Protect by law the rights and interests of women employees,create a maternity-friendly working environment

The case of labor dispute between X Produces Trade Company and Zhao Xli

[Core values]

protection of women employees’ rights and interests

justice

rule of law

[Basic Facts]

In September 2018, X Produces Trade Company and Zhao Xli reached an oral employment agreement. On September 3, 2018, Zhao Xli, without a labor contract signed between the two parties, started to work with X Produces Trade Company and took charge of administrative works, thus establishing a de facto labor relationship. On March 2, 2022, Zhao Xli applied to X Produces Trade Company for maternity leave. On March 14, 2022, Zhao Xli went to Hainan Provincial People’s Hospital for childbirth and stayed four days there and doctors advised her to take maternity leave for dystocia after discharge. On August 8, 2022, when Zhao Xli requested to go back to work after the maternity leave, X Produces Trade Company asked her to dissolve the labor relationship on the ground that the company was having a hard time and had to lay off employees. Zhao Xli agreed to dissolve the labor relationship but the two parties failed to reach an agreement on the sum of compensation. On December 5, 2022, X Municipal Labor and Personnel Dispute Arbitration Commission made out an Arbitration Award, which decided that (i) X Produces Trade Company pay Zhao Xli 17,200 yuan (monthly salary 4,300 yuan/month x 4 months) for financial compensation, and (ii) X Produces Trade Company pay Zhao Xli 29,096.66 yuan (4,300 yuan/month x 203 days) for salaries during maternity leave. X Produces Trade Company rejected the decision, and brought an action to the first-instance court. When the labor relationship existed between the two parties, Zhao Xli had not participated in the maternity insurance.

[Judgement]

The first-instance court holds that according to the Labor Contract Law of the People’s Republic of China, “The employing unit may not revoke the labor contract concluded with the worker, who is under one of the following circumstances, by applying the provisions in Articles 40 and 41 of this Law: (4) The worker is during the pregnant, puerperal or breast-feeding stage”, “Financial compensation shall be paid on the basis of the number of years a person works in a unit, the rate being one month’s salary for the work of one full year. If he has worked for six months or more but less than one year, the time shall be calculated as one year; and if he has worked for less than six months, he shall be paid half of his monthly salary as financial compensation.” According to the Detailed Salary Statement that X Produces Trade Company supplied, Zhao Xli’s salary was 4,300 yuan per month. X Produces Trade Company violated the law above and revoked the labor relationship with Zhao Xli, and should pay a financial compensation of 17,200 yuan (4,300 yuan/month x 4 months). With regard to Zhao Xli’s maternity subsidy during maternity leave, the provisions of the Special Rules on the Labor Protection of Female Employees, Articles 7 & 8, “The maternity leave of female employees shall be 98 days, including 15 days of antenatal leave. An extra maternity leave of 15 days shall be granted in case of dystocia”, and “The maternity subsidy for female employees who have participated in maternity insurance during their maternity leave shall be paid by the maternity insurance fund and calculated on the basis of the average monthly wages of employees paid by the employers during the previous year; and the maternity subsidy for female employees who have not participated in maternity insurance shall be paid by the employers and calculated on the basis of the wages of female employees prior to their maternity leave” shall apply. According to the provisions above, Zhao Xli suffered from dystocia, therefore, her maternity leave should be 113 days (98 days + 15 days), and maternity subsidy 16,196.67 yuan (4,300 yuan/month ÷ 30 days x 113 days), which should be paid by X Produces Trade Company. The total of the two sums above should be 33,396.67 yuan. The first-instance court decided that X Produces Trade Company pay 33,396.67 yuan to Zhao Xli for financial compensation and maternity subsidy since the judgement takes effect. After the first-instance judgement was announced, Zhao Xli rejected it and appealed to a higher court. The second-instance court holds that there are other provisions beside the Special Rules on the Labor Protection of Female Employees issued by the State Council like Hainan Regulations on Population and Family Planning, Article 27, “Couples giving birth to children without violating these Regulations enjoy the following bonus and treatment: (i) female employees working with government agencies, social organizations, enterprises and public institutions enjoy an extra three months above the state-stipulated maternity leave.” The stipulations above aim to alleviate and resolve the special physiological difficulties that female employees encounter on their job, and protect their physical and mental health, and Hainan enterprises should observe such provisions. Zhao Xli was a female employee at the puerperal and breast-feeding stages, and took the maternity leave for difficult childbirth as per the medical instruction, therefore, the total number of her maternity leave should be 203 days (98 days + 15 days + 90 days). According to the provisions above, X Produces Trade Company should pay to Zhao Xli 29,096.66 yuan (4,300 yuan/month ÷ 30 days x 203 days) for maternity subsidy. The first-instance judgement adopted 113 days for maternity leave and was therefore wrong in the calculation of maternity subsidy, and should be corrected. The second-instance court thus decided that X Produces Trade Company pay to Zhao Xli a total of 46,296.66 yuan for financial compensation and maternity subsidy.

The judgement has taken effect, and X Produces Trade Company has performed its obligations as determined in the judgement.

[Significance]