Article 40(2) of PRC Labor Contract Law lists the conditions for incompetence dismissal, where an "employee does not meet the job requirements and continues to fail after training or position adjustment". Even though the provision is no more than 30 words, 'incompetence dismissal' is the LCL's main point of contention in company dismissal management. In media, many headlines such as "incompetence dismissal dies in Beijing and Struggles in Shanghai" and "incompetence dismissal is harder than touching the sky", go to reflect the difficulty and awkward conditions of incompetence dismissal.
Incompetence dismissal is difficult for a company, with traps around every corner. Limited by the length, this article is only written for training purposes, providing information on what conditions may be accepted by the judge in cases of incompotences dismissal, with an analysis of judicial cases and coupled with practical suggestions.
I Training irrelevant to the job position will not be considered valid training.
During litigation, employees often question the company's training scheme, considering its content to be irrelevant to the job position, and therefore cannot be used as a justification for incompetence dismissal.
For example, in the case of Dell China VS Yang Fan, the two parties had different opinions on the nature of the training. Yang stated that, although he participated in three pieces of training, the content of the training mainly focused on improving speech skills instead of improving sales skills. Yang was an 'internal product specialist', who does not need to communicate with the client, therefore the training was irrelevant to Yang's normal work. Dell claimed that the employees' participation in the training are all failed in finishing sales task, so the three pieces of training are all arranged for improving sales skills. The judge of the second trial considered the Job Description which revealed that Yang's work was to provide technical services and lead his team to finishing sales tasks, something which is unrelated to speech skills. As a result, Dell's opinion is not accepted.
In terms of legal advice based on the above case and judicial practice, in order to convince the arbitration committee or a court of the validity of a training scheme, it is suggested that:
1.The training content shall be relevant to the work, business and job responsibility instead of exceeding the normal evaluation range of the work, business or job responsibility in question.
2.The link between training content and work shall be direct. In the above case, although improved speech skills may partly improve sales levels, there is still a risk that judge may consider it as unrelated to normal work and therefore not 'relevant training'. If the training content is specifically about how to improve sales skills, it may be more likely to be considered as valid training.
II Training towards all evaluation grades will not be considered as training for incompetence.
In practice, the company may organize training schemes that involve all employees that pertain to different evaluation grades owing to efficiency and convenience. However, it brings some legal risk.
In the case of Liaoning Huarunwanjia Market Co., Ltd & Ma Yingqi, the court looked at the company's training records which showed that many managing employees who attended a training event still achieved different grades in the 2015 end-of-year performance evaluation, these being: A+、A、B+、B、C. As such, the court determined that the training was not organized for improving the performance of incompetent employees. The company failed to prove employee' incompetence and the provisions of training in response to this.
Our legal opinion is that:
1.It is better for the training to target 'incompetent' employees, without covering employees of other performance levels in order to avoid confusion.
2.The training content shall be designed in such a way as to be specific to the employee and his/her area of incompetence. This ensures that the training is particular to the employee's position, level, and skills.
III Sending emails to explain better work approaches would not be considered as training.
With the development of the no-paper office environment, emails are frequently used in normal day-to-day work and communication. It's common for companies to note employee work mistakes and give constructive feedback through emails. However, please note the following case in which the company sent emails to the employee in order to explain better methods of working. It was not considered as training by the arbitration committee or the court.
In the case of Kangwen Mobile Power Equipment Shanghai Co., Ltd, Huang has been with the company for over 10 years and was an experienced expert in sales for over 20 years. Huang showed incompetence at work, considering Huang's position and past experience, the company thought that comprehensive and basic sales skills training was not necessary for Huang. Instead, the company only provided some constructive opinions by email and phone call to explain better work methods. The company considered that the training should not be limited to the traditional forms of giving lectures or lessons. Instead, the company thought that emails and telephone calls should also be considered as valid training. Since there are no statutory regulations concerning the quantity of the training, the company only offered suggestions on one of Huang's methods of working, should be deemed as an example of training.
The court considered that, according to the LCL, the company should have provided specific training for Huang. The company admitted that there was no 'special training' for Huang, they only providing suggestions on work methods by email. As such, the company lacked evidence to sufficiently prove that valid training was provided. The above conduct could not be deemed as training. Therefore, company's opinion was rejected.
Therefore, from the perspective of legal practice, it is advised that:
1.Sending emails could be an auxiliary method of training. Meanwhile, the supervisor should also provide face-to-face training and maintain the relevant evidence, such as an employee' attendance record and training minutes signed by the employee.
2.In practice, if the company only provides suggestions, there is still a legal risk that this will not be considered 'training'. Compared with lectures or lessons, although specific suggestion may be more specialized and practical, which may be more effective, the judge still may regard it as not normal training. Therefore, it is suggested that company should supplement emails with other forms of training, including specific instructions and training lectures, in order to reduce legal risk.
IV Weekly meetings shall be excluded from training.
In practice, some companies would argue that weekly meetings do constitute training and opt for it over forms of targeted training. It often happens for efficiency considerations or when evidence is searched for afterward.
In the case of Zhao Yong and Beijing Automobile Association Co., Ltd, the judge considered that, although Zhao Yong was evaluated as an 'E 'during Feb to May 2014, the company did not provide training for Zhao. The company claimed that weekly meetings constituted one type of training. This was not accepted by the court.
Therefore, it is suggested that companies do not provide training in the form of weekly meeting. The training shall be provided to an incompetent employee separately, with face-to-face instruction or through the provision of targeted lessons.
V. Arranging for work task is different from skills training.
In practice, as for positions where work content is measurable, the company often gives employees work goals during performance improvement training and requires the employee to finish it. This method of training carries the high legal risk that a judge would consider it as a work task or a work requirement, which cannot be considered as training.
In the case between He Yuan and Shanghai Tianjin Technology Co., Ltd and its Guangzhou Branch, the employee had shown no work achievements from Jan 1 to May 12 of 2015. In order to improve He, the company required He to complete over 20 phone calls for new customers and record the customer's information. The judge of the second trial considered that company's requirement that He completes 20 phone calls should be considered a work task instead of skills training.
Therefore, arranging for a work task is still one type of normal task requirement instead of lawful training under the labor contract law. As for the measurable position, arranging for goals and tasks is beneficial to prove employee' incompetence after training, but it could not be deemed as training in itself. To meet the legal requirement, the company could choose the appropriate training methods to gain judge's support.
Incompetence dismissal should be considered a systematic project with high level of difficulty, which needs a manager's full experience and practical skills. Training is the one part that a company could control relatively easily, which can always be done better with the careful utilization of knowledge and research. This article selected some typical cases so as to reflect legal practice's attitude for different types of training, for the reader's consideration. It should be noted is that practical cases are varied and complicated. Although they seem similar, many cases garner different results. Therefore, the company should pay more attention and be cautious when effecting incompetence training in human resource management.