrawing the statutory provident fund. During Zhou Mouming's tenure as general manager, the company suffered an overall loss, so Zhou Mouming's year-end bonus should not be issued. The Court believes that the provisions of the Company Law on the withdrawal of statutory provident funds involve the distribution of shareholders' profits, the year-end bonus in this case belongs to the scope of labor remuneration of workers, the two are not the same nature of legal relations, so a company's claim, the Court does not adopt. Therefore, whether the year-end bonus is paid or not generally depends on whether the employer and the worker have agreed on this or whether there are such provisions in the rules and regulations. Once the labor contract stipulates or the rules and regulations stipulate the conditions and standards for the payment of year-end awards, the employer shall issue them in accordance with the regulations. Without justifiable reasons, the year-end bonus shall not be refused, nor shall the year-end bonus be refused under conditions not agreed or stipulated in advance. In practice, employers and workers may have a variety of different agreements or regulations on year-end bonuses, but if employers can well follow the two principles of agreement priority and fairness and reasonableness, they can not only give full play to the employer's operational autonomy, safeguard the legitimate rights and interests of workers, but also play a role in mobilizing the enthusiasm of workers.
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