The Shijiazhuang Intermediate People's Court has issued a final judgment in the second-instance labor dispute case between a certain media company and employee Li Muhui. The court ruled that an employment relationship existed between the parties from December 31, 2020, to March 31, 2024. The company is required to pay Li Muhui her March 2024 salary of 5,194 yuan, compensation for illegal termination of her labor contract totaling 37,006.9 yuan, and payment for untaken annual leave from 2022 to 2024 amounting to 5,347.46 yuan.
The civil judgment document revealed that Li Muhui joined the company in December 2020. In August 2021, the company signed a "Labor Contract Termination Agreement" with her due to a company name change. However, Li Muhui's position and job responsibilities remained unchanged, and she did not actually leave the company. Subsequently, the two parties signed two labor contracts, with the final one valid until August 30, 2024. On March 1, 2024, the company issued a "Labor Contract Termination Notice," citing the termination of cooperation with Kuaishou and Baidu, the disappearance of Li Muhui's position, and failed negotiations for a position transfer as reasons for terminating the employment relationship effective March 31. Li Muhui disagreed and applied for arbitration with the labor arbitration commission, seeking confirmation of the employment relationship, payment of wages, compensation for illegal termination, and payment for untaken annual leave from 2020 to 2024. After the arbitration commission ruled partially in Li Muhui's favor, both parties filed lawsuits in court.
The first-instance court ruled mostly in favor of Li Muhui. The company appealed, primarily arguing that Li Muhui's claim for 2022 annual leave should have been filed before December 31, 2023, and that her 2024 arbitration application was time-barred. The company also claimed that the termination of cooperation with Kuaishou and Baidu constituted a "significant change in objective circumstances existing at the time of concluding the labor contract," as Li Muhui's position lost its basis. The company asserted that it had engaged in transfer negotiations and that the termination was legal, thus no compensation was owed.
Li Muhui argued that annual leave can be scheduled across calendar years. The statute of limitations for the 2022 untaken annual leave payment should be calculated from December 31, 2023, making her 2024 arbitration application timely. She also stated that the company failed to provide evidence that the leave had been scheduled and should pay for untaken leave from 2022 to 2024. Furthermore, she contended that the company's business scope includes multiple areas like film planning and computer technology development, and normal business adjustments do not qualify as a "significant change in objective circumstances," making compensation obligatory.
The second-instance court determined that regarding the statute of limitations for the untaken annual leave claim, according to relevant laws, the one-year limitation period for annual leave claims begins on December 31 of the following year, due to the nature of annual leave. Therefore, Li Muhui's 2024 application was timely for the 2022-2024 period. Regarding the calculation standard, unpaid annual leave wages are calculated based on daily wage multiplied by untaken days and a 300% rate, resulting in an additional 200% payment after deducting the normal wage. Based on Li Muhui's average salary and untaken days, the calculated amount was correct. The court also found that a company name change does not affect contract fulfillment, dismissing the company's claim about restarting the employment period. Finally, the court ruled that the termination of cooperation was a business adjustment, not an unforeseeable, insurmountable change making the contract impossible to perform, especially since the company failed to prove detailed negotiation efforts. Thus, the termination was illegal. The claim for the March 2024 salary was also supported based on the evidence provided.