Viewpoint... Legal analysis of the breach of contract clause of the employment agreement for college graduates.
Published:
2022-08-12
The employment agreement is an employment intention contract for graduates to work in the employer after graduation, and its nature is an appointment contract; the liquidated damages clause stipulated in the employment agreement is legal and valid; if the agreed liquidated damages are excessively higher than the losses caused, the graduate may request the arbitration institution Or the people's court to reduce it. 1 The legal nature of the employment agreement The employment agreement (also known as the "tripartite agreement") is a written agreement signed by fresh graduates of ordinary higher education institutions, recruiters and graduate institutions. As for the nature of the employment agreement, there are different views in the theoretical circles and different understandings in judicial practice. 1, civil contract said: from the employment agreement signed time, content and the legal status of the parties reflected in the employment agreement, the employment agreement is a general civil contract. (Relevant case: Cheng Li v. BYD Co., Ltd. and others for the return of liquidated damages) 2. The appointment contract said: The employment agreement is a preliminary agreement between the graduates, the school and the employing unit on the graduates' future employment intention. It is the employment of the graduates with time limit and conditions attached to the employing unit (relevant cases: Yu Sulan and Fujian Electric Power Co., Ltd. applied for labor dispute retrial) 3. The labor contract says: The employment agreement is a special form of the labor contract. The nature of the employment agreement and the labor contract is consistent, and its subject meaning and legal basis are also consistent. The "Labor Contract Law" should be applied. (Relevant case: Li Moumou v. Tianjin College Personnel Dispute) 4. Non-contract theory: The employment agreement is a product of the transition period of the employment market with Chinese characteristics. In nature, it is neither an agreement in public law, nor a contract in private law, nor a labor contract. Strictly speaking, this kind of tripartite agreement It adds the content of public power intervention on the basis of "private" autonomy. This paper holds that from the point of view of the signing process of the employment agreement, the function of the employment agreement lies in the proof role of the school reporting employment plan, the employer's declaration of entry indicators, etc., with a certain administrative function color, does not have the equality of the subject and the freedom of will, and runs counter to the basic spirit of civil contract. From the content of the agreement, most of the employment agreements in colleges and universities are relatively simple and general, and it is true that the legal provisions of the Labor Contract Law are necessary, so it is more appropriate to adopt the "appointment contract theory" in its legal nature. 2 The validity of the penalty clause in the employment agreement. 1. The liquidated damages clause is legal and valid. The reason why the employment agreement can agree on liquidated damages is that both employers and graduates spend a lot of costs in recruitment or job hunting. This reduces the utility of a tripartite employment agreement if one party defaults recklessly without penalty. The liability for breach of contract stipulated in the employment agreement is not limited by Article 25 of the the People's Republic of China Labor Contract Law. As long as there is no invalid situation in the Civil Code, that is, the parties' full capacity for civil conduct means true and the content does not violate the mandatory provisions of laws and administrative regulations, and does not violate public order and good customs, the liability clause for breach of contract should be valid. Article 495, paragraph 2, of the Civil Code stipulates that "if one of the parties fails to perform the obligation to conclude the contract under the appointment contract, the other party may request it to bear the liability for breach of the appointment contract". The employment agreement has legal effect on both the graduate and the employer. Regardless of any party's breach of contract, it shall be liable for breach of contract. 2. The liquidated damages clause follows the following principles: One is the principle of fairness. The Civil Code provides for the principle of fairness in civil contracts. However, in practice, many employers take advantage of their advantageous position in recruitment to only agree that graduates violate or terminate the liability for breach of contract of the tripartite employment agreement, and do not agree on the liability for breach of contract of the employer, which is obviously unfair. The second is the principle that liquidated damages are equivalent to losses. Article 584 of the Civil Code stipulates: "If one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not comply with the agreement, causing losses to the other party, the amount of compensation for the loss shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract, However, it shall not exceed the losses that may be caused by the breach of contract that were foreseen or should be foreseen when the party entered into the contract." Article 585 of the law further stipulates: "if the agreed liquidated damages are lower than the losses caused, the parties may request the people's court or arbitration institution to increase them; if the agreed liquidated damages are excessively higher than the losses caused, the parties may request the people's court or arbitration institution to reduce them appropriately." According to the above provisions, the standard of liquidated damages should be determined according to the loss caused by one party's breach of contract to the other party. If it is abnormally high or abnormally low, adjustments can be made after disputes arise. How to determine that the liquidated damages are excessively higher than the loss? "If the liquidated damages agreed by the parties exceed the 30% of the loss caused, it can generally be determined as 'excessively higher than the loss caused '". 