1. The employee unilaterally terminates at any time

The clothing company has been in arrears with Mr. Liang's salary for 3 consecutive months on the grounds of financial difficulties. Mr. Liang then sent a written notice of termination of the labor contract to the company on the grounds that the company failed to pay labor remuneration in a timely and full manner. In this case, Mr. Liang may claim economic compensation for the termination of the labor contract from the company. If Mr. Liang claims damages for illegal termination of the labor contract, he will not be supported.

Subject of termination: Employee

Conditions for establishment:

Article 38 of the Labor Contract Law An employee may terminate the labor contract if the employer has any of the following circumstances:

(1) Failure to provide labor protection or labor conditions as agreed in the labor contract;

(2) Failure to pay labor remuneration in a timely and full manner;

(3) Failure to pay social insurance premiums for employees in accordance with the law;

(4) The rules and regulations of the employer violate the provisions of laws and regulations and damage the rights and interests of employees;

(5) The labor contract is invalid due to the circumstances stipulated in paragraph 1 of Article 26 of this Law;

(6) Other circumstances in which employees may terminate the labor contract as stipulated by laws and administrative regulations.

If an employer forces an employee to work by means of violence, threats or illegal restrictions on personal freedom, or if the employer violates regulations, orders or forces employees to engage in dangerous operations that endanger the personal safety of the employee, the employee may immediately terminate the labor contract without prior notice to the employer.

Article 46 Under any of the following circumstances, the employer shall pay economic compensation to the employee:

(1) The employee terminates the labor contract in accordance with Article 38 of this Law;

Legal effect: The employer pays compensation

2. The employee unilaterally gives advance notice of termination

If the employer has any of the circumstances stipulated in Article 38 of the Labor Contract Law, the employee may propose to terminate the labor contract and require the employer to pay economic compensation for the termination of the labor contract. Otherwise, if the employee unilaterally proposes to terminate the labor contract, he will not be able to obtain economic compensation for the termination of the labor contract.

Subject of termination: Employee

Conditions for establishment:

Article 37 of the Labor Contract Law An employee may terminate the labor contract by notifying the employer in writing thirty days in advance. An employee may terminate the labor contract by notifying the employer three days in advance during the probation period.

Legal effect: The employer does not need to pay compensation or damages

1. Dismissal for fault

During his tenure as the head of the production department, Mr. Liang took advantage of his position to secretly carry a batch of clothing that did not meet the quality standards out of the factory and sold it through a friend. After investigation, the company terminated the labor relationship with Mr. Liang on the grounds that Mr. Liang seriously violated the company's rules and regulations, used his position to seek improper benefits, and caused significant losses to the company. In this case, Mr. Liang will not be able to obtain damages for illegal termination of the labor contract or economic compensation for termination of the labor contract.

Subject of termination: Employer

Conditions for establishment:

Article 39 of the Labor Contract Law 　An employer may terminate the labor contract if an employee has any of the following circumstances:

(1) It is proved during the probation period that he does not meet the employment conditions;

(2) Seriously violating the rules and regulations of the employer;

(3) Serious dereliction of duty, engaging in malpractice for personal gain, causing significant damage to the employer;

(4) The employee establishes a labor relationship with other employers at the same time, which seriously affects the completion of the work tasks of the unit, or refuses to correct it after being raised by the employer;

(5) The labor contract is invalid due to the circumstances stipulated in Item 1 of the first paragraph of Article 26 of this Law;

(6) Being pursued for criminal responsibility in accordance with the law.

Legal effect: The employer does not need to pay compensation or damages

2. No-fault Dismissal

Due to a sharp decrease in orders, the clothing company decided to close its clothing factory in Shanghai. The company negotiated with Mr. Liang to transfer him to the clothing factory in Suzhou to serve as the head of the production department or terminate the labor contract and give him economic compensation of 3 months' salary. Mr. Liang said that he was unwilling to go to Suzhou and did not accept the company's plan to negotiate the termination of the labor contract. The company had no choice but to terminate the labor contract between the two parties. Because the situation when Mr. Liang and the company concluded the labor contract changed due to the reduction of orders, the company terminated the labor contract after failing to reach an agreement with Mr. Liang through negotiation. At this time, Mr. Liang can claim that the company pays economic compensation for the termination of the labor contract. If Mr. Liang requests the company to pay compensation for illegal termination of the labor contract, it will not be supported.

