In the management of labor and personnel in enterprises, the most confusing thing is often not the fact that employees violate discipline itself, but the fact that the enterprise unexpectedly loses in arbitration or litigation when the facts are clear and the basis is clear. At its root, it is mostly not physical injustice, but rather the fact that enterprises have fallen into legal "traps" in the three stages of procedural performance, evidence retention, and institutional design. This article combines typical cases to analyze the common but easily overlooked risk of losing in enterprise labor arbitration, and helps enterprises build a solid compliance foundation.

Trap 1: Only recognizing right and wrong, not following the procedure - when the right decision meets the wrong steps

A typical case heard by the First Intermediate People's Court of Shanghai (2018) Hu 01 Min Zhong No. 12984) reveals the most easily overlooked losing area for enterprises: even if the employee's disciplinary violations are clear and the rules and regulations are based on clear evidence, once the procedure for terminating the labor contract is illegal, the enterprise still has to bear adverse consequences.

In this case, the employee did commit serious disciplinary violations, and the company terminated the contract in accordance with its rules and regulations. The first instance court supported the company's decision. However, in the second instance, the company admitted in court that it did not notify the union in advance of the termination in accordance with the law. Based on this, the court determined that the procedural defect constituted illegal termination and ultimately ordered the company to pay compensation. This case clearly demonstrates that "procedural justice" in labor law has independent and rigid requirements. Without going through the union beforehand, it is impossible to remedy the situation afterwards, and even the most comprehensive violation of discipline cannot reverse the defeat.

Labor law not only focuses on 'what has been done', but also on 'how it was done'. Many business managers believe that "correct results" can exempt them from liability, but the arbitration tribunal reviews a double standard: factual determination plus procedural compliance. Without the latter, the former often loses its meaning.

Compliance recommendations

Enterprises should standardize the process of terminating labor contracts, especially the statutory procedures such as notifying the union and hearing arguments; Establish a 'Program Compliance Checklist' to verify each item before making major personnel decisions; All procedural steps must be documented in writing, such as union signed receipts, meeting minutes, etc. For employers who have not established a trade union, it is recommended to fulfill the notification obligation by informing and listening to the opinions of employee representatives or notifying the local trade union where the unit is located.

Trap 2: Holding facts without evidence - an unprovable truth

A company in Qingdao unilaterally terminated the labor contract on the grounds that employee Yi had an argument with colleagues in the dormitory and violated the "no noise, no fighting" rule in the Employee Handbook. In the trial of the case, the company claimed that "each employee of the unit has a copy of the Employee Handbook and has organized employees to study it". However, when the employee denied it, the company failed to provide any valid evidence in both the first and second trials to prove that it had publicly disclosed or informed Yi of the Employee Handbook.

The court therefore determined that according to Article 4 of the Labor Contract Law, rules and regulations that involve the vital interests of workers must undergo democratic formulation procedures and public disclosure procedures in order to serve as management basis. Due to the company's failure to fulfill its burden of proof, the Employee Handbook in question does not have binding force on Mr. Yi. The termination of the company was deemed illegal due to the lack of legal basis.

This case reveals a common misconception that companies often fall into: 'Once a system is issued, it is equivalent to it taking effect'. At the legal level, "public notification" is a key link connecting institutional texts with workers, and the responsibility for proving this link lies entirely with the employer. Many companies have established detailed systems, but due to negligence in retaining evidence for this "last mile", the entire system has become a "piece of paper" in front of the law.

Compliance recommendations

Enterprises should solidify the onboarding process, create a "Regulations and Rules Receipt Letter" as an attachment to the labor contract, require employees to sign and confirm, and independently archive it; After the revision of rules and regulations, they must be conveyed through verifiable means such as special training and internal notifications, and obtain written confirmation from employees again; For penalty decisions and notices of termination, it is necessary to use a delivery method that can retain vouchers and permanently keep the delivery vouchers.

Trap 3: Setting rules but violating principles - an inherently inadequate internal system

In a labor contract dispute case between a municipal engineering company and employee Zhang, the company terminated the labor contract based on the "Departmental Personnel Optimization Allocation Plan" formulated by the superior company, claiming that Zhang had failed the assessment for three consecutive months. The plan stipulates that "those who are assessed as' unqualified 'will have their employment relationship terminated in accordance with the law

The court thoroughly denied the legality of the system from both procedural and substantive perspectives after trial. Firstly, the program is illegal: the plan was unilaterally drafted by the company's human resources department without discussion by the employee representative assembly or all employees, which violates the mandatory provisions of Article 4 of the Labor Contract Law. Secondly, the content is illegal: the court pointed out that the regulation is essentially a "last place elimination", and its purpose is not to scientifically evaluate whether employees are competent in their work, but to use it as a direct elimination method, which violates the principle of objective and fair assessment. The final court determined that the system could not serve as a basis for management, and the company constituted an illegal termination.

Enterprises enjoy the autonomy of employment management, but the boundary of this right is the mandatory provisions of the law and the principle of reasonableness. Rules and regulations not only require legal content, but also require reasonable content. The clauses that increase the responsibility of workers and exclude their primary rights will face the risk of being denied in judicial review.

Compliance recommendations

When formulating rules and regulations, enterprises must strictly follow democratic procedures. Systems that involve the vital interests of workers must be discussed by the workers' congress or all employees, and determined through equal consultation with the trade union or workers' representatives; Punishment measures should follow the principle of proportionality, matching the nature, degree of fault, and consequences of the disciplinary behavior; The final rules and regulations must be made known to every worker through effective means.

Ending

Manage within the framework of rules and develop on the basis of compliance. The outcome of labor arbitration often depends not on the right or wrong of the facts themselves, but on whether the enterprise can internalize the legal requirements for procedure, evidence, and institutional rationality in every detail of daily management. A program oversight, a lack of evidence, or an unreasonable regulation can all lead to the failure of all previous management efforts.

For enterprises, the significance of building harmonious labor relations goes far beyond winning an arbitration. When compliance is no longer an external constraint, but an internalized management wisdom, enterprises can achieve stable and sustainable development within the legal framework.