Keywords: Failure to Join after Employment Labor Dispute Contracting Negligence

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Since the outbreak of COVID-19, all walks of life have received a huge impact. For individual workers, some have been laid off or dismissed due to the pandemic, while others have lost employment opportunities due to the pandemic. In case of dismissal or termination of labor relations, the Labor Contract Law of the Labour Contract Law of the People's Republic of China and relevant laws and regulations shall apply. What shall we do if we are told to cancel the employment? This is the issue discussed in this article.

Case Introduction:
Zhen Meili interviewed for the position of Operations Director at Jia Meili Co., Ltd. on December 25, 2019.
Jia Meili Co., Ltd. issued an "Employment Notice" to Zhen Meili on December 31, 2019, informing her to start work on February 3, 2020 (the 10th day of the year) as the Operations Director. The labor contract period is 3 years, with a probationary period of 3 months and a salary of RMB 15000 during the probationary period. Please reply within 24 hours after receiving this notice, otherwise the 'Employment Notice' will automatically become invalid.
On the same day, Zhen Meili replied to Jia Meili Co., Ltd., stating, "I have received it and will be on duty on time
In January 2020, the COVID-19 broke out in China. After resuming work and production, Jia Meili Co., Ltd. dissolved its original operating department and notified Zhen Meili in March 2020.
Zhen Meili believes that she has formed a labor relationship with Jia Meili Co., Ltd. and requests Jia Meili Co., Ltd. to pay the salary that should be paid after the "on duty" in February, or to compensate for the losses caused by her refusal to offer to other companies after accepting the offer.

Summary of the case:
1. Jia Meili Co., Ltd. issues an employment notice to Zhen Meili;
2. The employment notice records the main contents that should be recorded in the labor contract, such as position, salary, and probationary period, and requires a response within 24 hours;
3. Zhen Meili replied within the specified time;
4. Jia Meili Co., Ltd. is unwilling to apply for employment for Zhen Meili due to the epidemic and has signed a labor contract.

Focus of controversy:
1、 Is the legal relationship in this case a labor contract dispute or a contractual fault liability dispute?
2、 Should compensation/damages be paid in this case, and if so, what is the amount of compensation/compensation?

Lawyer's opinion:
1、 Legal relationship issues in this case
This case should be a dispute over contractual negligence liability.
Interpret from a legal perspective.
The labor contract relationship refers to the establishment of a labor relationship between the employer and the employee, clarifying the rights and obligations of both parties, covering the process of signing, performing, modifying, terminating or terminating the labor contract. The employer establishes a labor relationship with the employee from the date of employment.
Contractual fault liability refers to the responsibility that should be borne during the contracting process before the formation of a contract, if the contract is not established or invalid due to the fault of one party. Article 42 of the Contract Law of the China stipulates that a party shall be liable for damages if it causes losses to the other party under any of the following circumstances in the process of concluding a contract: (1) negotiating in bad faith under the pretext of concluding a contract; （2） Deliberately concealing Material fact related to the conclusion of the contract or providing false information; （3） Other behaviors that violate the principle of good faith.
In this case, Jia Meili Co., Ltd. issued an "Employment Notice" to Zhen Meili, which was an "offer" for the labor relations appointment contract. And Zhen Meili replied within the specified time, forming the "commitment" of the labor relationship appointment contract.
Although both parties have reached a certain degree of agreement on the duration of the labor contract, job positions, probationary salary, and duration, the employer and the employee have not formed an actual employment relationship. Therefore, it can only be indicated that both parties have made a lot of preparations for establishing a labor contract, and after Jia Meili Co., Ltd. confirmed the employment of Zhen Meili, they unilaterally refused her employment without actual employment, resulting in the failure of both parties to establish a labor contract relationship and the fact that both parties did not constitute a labor contract relationship. Therefore, this case does not belong to a labor contract relationship and should belong to a contractual fault liability dispute.

2、 Possible compensation issues in this case
Since both parties are in a dispute over contractual negligence liability, Zhen Meili's claim for losses should include three aspects.

1. The damage result should be based on facts, which rely on evidence as support;
2. There is a causal relationship between the damage result and the behavior of the employer;
3. The extent to which the employer violates the principle of good faith is equivalent to the provisions of the first two paragraphs of Article 42 of the Contract Law.

Contractual negligence refers to the violation of the principle of good faith by one party during the contracting process, resulting in the loss of the other party's trust and interests.

In this case, there are reasons why Jia Meili Co., Ltd. may be liable for contractual negligence:

1. Jia Meili Co., Ltd. has made the fact that Zhen Meili has formed reasonable trust. Jia Meili Co., Ltd. sent an "Employment Notice" to Zhen Meili through an interview, clarifying her arrival time, job position, probationary salary and period, and labor contract period. Zhen Meili's behavior of replying to the email within the specified time is enough to make Zhen Meili believe that she has been hired by Jia Meili Co., Ltd. and the labor contract is about to be reached.
2. Jia Meili Co., Ltd. did not inform Zhen Meili in a timely manner of the potential cancellation of the recruited positions, resulting in Zhen Meili rejecting other job opportunities and resulting in damaging outcomes. At the same time, Zhen Meili's claim requires evidence of her rejection of other companies' job "offers".
3. To what extent can Jia Meili Co., Ltd. be held accountable for the reasons for department adjustments. Specifically, is this department not needed, or is it not necessary for Zhen Meili.

This case can refer to the judgment:
Second instance civil judgment on the dispute over contractual negligence liability between Fuying Equity Investment Management (Guangzhou) Co., Ltd. and Li Minghui
Hearing court: Intermediate people's court

Case number: (2019) Yue 01 Min Zhong 321
Cause of action: Dispute over Liability for Contractual Negligence
Date of Judgment: March 5th, 2019
Judicial panel: Liu Gehua, Lian Changren, Zhang Chaohui