Not all employment terminations, even if unfair, constitute a wrongful termination under the Guangzhou law. In Guangzhou, wrongful termination is often difficult to prove because absent a written employment contract to the contrary, the employer-employee relationship is presumed to be fixed term, not "at-will". An "at will" employment relationship basically means that both the employer and the employee can terminate the employment relationship at any time and for any reason (with or without cause) so long as it is not an illegal reason (e.g. discrimination or retaliation).
In Guangzhou, an employee may bring a successful lawsuit claiming he or she was "wrongfully terminated" if the employee can prove the termination:
1.was in breach of a written contract (offer of employment, employment agreement or employee policy);
2.was in breach of an oral promise or reassurance of continued employment;
3.violates public policy (e.g. retaliatory discharge); or
4.violates a specific state or federal statute (e.g. discrimination - the termination was related to the employee's national origin, race, religion, age, disability, family or marital status, pregnancy, gender, or sexual orientation).
Retaliatory Discharge Equals Wrongful Termination.
Retaliatory discharge laws protect employees who are in an untenable situation, or who report unlawful or unsafe working conditions or other illegal behavior engaged in by the employer (Whistleblowing). An employee may bring a legitimate lawsuit for wrongful termination if the employee can prove the employer terminated the employee because the employee:
• filed or participated in a wage claim, discrimination claim, harassment claim, workers compensation claim, unemployment compensation proceeding, employment proceeding, or complaint with the Labor Commissioner;
• became subject to a single wage garnishment, child support order, or jury duty;
• exercised his or her right to vote, to take family medical leave, to review their personnel file, or to other benefits;
• reported an illegal or unsafe workplace activity, or refused to perform dangerous work;
• refused to commit an illegal act (e.g. perjury) ; or
• performed a public obligation (jury duty).
Constructive Wrongful Termination.
Constructive wrongful termination occurs when the employee is not fired but quits because the conditions in the workplace have become so intolerable that the employee was effectively forced to leave. When any reasonable person would no longer be able to tolerate the workplace environment, then a person may quit and still seek damages for their lost wages.
This does not mean an employee can quit and sue after a simple incident of harassment or because some condition is less than perfect. Employees are expected to first use all of the available reporting mechanisms made available by their employer to at least attempt to resolve their employment issues before quitting. Failure to try and fix the situation before quitting will probably prevent an employee from recovering damages if a lawsuit is later commenced. If an employee has complained, requested relief, and nothing changes or actually escalates, then the employee may quit and still seek compensation for lost wages. All complaints and efforts to get relief from the conduct should be well documented.
Before terminating an Employee, the Employer Should Take Certain Precautions.
1. Address an employee's poor performance. Although an employer does not need to institute a progressive system of discipline, an employer should conduct a performance evaluation, explain what the employee needs to improve, and provide guidance on how performance can be improved.
2. Implement Standard Termination Procedures. Every employer should require exiting employees, whether they quit or are terminated, to go through an exit interview during which the employer can: (1) set forth the reasons the employee is being terminated, (2) arrange for the return of company property; (3) inform the employee about any continuing obligations the employee may have (e.g. confidentiality); (4) get the employee's immediate response to various questions that will be helpful in the event the employee later decides to sue; and if applicable (5) present the employee with a severance pay package in exchange for the employee's agreement not to sue.
3. Consider a Severance Pay Package. Although employers are not required to provide severance pay, even to long term employees, a severance pay package can be a useful tool in reducing the risk of an employee lawsuit. Even if the employer crosses evey T and dots every I, the employer still may find him or herself taking a trip through the judicial system.
4. Final Paycheck. As soon as the exit interview is complete, the employer should also remit payment of the employee's final paycheck. If the employee provided notice, or if you are terminating the employee, the final paycheck is due immediately. If the employee quits with no notice, the final paycheck must be remitted within 72 hours.