3 Reduction of liquidated damages provisions in employment agreements The employer will take into account the deterrent effect of the clause when setting the liability clause for breach of contract, so it will set a higher standard of liquidated damages, but it is still possible for the adjudicator to adjust the liquidated damages according to the principle of fairness, taking into account the consequences of the graduate's breach of contract, the employer's loss, the economic level, the post salary and other factors. Reference Case:(2021) Beijing 0102 Minchu No. 35066 The original and the defendant signed the Employment Agreement for Graduates of Domestic Colleges and Universities of an Airport Co., Ltd., stipulating that the defendant will work in the plaintiff's company after graduation. If the defendant fails to sign a tripartite agreement with the plaintiff before March 31, 2020 due to reasons attributable to the defendant, it will be deemed as a breach of contract, and the defendant shall pay liquidated damages of 50000 yuan to the plaintiff. The party proposing to terminate the agreement shall pay liquidated damages of 50000 yuan to the other party. The court held that in this case, according to the facts found out, although the plaintiff failed to produce sufficient evidence to prove that its actual loss had reached or exceeded 50000 yuan, the existing evidence could still show that the plaintiff did bear certain human and material costs for recruiting the defendant, and the plaintiff would inevitably incur actual losses if the defendant did not agree to join the company for its own reasons. Since the plaintiff failed to prove the specific amount of the actual loss and the defendant applied for a reduction in liquidated damages, the court determined the amount of liquidated damages to be borne by the defendant to be 20000 yuan in combination with factors such as the contract agreement, actual performance and fault degree of both parties, especially the situation shortly after the defendant's graduation. Due to the outbreak, most of the last 2 years of school recruitment online, the cost of online recruitment by employers is significantly lower than the cost of on-site recruitment. If the liquidated damages charged by the employer for online recruitment are the same as or even more than the liquidated damages charged for on-site recruitment, job-seeking students can consider whether the liquidated damages are excessively higher than the losses caused. 4 Employment Agreement Signing Risk Tips and Suggestions Both signing and settlement contracts should be carefully considered. When graduates and employers sign employment agreements, they should pay attention to the following points: 1. Determine the regularity of the recruitment unit, verify the authenticity and social reputation of the company in many ways, and avoid being deceived. 2, the specific content should be agreed clearly. If the employment agreement is to stipulate liquidated damages, please write clearly the amount, not the vague "economic loss" or "to be determined". If the unit clearly indicates that there is no liquidated damages, please also indicate or cross out the blank of liquidated damages, and the same applies to other blanks. 3. Please clarify the relevant contents with the employer before signing the contract, and sign after careful consideration. Keep the corresponding evidence to avoid disputes arising from the discrepancy between the written content and the negotiation. 4. Please be careful before signing the contract. Please keep your promise after signing the contract.
The employment agreement is an employment intention contract for graduates to work in the employer after graduation, and its nature is an appointment contract; the liquidated damages clause stipulated in the employment agreement is legal and valid; if the agreed liquidated damages are excessively higher than the losses caused, the graduate may request the arbitration institution Or the people's court to reduce it.
1
The legal nature of the employment agreement
The employment agreement (also known as the "tripartite agreement") is a written agreement signed by fresh graduates of ordinary higher education institutions, recruiters and graduate institutions. As for the nature of the employment agreement, there are different views in the theoretical circles and different understandings in judicial practice.
1. The civil contract says:In terms of the time and content of the employment agreement and the legal status of the parties embodied in it, the employment agreement is a general civil contract. (Relevant case: Cheng Li v. BYD Co., Ltd. and others for the return of liquidated damages)
2. The reservation contract says:The employment agreement is a preliminary agreement among graduates, schools and employers on the future employment intention of graduates. It is the employment of graduates with time limit and conditions (relevant cases: Yu Sulan and Fujian Electric Power Co., Ltd. applied for labor dispute retrial)
3. The labor contract says:Employment agreement is a special form of labor contract, the nature of employment agreement and labor contract is consistent, its subject meaning and legal basis is also consistent, should apply the "labor contract law". (Relevant case: Li Moumou v. Tianjin College Personnel Dispute)
4, non-contract said:The employment agreement is a product of the transition period of the employment market with Chinese characteristics. In nature, it is neither an agreement in public law, nor a contract in private law, nor a labor contract. Strictly speaking, this kind of tripartite agreement is based on the autonomy of the'private' meaning. The content of public power intervention is added on the basis of autonomy.
This paper holds that from the point of view of the signing process of the employment agreement, the function of the employment agreement lies in the proof role of the school reporting employment plan, the employer's declaration of entry indicators, etc., with a certain administrative function color, does not have the equality of the subject and the freedom of will, and runs counter to the basic spirit of civil contract. From the content of the agreement, most of the employment agreements in colleges and universities are relatively simple and general, and it is true that the legal provisions of the Labor Contract Law are necessary, so it is more appropriate to adopt the "appointment contract theory" in its legal nature.
2
The validity of the penalty clause in the employment agreement.
