Employment Termination: The Right Way
The client company is operating in the food and beverage industry in China. The company wanted to terminate the contract with an employee. HROne helped to mitigate the risks of doing that in a non-compliant way.
Before diving into the case study, we want to briefly explain the main reasons for an employer to terminate an employment contract.
There are three main reasons why an employer wishes to terminate the employment relationship of its employee:
- Termination due to operational reasons. For example, insolvency of the employer and/or merger of companies that can result in job losses.
- Termination due to personal reasons. This is the case, for example, when the employee is unable, due to personal reasons, to provide the service guaranteed under the employment contract.
- Termination due to behavior. This is the case when the employee seriously violates the employment contract. For example, violation of company policy, misappropriation of equipment, criminal offense, etc.
The situation for the client company was not directly related to the reasons explained. What happened is that the employee of the client company did not go to the office for one day and did not apply for leave. For this reason, the client wanted to immediately terminate the employment contract with the employee.
We explained to the client that being absent for one day without application for leave does not allow the company to immediately terminate the contract.
We suggested to the company to first try to get in contact with the employee by email, phone call, or through friends or relatives to make sure that nothing serious happened to the employee.
After few days, the company managed to get in contact with the employee and made sure that everything was ok.
The employee and the employer then started to negotiate the terms for the termination of the contract and we offered help to prepare the termination agreement.
The CEO of the client company was very satisfied with our service because they avoided potential risks with the employee and a labor dispute that could make the company lose money and time.