Latest Labor Law Compensation Standards for Dismissed Employees 2021

Article 47 of the Labor Contract Law stipulates that economic compensation shall be paid to employees according to the number of years they have worked in the employer and one month's salary for each full year. where it is more than six months but less than one year, it is calculated as one year; If it is less than six months, the worker shall be paid half a month's salary.

Monthly wage refers to the average salary of an employee in the 12 months prior to the termination or dissolution of the employment contract.

1. Dismissal without justifiable reasons.

When employees work, they must sign an employment contract. Since it is a contract, its content must be twofold. In the absence of any violation (of the law), dismissal means a violation of the labor contract and compensation shall be made in accordance with the labor law.

Under normal circumstances, it is carried out according to the number of years of service. A year is a month's salary. If it is less than one year and more than six months, it will be counted as one month, and if it is less than six months, it will be counted as half a month.

If the salary is three times higher than the average local monthly wage of the previous year, it shall be paid at the rate of three times, and the maximum period shall not exceed 12 months.

2. Dismissal for special reasons.

In general, there are three reasons for dismissal. First, the dismissal was justified without any compensation (prior notice required); 2.If they are dismissed for improper reasons, they shall be compensated according to the monthly wage standard; 3.

If they are dismissed for special reasons, they may be compensated or given one month's notice. Among them, special reasons mainly include the employee's inability to do the job due to his own reasons, and the company is unable to arrange other positions; If the objective circumstances of the contract change, both parties reach an agreement through consultation; Workers are not capable enough to change after training or job adjustment. In this case, you can give one month's notice in advance, or pay compensation directly for one month's salary.

Article 41 of the Labor Contract Law stipulates that in any of the following circumstances, if it is necessary to lay off more than 20 employees or less than 20 employees but accounting for more than 10% of the total number of employees of the enterprise, the employer shall explain the situation to the trade union or all employees 30 days in advance, and after listening to the opinions of the trade union or employees, the employer may reduce the personnel after reporting to the labor administrative department: (1) reorganization shall be carried out in accordance with the provisions of the Enterprise Bankruptcy Law; (2) Serious difficulties occur in production and operation; (3) Where it is still necessary to lay off personnel after the labor contract has been changed after the enterprise has changed its production, major technological innovation or adjustment of its business mode; (4) Other situations where the labor contract cannot be performed due to major changes in the objective economic conditions on which the labor contract is based.

If the dismissal is based on the provisions of Article 39 of the Labor Contract Law, it is in accordance with the law, there is no impropriety, and there is no economic compensation.

However, if the employee is dismissed without reason, he or she is suspected of illegally terminating the labor contract and shall bear the legal responsibility of paying twice the compensation stipulated in Article 87 of the Labor Contract Law.

Legal analysis: According to the law, the employer shall pay compensation to the dismissed employee under any of the following circumstances: (1) the employer carries out reorganization in accordance with the provisions of the Enterprise Bankruptcy Law and dismisses the employee through legal procedures; (2) The employer decides not to renew the labor contract with the employee after the expiration of the labor contract, except where the employer maintains or improves the terms and conditions of the labor contract to renew the labor contract, and the employee does not agree to renew the labor contract; (3) The employee is dismissed when the employer is declared bankrupt in accordance with the law, or the employer has its business license revoked, ordered to close down, or revoked; (4) When the employer decides to dismiss the employee in advance.

30 days' notice or payment in lieu of notice as compensation: If the employee has any of the following circumstances, the employer only needs to notify the employee in writing 30 days in advance or pay the employee an additional month's salary if the employee terminates the labor contract: (1) the employee is sick or injured not due to work, and after the expiration of the medical treatment period, the employee is unable to engage in the original job or work arranged by the employer; (2) The worker is still incompetent for the job after training or job adjustment. (3) There is a major change in the objective situation on which the labor contract was based at the time of conclusion, making it impossible to perform the original labor contract, and the parties cannot change the labor contract through negotiation and reach an agreement.

Legal basis: Article 40 of the Labor Contract Law of the People's Republic of China: Under any of the following circumstances, the employer may terminate the labor contract after notifying the employee in writing 30 days in advance or paying the employee an additional month's salary

1) The worker is sick or injured not due to work, and is unable to perform his original job or work arranged by the employer after the prescribed medical treatment period has expired;

2) The worker is incompetent for the job, and is still incompetent for the job after training or job adjustment;

3) There is a major change in the objective circumstances on which the labor contract was concluded, making it impossible to perform the labor contract, and the employer and the employee fail to reach an agreement on changing the content of the labor contract after consultation.

If the employee is legally dismissed and needs to pay severance payment, it shall be paid in accordance with the standard stipulated in Article 47 of the Labor Contract Law, and one month's salary shall be paid for each full year of work, half a month's salary shall be paid for less than six months, and one month's salary shall be paid for more than six months and less than one year;

In the case of illegal dismissal, compensation shall be paid in accordance with Article 87, and the compensation shall be twice the economic compensation calculated in accordance with Article 47.

The latest "Labor Law of the People's Republic of China" stipulates that the compensation standards for dismissed employees are as follows:

1. One month's salary shall be paid to the worker for less than one year;

2. If it is more than six months but less than one year, it shall be calculated as one year; If it is less than six months, the worker shall be paid half a month's salary.

3. If the monthly wage of a worker is three times higher than the average monthly wage of the employee in the previous year announced by the people of the municipality directly under the Central Government or the city divided into districts where the employer is located, the standard of economic compensation shall be paid to him at the rate of three times the average monthly salary of the employee, and the maximum period of economic compensation shall not exceed 12 years;

4. If the employer dismisses the employee in violation of the law, it shall bear the liability for compensation and pay compensation to the employee according to twice the compensation standard of economic reputation;

5. The employer needs to pay the economic compensation for the dismissal of the employee; If the employer terminates the labor contract through negotiation with the employee, is incompetent for the job due to the employee's lack of ability, or the employer implements economic layoffs, the employer shall pay economic compensation.

Laws and Regulations

Labor Law of the People's Republic of China

Article 25 The employer may terminate the labor contract if the worker falls under any of the following circumstances:

1) During the probationary period, it is proved that they do not meet the employment requirements;

2) Serious violation of labor discipline or the rules and regulations of the employer;

3) Serious dereliction of duty, malpractice for personal gain, causing major harm to the interests of the employer;

4) Those who have been pursued for criminal responsibility in accordance with law. Article 26 The employer may terminate the labor contract under any of the following circumstances, but shall notify the employee in writing 30 days in advance

1) The worker is sick or injured not due to work, and after the expiration of the medical treatment period, he is unable to perform his original job or work arranged by the employer;

2) The worker is incompetent for the job, and is still incompetent for the job after training or job adjustment;

3) There is a major change in the objective circumstances on which the labor contract was concluded, making it impossible to perform the original labor contract, and the parties cannot reach an agreement on changing the labor contract through consultation.