Many bosses think:

Labor disputes occur by chance.

But when I systematically studied 627 labor dispute cases (second-instance judgments), I found a very cruel fact:

The vast majority of companies lose lawsuits not because the law is complicated, but because they have used some high-risk employment methods for a long time.

These employment methods may seem normal within the enterprise, but once they enter the court for review, they are often almost doomed to lose.

Through the systematic combing of the reasons for the judgment of 627 cases, I found that the employment risks of enterprises are highly concentrated in three models.

If companies still use these methods, it is almost only a matter of time before employment disputes are used.

The first is the most dangerous way of employment

It is called cooperation, but it is actually labor

This is the most common operation of enterprises at present.

In order to avoid labor relations, many companies will sign the following agreements with employees:

• Cooperation agreement
• Contracting agreement
• Labor agreement
• Project cooperation agreement

Many bosses have an understanding:

As long as the labor contract is not signed, it is not a labor relationship.

However, in judicial practice, this understanding is wrong.

When determining a labor relationship, the court never only looks at the name of the contract.

The court really looked at only one thing:

Whether the business is managing this person.

For example, whether a company:

• Schedule work hours
• Designate the place of work
• Conduct performance appraisals
• Monthly payments

As long as these characteristics exist, the court may find that the labor relationship is established.

In the labor dispute case between Ding and Xiang
Mouxiang (Changsha Intermediate People's Court (2025) Xiang 01 Min Zhong No. 14191):

Although the employee did not sign a labor contract, the court still pointed out:

Labor relations shall be comprehensively judged in combination with labor management relationships and sources of labor remuneration.

In the end, the enterprise was still found to have a labor relationship.

Once the labor relationship is established, the enterprise may face:

• Double wages without signing a labor contract
• Social security supplementary payment
• Illegal termination of compensation

Many enterprises end up in labor disputes because of this "cooperative employment".

The second most dangerous way of employment

Vague "verbal salary"

In 627 cases,

Wage disputes account for about 25%.

But many companies have actually paid salaries, but still lose the lawsuit.

There is only one reason:

Enterprises cannot prove wage standards.

The payroll management of many enterprises is like this:

• The salary structure is unclear
• The bonus rules are unclear
• There is no system for performance-based wages
• There is no written confirmation of the wage adjustment

Therefore, once a dispute occurs, enterprises often encounter a situation:

Employees say salary 12000
Enterprises say salary 6000

Who will the court finally accept?

The answer is usually:

Laborers.

The reason is simple:

Payroll records are usually held by businesses.

If the enterprise cannot provide complete evidence, the court will usually prefer to accept the worker's claim.

In the labor dispute case between Chen and a design company
in Hunan (Changsha Intermediate People's Court (2025) Xiang 01 Min Zhong No. 10443):

The worker claimed that his annual salary was 120,000 yuan.

The company claims that its monthly salary is 5,500 yuan.

Since the company could not provide a clear salary system and wage confirmation records, the court finally supported the workers' claims.

The reason why many companies lose lawsuits is not that wages are not paid.

Instead:

The salary was paid, but no evidence was kept.

The third most dangerous way of employment

Employees are dismissed at will

In 627 cases,

Labor contract termination disputes accounted for the highest proportion, reaching 34%.

Many companies often consider only one question when dismissing employees:

Are there any problems with employees?

However, in judicial review, the court focuses on three issues.

When the court reviews the dismissal of an employee, it generally looks at three things

• Is there a legal system?
• Is there any disciplinary violation?
• Is there a legal procedure?

As long as there is a problem in any link, the company may lose the lawsuit.

For example, many companies will do this:

The employee was late a few times,
the boss said directly

"You don't need it."

This practice seems reasonable within the enterprise,

However, it may legally constitute:

Illegal termination of labor contract

But if the enterprise has:

• Legal Employee Handbook
• Clarify the record of disciplinary violations
• Complete dismissal procedure

Courts tend to favor businesses.

In the labor dispute case between Chen Mouchao and a company
(Changsha Intermediate Court (2025) Xiang 01 Min Zhong No. 2509),

The company terminates the labor contract according to the employee handbook,

In the end, the court upheld the company's termination.

There is only one reason:

The enterprise system is legal and the procedures are complete.

The real adjudication logic of labor disputes

By studying the reasons for adjudication of 627 cases, it can be found that the courts usually review in the following order:

Whether the labor relationship
is established ↓ The content of
labor rights and obligations
↓ Whether
the enterprise management behavior is legal
↓ Whether the
evidence
is sufficient ↓ Whether the
procedure
is legal ↓ The
result of the judgment

In this logic,

The evidence system often determines the outcome of a case.

Many enterprises are not completely wrong in management,

However, due to the lack of evidence, it is ultimately difficult to obtain court support.

Why do enterprises always suffer losses in labor disputes?

The reason is actually very simple.

The vast majority of enterprises:

• There is no employment system
• There is no awareness of evidence
• There is no program management

Many bosses start consulting lawyers after labor disputes.

But in fact:

The core of labor disputes is never in the courtroom, but in the day-to-day management of enterprises.

Written at the end

After studying these 627 cases, I have a very deep feeling:

Labor dispute cases are never won or lost by law, but a judicial test of the management level of enterprises.

If an enterprise has no system, no evidence, no procedures,

Even if the enterprise itself is a reasonable party,

It is still possible to lose the case in judicial review.

Therefore:

What enterprises really need is not labor law skills,

It's a set

An employment management system that can withstand judicial review.