When Business Failures Become Blame Employees Must Bear

2024-02-22 876 0人评论

  In production and operations, some employers, in order to reduce losses to their own interests, describe it euphemistically as "sharing weal and woe," but in reality they shift part of the business risks onto workers in a disguised form through rules and regulations and contractual agreements, whereas the responsibility for a company's business risks should not be borne by workers.

  If they do not sign a "commitment to collect payment" guarantee, the employer will not process their resignation; if they do sign, they will face recovery claims for huge amounts of payment for goods and late fees. Under the torment, Chen Zheyuan chose to sign and resign. Two years later, the company sought 422,000 yuan from him.

  On February 18, Chen Zheyuan told reporters that in January this year he received a civil judgment mailed by the court, and the court did not support the employer's litigation request requiring him to pay the customer's outstanding payment and late fees. This made him breathe a long sigh of relief.

  Business risk refers to the possibility and losses of operational failure, or of operational activities failing to achieve expected goals, caused during a company's operations by the complexity and volatility of the external environment and by the limited cognitive and adaptive capacity of the entity in relation to that environment.

  In production and operations, some employers, in order to reduce losses to their own interests, describe it euphemistically as "sharing weal and woe," but in reality they shift part of the business risks onto workers in a disguised form through rules and regulations and contractual agreements. Reporters learned through interviews that such rules and regulations and contractual agreements do not hold up in court.

  Customer debts required to be repaid by departing employee

  "I, Chen Zheyuan, state that to date, the accounts receivable formed by my external sales on credit that have exceeded the collection period total 357,000 yuan. I guarantee that within one month from today I will collect the above payment for goods back to the company; any balance not recovered upon expiry shall be repaid by me, and I will also bear late fees calculated at 0.5‰ per day from the date of breach to the date of repayment."

  When he received the guarantee, Chen Zheyuan hesitated for a week. Chen Zheyuan is a salesperson who worked for seven years at a food production and processing enterprise in Dalian, Liaoning. In December 2020, he decided to resign and start a business, and the company required him to sign a guarantee, otherwise it would not process his resignation procedures. Chen Zheyuan had no way to refuse.

  In December 2022, the employer applied for labor arbitration, requiring Chen Zheyuan to pay the uncollected payment for goods of 357,000 yuan and to pay overdue late fees of 65,000 yuan at a rate of 0.5‰. The local arbitration commission refused to accept the case on the grounds that the litigation request exceeded the limitation period for arbitration applications. The employer filed a lawsuit with the court.

  After trial, the court held that Chen Zheyuan's act of selling goods was performance of his work duties, and that he and the company were in a management and managed relationship rather than equal civil subjects. Under Article 26 of the Labor Contract Law, a labor contract in which the employer exempts itself from its statutory liability is invalid or partially invalid. Pursuing payment for goods is the employer's responsibility, and provisions requiring employees to bear it have no legal effect.

  "This is a typical act of an employer using its dominant position to shift business risks," said Meng Yuping, a legal expert at the Liaoning Provincial Labor and Personnel Dispute Research Association. According to relevant provisions of the Labor Contract Law, except in circumstances involving confidentiality obligations and non-compete restrictions, an employer may not agree with a worker that the worker shall bear liquidated damages.

  In practice, some companies use similar methods to require salespeople like Chen Zheyuan to bear responsibility for collecting payments. Meng Yuping said that in a labor relationship, the worker's labor power and the means of production are both production factors of the employer, and the responsibility for a company's business risks should not be borne by workers. Other business risks that should not be shifted in this way include declining profits caused by falling market demand, production stoppages caused by supplier breach, loss of market advantage caused by failed project research and development, and increased operating costs caused by policy changes, among others.

  "Sharing" business risks becomes an employee obligation

  "Unilaterally expanding the scope of employees' duties and obligations is the most commonly used trick by companies," said Wang Jinhai, a public-interest lawyer stationed at the Dalian Public Legal Service Center. The statutory obligations of workers clearly stipulated in the Labor Law are that workers shall complete labor tasks, improve vocational skills, implement labor safety and health regulations, and observe labor discipline and professional ethics. Obligations beyond these must be assessed case by case to see whether they are reasonable and lawful.

  In 2021, He Youzhi worked as a property consultant at a real estate company in Shenyang. The company's Measures for the Administration of Reward Assessment stipulated that sales personnel who completed tasks would be paid rewards in proportion to settled agency fees. A developer was supposed to pay the real estate company project agency fees of 3 million yuan, and after negotiation, the developer offset the agency fees with housing. The real estate company sold the offset housing at reduced prices for 2.25 million yuan, and then paid He Youzhi's reward based on the 2.25 million yuan base.

  He Youzhi filed a lawsuit, and the court held that the developer's full payment of agency fees by offsetting debt with housing should be deemed full settlement of the agency fees. The real estate company's sale of the housing at reduced prices was its own business decision, and it could not shift the losses from its own price reductions onto employees.

  "If the company had told me business conditions were poor, I would have been willing to take less reward on my own initiative. It is just that this forced 'sharing of weal and woe' is unfair and unreasonable," He Youzhi said.

  In August 2022, a safety production reward measure issued by a petrochemical enterprise in Liaoning was abolished before it even took effect. Li Wei, chairman of the company's labor union, explained that in order to achieve "linking safety performance with the fulfillment of safety incentives," the enterprise issued a measure under which frontline production employees would have 500 yuan deducted from their wages each month as a "safety risk deposit," which would not be returned if a work safety accident occurred. If no safety accident occurred within a quarter, the principal of 1,500 yuan for three months could be paid out. If there were no accidents for the whole year, the 6,000 yuan principal could be returned at year-end, plus an additional incentive bonus of 6,000 yuan.

  "The original intention of the incentive was good, but this provision is unreasonable and unlawful," Li Wei said. "Only when a worker has committed intentional misconduct or gross negligence causing economic loss to the employer may the employer deduct corresponding compensation from the worker in accordance with the labor contract and rules and regulations formulated according to law. Moreover, work safety accidents are affected by many factors and are not necessarily entirely the employee's responsibility, so directly linking them to employees' wage income is clearly unreasonable."

  Sharing weal and woe should consider equivalence of benefits and risks

  "As subjects of the market economy, employers operate independently and bear their own profits and losses, and business risks should originally be borne by them," said Wang Lei, director of the Institute of Sociology at the Liaoning Academy of Social Sciences. Enterprises can reduce business risks through internal control, risk management, and other aspects. To control corporate operational risks, there must not only be a complete corporate governance structure, but more importantly effective performance of the legal responsibilities of each responsible subject in corporate governance, and a corresponding corporate operational risk prevention system must also be established.

  Meng Yuping believes that a worker's performance of duties is for the employer's benefit, and occupational risks should also belong to the beneficiary. It is unfair for employees to bear risks far higher than their labor remuneration, and it may also place a considerable burden on their daily lives. Therefore, consideration should be given to balancing the employee's liability for compensation against the employer's responsibility for business operations, and the employee's proportion of liability should be appropriately reduced in light of their wages.

  Wang Jinhai reminded workers that employees and enterprises are not in a partnership relationship, and a relationship of "sharing blessings and bearing hardships together" is not necessarily a partnership. A partnership is a civil legal relationship formed between civil subjects under an agreement for joint capital contribution, joint operation, shared benefits, and shared risks. When workers encounter such situations, they should carefully identify the risks and protect their lawful rights and interests.

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