Introduction:
Have you ever wondered if an HR assistant can sign a labor contract on behalf of an employee? In a recent case in China, a company found out the hard way that it is not as simple as it may seem. The company was ordered by a court to pay double the salary owed to an employee due to a contract that was signed by an HR assistant on behalf of the employee. The court ruled that the HR assistant and company both was at fault and must compensate the employee for the error. This case highlights the importance of labor contracts and the potential legal consequences of not following proper procedures.
Basic Fact:
Liu worked at Company A as a HR assistant and clerical staff from August 30, 2017 to December 4, 2017, with a salary of 3,200 yuan per month. However, there was no written employment contract between the two parties.
Gao was employed by Company A on August 4, 2017, as a principal, with a monthly salary of 10,000 yuan, and there was no written employment contract between the two parties either.
On September 1, 2017, in order to process Gao’s social insurance procedures, Company A instructed Liu to sign a “Labor Contract” on behalf of Gao. Later, a labor dispute arose between Gao and Company A, and through arbitration, Company A was ordered to pay Gao overtime pay of 4,933.33 yuan, double the salary for not signing the labor contract of 37,890.63 yuan, appraisal fee of 3,000 yuan, heatstroke prevention and cooling allowance of 316 yuan, and centralized heating and heating allowance of 185 yuan. Company A paid the above-mentioned amounts to Gao. Company A believed that it paid Gao the double salary for not signing the labor contract and appraisal fee due to Liu’s reasons, and therefore sued Liu for reimbursement of these amounts.
Company A requested the court to: 1. Order Liu to compensate for the economic losses of 40,890.63 yuan in accordance with the law; 2. The litigation costs shall be borne by Liu.
Liu argued that she was originally promised an administrative clerk position but was actually assigned to the HR assistant after joining the company.
On the second day of her employment, she was arranged by the HR supervisor and the deputy general manager to fill out a contract, which was Gao’s labor contract. Since Company A did not pay social insurance for Gao after his employment and Gao repeatedly urged the company to pay, Company A decided to pay social insurance for Gao.
However, to pay social insurance, a labor contract must be signed and filed with the local social insurance agency. On September 1, 2017, while Gao was on a business trip, the HR supervisor and deputy general manager arranged for Liu to sign the contract. Liu, due to her personal dependence on Company A, signed Gao’s labor contract on his behalf after refusing to do so initially, and Company A stamped and confirmed it.
The Court’s Opinion:
In the court’s opinion, the case is a tort liability dispute. Whether the act constitutes a tort should be determined by whether the actor has illegal behavior, whether the victim has suffered harm, whether there is a causal relationship between the illegal behavior and the consequences of the harm, and whether the actor has subjective fault.
The Labor Law and the Labor Contract Law of China both stipulate that a written employment contract should be established when establishing a labor relationship. The company, however, did not sign an employment contract with Gao for a long time due to some reasons. It instructed Liu to sign a labor contract with Gao on behalf of Gao in order to pay social security. On the second day of Liu’s employment, she was arranged by the HR supervisor and the vice president to sign a contract, which was Gao’s labor contract. Although Liu was a new employee and could not refuse the arrangement, the contract was only for the need to handle Gao’s social security procedures. The company’s legal obligation to sign a labor contract with Gao was not exempted as a result.
Although the arbitration commission ruled that the company should pay double wages and appraisal fees due to the absence of a labor contract between the two parties, this result was due to the company’s own reasons and the actions of Liu. Therefore, the court ruled that the company should bear 70% of the responsibility and Liu should bear 30% of the responsibility. Liu was ordered to pay the company RMB 12,267.19 in compensation for economic losses.
