1. The case

Xu applied to enter a technology company and acted as a sales representative. The two parties signed a labor contract, which stipulated a contract period of two years and a probation period of two months. The labor contract only stipulated that Xu’s position would be sales and did not stipulate the specific work content. Before the probation period expired, Xu received a notice from the company to terminate the labor contract. The reason for dismissal was that Xu did not meet the company's employment conditions. Xu believes that it is illegal for the company to terminate the labor contract because the company did not express the specific employment conditions when recruiting him, nor did it introduce the company's recruitment conditions by other means. Thus, Xu filed a labor dispute arbitration and asked the company to continue to perform the labor contract signed by both parties.

Later, the Labor Arbitration Commission held a hearing and found that the company’s unilateral termination is illegal, and the labor contract should continue.

2. Case analysis

The key reasons why the company lost the case was its misunderstanding of the law and its imperfect system. The company did not agree on or stipulated clear employment conditions, and the corresponding supporting system was blank. Therefore, the legal provisions for dismissing employees during the probation period on the grounds of “not meeting the employment conditions” cannot be applied.

The company's termination of the labor contract with employees on the grounds of not meeting the employment conditions during the probation period does not mean that the company can arbitrarily dismiss employees during their probation period. For such dismissal the shall meet the following four requirements: 1. The employer must have clear, legal and reasonable employment conditions, and the employment conditions have been announced to the employees; 2. There is evidence that the employee does not meet the employment conditions; 3. The notice of termination of the labor contract should be made during the probation period; 4. The notice of termination of the labor contract should be delivered to the employee during the probation period.

In this case, if the company clarified and announced the employment conditions and retained the corresponding evidence, then they would not be stuck in a passive situation when it comes to the dismissal of Xu.

3. Legal considerations

In addition to the legal risks mentioned in the above case, that is, the lack of clear employment conditions, there are many legal risks that employers may encounter in the recruitment process, such as employment discrimination, lack of information verification and background investigation systems, and failure to fulfill the obligation to inform. In view of those legal risks, the author recommends that employers take precautions from the following eight points:

3.1 Clear and specific employment conditions

For example, when setting employment conditions, employers must clearly require applicants for their academic qualifications, technical titles, foreign language proficiency, and job performance. Additionally, they can also require applicants to provide proof of compliant social security procedures, of dissolution or termination of labor relations with the previous company, of absence of non-competition relationship, etc. These requirements must be specified as employment conditions, so that the employer can legally terminate the labor contract on the grounds of "not meeting the employment conditions during the probation period" if it is discovered to be untrue. However, the company should pay attention to using lawful and reasonable employment conditions, there must be no illegal factors such as employment discrimination.

3.2 Announce the employment conditions

The employment conditions set by the employer must be made known to employees in a certain way. In practice, there are four main methods:

(a) Clearly stipulated in the labor contract;

(b) Clearly stipulated in the rules and regulations (and meet the democratic procedures and announcement procedures);

(c) recruitment announcements and keeping the corresponding evidence;

(d) sending employment letters and require the employee to sign for confirmation.

3.3 Strengthen recruitment process management

(a) Establish and improve the recruitment system. Employers should establish a legal and reasonable recruitment system before recruiting to prevent legal risks such as employment discrimination.

(b) Standardize recruitment behavior. Companies should conduct systematic training for employees who are responsible and involved in recruitment to regulate their conduct, perfect recruitment-related documents to avoid legal disputes arising from verbal promises, regulate recruitment advertisements, and avoid over-promotion to prevent legal dispute.

(c) Make clear notifications. Employers shall truthfully inform employees of important matters related to the position, such as the job content, working conditions, working location, occupational hazards, safe production preventions, labor remuneration, etc. It is recommended to use a written notification letter for the worker to sign, whose receipt shall be kept by the company.

3.4 Establish and improve information verification and background investigation

(a) Verify the information of candidates. When necessary, the employer shall verify the information provided by the employee with the HR of the original unit, verify the authenticity of the academic qualifications and degrees provided through the public education qualification verification platform, and conduct appropriate background investigations.

(b) Confirm that the applicant has terminated the labor contract with the original unit. When the employer recruits the applicant, the employer may require the applicant to provide a written certificate of the termination of the labor contract with the original unit. The employer may refuse to hire the applicant if the certificate cannot provide.

3.5 Sign compliant labor contracts

(a) Timely sign a written labor contract with the employee. According to Article 14 of the Labor Contract Law, if an employer fails to enter into a written labor contract with an employee for one full year from the date of employment, it shall be deemed that the employer and the employee have entered into an open-term labor contract. Article 82 stipulates that “If an employer fails to conclude a written labor contract with an employee after the lapse of more than one month but less than one year as of the day when it started using him, it shall pay to the worker his monthly wages at double amount…” Therefore, it is recommended that employers sign written labor contracts with employees in a timely manner.

(b) Improve the terms of the labor contract. When designing the terms of the labor contract, the employer and employee shall agree to the necessary provisions of the labor contract such as its terms, information of the employer and the worker, the duration of the labor contract, the content of work, location, working hours, rest and vacation, labor remuneration, social insurance, labor protection, labor conditions, and occupational hazard protection. Furthermore, for management needs, optional clauses can also be agreed on other items such as probation period, training, confidentiality, supplementary insurance and welfare benefits, etc.

3.6 Standardize probation management

(a) The probation period shall be compliant with the law. National laws have strict regulations on the probation period agreement and not being compliant may result in invalid agreement. Article 19 of the Labor Contract Law clearly stipulates that:

“If the term of a labor contract is not less than 3 months but less than 1 year, the probation period shall not exceed one month. If the term of a labor contract is not less than one year but less than 3 years, the probation period shall not exceed 2 months. For a labor contract with a fixed term of 3 years or more or without a fixed term, the probation term shall not exceed 6 months.

An employer can only impose one probation period on an employee.

For a labor contract that sets the completion of a specific task as the term to end the contract or with a fixed term of less than 3 months, no probation period may be stipulated.

The probation period shall be included in the term of a labor contract. If a labor contract only provides the term of probation, the probation shall be null and void and the term of the probation shall be treated as the term of the labor contract.”

(b) Properly evaluate performance during the probation. The employer must set clear evaluation criteria in the system and inform the worker in writing of the tasks to be performed during the probation. If the worker fails the to meet the assessment criteria during the probation, the employer shall inform the worker with clear reasons and collect relevant evidence. The worker should be notified in writing before the end of the probation.

3.7 Clear training agreements

According to Article 22 of the Labor Contract Law “Where an employer pays special training expenses for the special technical training of his employees, the employer may enter an agreement with his employees to specify their service time period…” In the training agreement, the terms of training content, class hours and price should be clearly stipulated. Otherwise, the agreement would be unclear, and the employer will not be able to hold the employee responsible for breach of contract.

3.8. Timely sign confidentiality and non-competition agreements

Sign confidentiality agreements with employees to protect the employer’s business secrets and confidential matters related to intellectual property rights. Since the non-competition agreement is the employer’s restriction of employment for a certain period after the employee leaves the job, ordinary workers are unwilling to sign this type of agreement. The best period for the employer and the employee to successfully sign the agreement is during onboarding. Therefore, the employer must sign a non-competition agreement with the worker in a timely manner.

From the publication of the job advertisement to signing the labor contract, legal risks prevention must be carried out. We hope the above eight suggestions help readers in their daily work!