For several days, Mr. Wang is consulted one of his friends who was having competitive transaction struggle regarding with the labor. Not only the employees moved to the rival company, but also insisted their right to acquire the compensation plus the salary. On the other hand, based on the agreement in the labor contract, the salary should have covered the compensation, therefore should not be paid separately. Then how should we react to this matter, legally? According to some analysis and depth research on legal field, our final thought is that the employee shall be responsible to the labor contract and the labor contract is still valid between the employer and the employee.
Many people think that the agreement in the labor contract is invalid because of the 108 clause written for the adjudication guidelines in 2015 by the intermediate court in Shenzhen. The regulation on the labor contract was clear. If the salary covers the compensation which was created from the competitive transaction, then the agreement in the labor contract is invalid. However, this would have been turned out differently if the agreement in the contract was written that the compensation and the salary should be paid separately.
Nowadays, if the amount of the salary, unless it is not lower than the minimum wage, and compensation are respectively agreed by both parties, then the Shenzhen court assumes that the employee agreed on such compensation. Therefore the agreement in the labor contract is valid.
If the agreement in the labor contract is written that the salary covers the amount of compensation resulted from the struggle, it is just the salary covering the compensation is invalid, while, both parties are obliged to follow the competitive transaction and the employee has the right require the employer to pay compensations. In this case, after the resignation of the employee, the company should be bounded by the prohibition of competitive transaction in Shenzhen, and if the employee observes the transaction of the competition, this employee has the right to ask the company to pay the compensation of the matter. The compensation is 50% of the salary in Shenzhen.
Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.