Was it unilaterally terminated? The court ruled that after tax, the monthly salary is only 2680 yuan, and one employee of the brokerage headquarters works for the company headquarters

China Fund News Dawn

"High salary" has always been synonymous with the securities industry, but not every brokerage employee can receive high salaries, and some even propose that life is in a difficult situation after salary cuts.

Recently, a labor dispute revealed on the China Judgment Document Network showed that Ye, an employee of Dongxing Securities Operation and Management Department, suffered a significant salary reduction in 2016. After the salary reduction, his salary was over 7000 yuan, with only 2680 yuan after tax. He was later terminated by the company for reasons such as "slacking off work", "not accepting company arrangements", and "violating attendance".

Reviewing the dispute between both parties, Dongxing Securities gave the reason that Ye refused to work for a long time and did not provide a work summary according to the company's assessment requirements for a significant salary reduction; Ye, on the other hand, advocates that he faced retaliation after refusing to comply with the leader's "violation" work requirements, and his life became difficult after the salary reduction. He had to protect his legitimate rights and interests through legal means.

Afterwards, Ye initiated relevant labor arbitration, demanding the payment of year-end bonuses and wage differentials, and demanding the continued performance of the labor contract, which was supported by the arbitration commission. Dongxing Securities then filed a lawsuit with the court, claiming that the termination of the labor contract with Ye is a legal termination, and both parties have no trust foundation. They hope that the court can change the judgment and there is no need to continue to perform the labor contract.

How will the court ultimately rule when both parties are in a dispute? Take a look at the details——

Monthly salary reduced from 1.3W to 7K

Employee proposition: Life is stuck in difficulties

Firstly, let's take a look at the employee's proposition:

According to Ye, he joined Dongxing Securities in October 2016 as a staff member in the Operations Management Department. However, his employment contract was unilaterally terminated by Dongxing Securities in January 2022. Regarding the significant salary reduction and subsequent termination of contracts, Ye believes that it was due to the leadership's "difficulties" and retaliation.

Ye claimed that in August 2019, relevant leaders approached him and requested to increase the content of asset management TA work. Ye stated that this violated the business requirements of the China Securities Regulatory Commission on private equity asset management, but the leaders continued to arrange regardless of the risk of violation. In February 2022, the Beijing Securities Regulatory Bureau issued a warning letter to Dongxing Securities due to issues such as inadequate implementation of new asset management regulations in its private equity asset management business.

In June 2021, Dongxing Securities reduced Ye's salary by 6000 yuan on the grounds of failing his performance evaluation in 2020. After the salary reduction, Ye's monthly salary decreased from 13130 yuan to 7130 yuan. For the year-end bonus that is most valued by "working professionals" in the securities industry, Ye won about 30000 yuan in 2020, while the previous year's year-end bonus exceeded 70000 yuan.

According to other judgment documents, Ye has filed an arbitration and lawsuit with the arbitration commission, demanding that Dongxing Securities pay the salary difference and the 2020 year-end bonus difference. At that time, the court partially supported Ye's lawsuit request and ordered Dongxing Securities to pay Ye a year-end bonus of 45000 yuan for 2020, as well as a salary difference of 6000 yuan.

Regarding the termination of the labor contract, Ye believes that the relevant leaders are making things difficult everywhere, including rearranging other job responsibilities and setting strict "competent work" conditions. After refusing to sign and accept, the labor contract was terminated on the grounds of "refusing to accept work arrangements and refusing to provide labor".

On January 28, 2022, Dongxing Securities decided to terminate the labor relationship between the two parties on January 30, 2022, based on Ye's refusal to accept the company's work arrangements, long-term failure to provide labor, and frequent behavior of being late or leaving early, which has seriously violated labor discipline. The decision to terminate has been confirmed by the union. Ye received a notice of termination on January 31, 2022.

Ye stated that after being significantly reduced in salary by Dongxing Securities, he only has 2680 yuan after tax per month, and his life is in a difficult situation. He cannot demand his salary through litigation. After being unilaterally forced to terminate his labor contract, social security and medical insurance are all interrupted, and he urgently needs to continue to fulfill his labor contract to support his family. He has to protect his legitimate rights and interests through legal means

Company: Employees have been late multiple times

Violation of rules and regulations

In July 2022, the Labor Dispute Arbitration Committee of Xicheng District, Beijing made a ruling, ruling that Dongxing Securities would continue to fulfill its labor contract with Ye. Later, Dongxing Securities disagreed with the ruling and filed a lawsuit with the Xicheng District Court, requesting a ruling that the labor contract with Ye should not be fulfilled.