Subject of termination: Employer

Conditions for establishment:

Article 40 of the "Labor Contract Law"   Under any of the following circumstances, the employer may terminate the labor contract after notifying the employee in writing thirty days in advance or paying the employee one month's salary in addition:

(1) The employee is suffering from an illness or non-work-related injury, and is unable to perform the original work or the work arranged by the employer after the expiration of the prescribed medical treatment period;

(2) The employee is incompetent for the job and is still incompetent after training or adjustment of the job position;

(3) The objective circumstances on which the labor contract was based at the time of its conclusion have undergone major changes, making it impossible to perform the labor contract, and the employer and the employee fail to reach an agreement on amending the content of the labor contract through consultation.

Legal effect: The employer pays compensation

3. Economic Redundancy

With the continuous reduction of foreign orders, the clothing company suffered serious losses. The company had a large amount of debts that could not be fulfilled on time. The company's creditors filed an application with the court for bankruptcy reorganization of the clothing company, and the court ruled to start the bankruptcy reorganization procedure. The clothing company then decided to lay off employees, explained the layoff situation to the labor union, listened to the labor union's opinions, and reported to the Human Resources and Social Security Bureau. Mr. Liang later learned that he was on the layoff list. In this case, Mr. Liang can claim that the company pays economic compensation for the termination of the labor contract. If Mr. Liang requests the company to pay compensation for illegal termination of the labor contract, it will not be supported.

Subject of termination: Employer

Conditions for establishment:

Article 41 of the "Labor Contract Law" 　Under any of the following circumstances, if it is necessary to reduce 20 or more employees, or if the number of employees to be reduced is less than 20 but accounts for more than 10% of the total number of employees of the enterprise, the employer shall explain the situation to the labor union or all employees 30 days in advance, listen to the opinions of the labor union or employees, and then report the redundancy plan to the labor administrative department before the employees can be reduced:

(1) Reorganization is carried out in accordance with the provisions of the Enterprise Bankruptcy Law;

(2) Serious difficulties occur in production and operation;

(3) The enterprise changes its production, undergoes major technological innovation, or adjusts its business methods, and still needs to reduce personnel after changing the labor contract;

(4) Other major changes in the objective economic circumstances on which the labor contract was based at the time of its conclusion make it impossible to perform the labor contract.

Article 46   Under any of the following circumstances, the employer shall pay economic compensation to the employee:

(4) The employer terminates the labor contract in accordance with the provisions of the first paragraph of Article 41 of this Law;

Legal effect: The employer pays compensation

4. Illegal Termination

On January 10, 2020, Mr. Liang was hospitalized due to illness. According to the hospital diagnosis, Mr. Liang needs to be treated until March 20. On March 1, the company terminated the labor contract on the grounds that Mr. Liang was unable to perform his job due to health reasons. Because Mr. Liang was ill, the company terminated the labor contract during his medical treatment period, which constituted an illegal termination. Mr. Liang's request for compensation for illegal termination of the labor contract should be supported.

Subject of termination: Employer

Conditions for establishment:

Article 42 of the "Labor Contract Law"  The employer shall not terminate the labor contract in accordance with the provisions of Article 40 and Article 41 of this Law if the employee is under any of the following circumstances:

(1) The employee engaged in occupational disease hazard operations has not undergone an occupational health examination before leaving the job, or is a suspected occupational disease patient during the diagnosis or medical observation period;

(2) Suffering from an occupational disease or work-related injury in this unit and being confirmed to have lost or partially lost the ability to work;

(3) Suffering from an illness or non-work-related injury during the prescribed medical treatment period;

(4) Female employees are in pregnancy, maternity, and lactation periods;

(5) Having worked continuously in this unit for 15 years and being less than 5 years away from the legal retirement age; (6) Other circumstances stipulated by laws and administrative regulations.

It should be noted that, Article 42 of the "Labor Contract Law" is a legal provision that employers shall not unilaterally terminate labor contracts. If the employee meets the above-mentioned circumstances, the employer's termination of the labor contract will constitute an illegal termination. In addition, if the employer cannot provide evidence to prove that its termination behavior complies with the law, or the evidence provided is insufficient to prove that its termination behavior complies with the law, it shall be deemed to constitute an illegal termination. At this time, the employee can claim compensation for illegal termination of the labor contract.

Legal effect: The employer pays compensation