1. The liquidated damages clause is legal and valid.
The reason why the employment agreement can agree on liquidated damages is that both employers and graduates spend a lot of costs in recruitment or job hunting. This reduces the utility of a tripartite employment agreement if one party defaults recklessly without penalty. The liability for breach of contract stipulated in the employment agreement is not limited by Article 25 of the the People's Republic of China Labor Contract Law. As long as there is no invalid situation in the Civil Code, that is, the parties' full capacity for civil conduct means true and the content does not violate the mandatory provisions of laws and administrative regulations, and does not violate public order and good customs, the liability clause for breach of contract should be valid.
Article 495, paragraph 2, of the Civil Code stipulates that "if one of the parties fails to perform the obligation to conclude the contract under the appointment contract, the other party may request it to bear the liability for breach of the appointment contract". The employment agreement has legal effect on both the graduate and the employer. Regardless of any party's breach of contract, it shall be liable for breach of contract.
2. The liquidated damages clause follows the following principles:
One is the principle of fairness.The Civil Code provides for the principle of fairness in civil contracts. However, in practice, many employers take advantage of their advantageous position in recruitment to only agree that graduates violate or terminate the liability for breach of contract of the tripartite employment agreement, and do not agree on the liability for breach of contract of the employer, which is obviously unfair.
The second is the principle that liquidated damages are equivalent to losses.Article 584 of the Civil Code stipulates: "If one of the parties fails to perform its contractual obligations or the performance of its contractual obligations does not comply with the agreement, causing losses to the other party, the amount of compensation for the loss shall be equivalent to the losses caused by the breach of contract, including the benefits that can be obtained after the performance of the contract, However, it shall not exceed the losses that may be caused by the breach of contract that were foreseen or should be foreseen when the party entered into the contract." Article 585 of the law further stipulates: "if the agreed liquidated damages are lower than the losses caused, the parties may request the people's court or arbitration institution to increase them; if the agreed liquidated damages are excessively higher than the losses caused, the parties may request the people's court or arbitration institution to reduce them appropriately." According to the above provisions, the standard of liquidated damages should be determined according to the loss caused by one party's breach of contract to the other party. If it is abnormally high or abnormally low, adjustments can be made after disputes arise.
How to determine that the liquidated damages are excessively higher than the loss? "If the liquidated damages agreed by the parties exceed the 30% of the loss caused, it can generally be determined as 'excessively higher than the loss caused '".
3
Reduction of liquidated damages provisions in employment agreements
The employer will take into account the deterrent effect of the clause when setting the liability clause for breach of contract, so it will set a higher standard of liquidated damages, but it is still possible for the adjudicator to adjust the liquidated damages according to the principle of fairness, taking into account the consequences of the graduate's breach of contract, the employer's loss, the economic level, the post salary and other factors.
Reference Case:(2021) Beijing 0102 Minchu No. 35066
The original and the defendant signed the Employment Agreement for Graduates of Domestic Colleges and Universities of an Airport Co., Ltd., stipulating that the defendant will work in the plaintiff's company after graduation. If the defendant fails to sign a tripartite agreement with the plaintiff before March 31, 2020 due to reasons attributable to the defendant, it will be deemed as a breach of contract, and the defendant shall pay liquidated damages of 50000 yuan to the plaintiff. The party proposing to terminate the agreement shall pay liquidated damages of 50000 yuan to the other party.
The court held that in this case, according to the facts found out, although the plaintiff failed to produce sufficient evidence to prove that its actual loss had reached or exceeded 50000 yuan, the existing evidence could still show that the plaintiff did bear certain human and material costs for recruiting the defendant, and the plaintiff would inevitably incur actual losses if the defendant did not agree to join the company for its own reasons. Since the plaintiff failed to prove the specific amount of the actual loss and the defendant applied for a reduction in liquidated damages, the court determined the amount of liquidated damages to be borne by the defendant to be 20000 yuan in combination with factors such as the contract agreement, actual performance and fault degree of both parties, especially the situation shortly after the defendant's graduation.
Due to the outbreak, most of the last 2 years of school recruitment online, the cost of online recruitment by employers is significantly lower than the cost of on-site recruitment. If the liquidated damages charged by the employer for online recruitment are the same as or even more than the liquidated damages charged for on-site recruitment, job-seeking students can consider whether the liquidated damages are excessively higher than the losses caused.
4
Employment Agreement Signing Risk Tips and Suggestions
Both signing and settlement contracts should be carefully considered. When graduates and employers sign employment agreements, they should pay attention to the following points:
1. Determine the regularity of the recruitment unit, verify the authenticity and social reputation of the company in many ways, and avoid being deceived.
2, the specific content should be agreed clearly. If the employment agreement is to stipulate liquidated damages, please write clearly the amount, not the vague "economic loss" or "to be determined". If the unit clearly indicates that there is no liquidated damages, please also indicate or cross out the blank of liquidated damages, and the same applies to other blanks.
3. Please clarify the relevant contents with the employer before signing the contract, and sign after careful consideration. Keep the corresponding evidence to avoid disputes arising from the discrepancy between the written content and the negotiation.
4. Please be careful before signing the contract. Please keep your promise after signing the contract.
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