Dongxing Securities stated that the termination of its labor contract with Ye is a legal termination, on the grounds that Ye arrived at the workstation almost every day around 9 o'clock, knowing the attendance requirements. In January 2022 alone, he was as late as 19 times, seriously violating the rules and regulations.

In addition, Ye had no substantive work from December 2019 to January 2022: he did not arrive on duty from January 2020 to July 2020 due to the epidemic. After returning to the company in July 2020, he refused to work arrangements and never fulfilled his job responsibilities. Dongxing Securities stated that during his tenure, Ye has repeatedly filed labor arbitration and has shown great dissatisfaction and distrust towards the company in the litigation process, and there is no basis for trust between the two parties.

For attendance issues, Dongxing Securities provided 19 surveillance videos, which showed that Ye arrived at his position around 9am, later than normal working hours at 8:30am. Regarding this, Ye claimed that he has already used DingTalk to clock in according to company regulations and usually arrives at the company around 8:25 am. Afterwards, he will engage in activities such as going to the restroom, washing teapots, fetching water, and communicating with colleagues.

Regarding Dongxing Securities' claim of 19 "lateness" incidents in January 2022, Ye stated that the company would confirm attendance with employees every month, but did not verify with them that month. According to DingTalk attendance records, Ye attended for 19 days in January 2022 and was 5 times late for a total of 22 minutes. However, Dongxing Securities stated that DingTalk attendance records can only show Ye's use of DingTalk to clock in, and cannot prove his actual attendance situation.

In the second trial, Dongxing Securities further clarified that the "DingTalk" check-in record cannot display the actual time of arrival. Due to the limitations of the "DingTalk" software, the "DingTalk" office software is set to be able to clock in within 100 meters of the company. The complete video submitted by the company should be used to identify Ye as late and DingTalk as cheating in attendance.

In addition, regarding the videos provided by the company, Ye stated that the means of obtaining the videos were not compliant. The wide-angle camera originally installed in the corner of the wall was moved by the relevant leaders to the position above Ye's head, without informing him during the installation. Ye believed that this was a deliberate attempt by the leaders to undermine his personal dignity. "A specially installed surveillance camera on top of the head, which claims to be absent or late when not seen at the workstation, without asking for specific reasons, suddenly puts on the label of being late or leaving early, which is intentional."

Dongxing Securities stated that the company has installed multiple cameras within its office area for safety reasons and does not target anyone.

Court: Termination for Illegality

Judgment to Continue Performance of Labor Contract

How will the court ultimately determine that both parties have their own opinions?

The first instance court pointed out that the focus of controversy in this case is whether the termination of Dongxing Securities is illegal. Dongxing Securities terminated his labor contract with Ye on the grounds that he refused to accept the company's arrangements, did not provide labor for a long time, and frequently arrived late or left early, seriously violating labor discipline. He should bear the burden of proof for the basis of termination.

According to the facts found in the court trial, Ye did indeed disagree with the company's arrangements for related work, but Dongxing Securities did not provide evidence to prove that his behavior had reached a serious level of disciplinary violation, so the reason for termination is not sufficient.

Regarding the issue of being late, both parties agree that Dongxing Securities will use DingTalk clock in method to confirm attendance, and will organize employees to verify attendance in the following month. Although Dongxing Securities has submitted a surveillance video, the above video can only show that Ye was not at the workstation at 8:30 am on the relevant date, which cannot fully prove the achievement of the company's claim. Ye submitted a DingTalk attendance record as proof of his attendance in January 2022, which showed 5 instances of being late.

The first instance court held that Dongxing Securities lacked a basis for terminating the contract on the grounds that Ye was late for work more than 15 times in January 2022, based on the attendance system. The factual basis for Dongxing Securities to terminate the labor contract with Ye is insufficient, which constitutes illegal termination.

Due to Ye's explicit request to continue fulfilling the labor contract between both parties, the first instance court ruled that Dongxing Securities should continue to fulfill the labor contract with Ye and rejected Dongxing Securities's lawsuit request.

On the basis of confirming the facts in the first review, the second instance court further argued that Dongxing Securities adjusted Ye's job responsibilities during the performance of the labor contract. Although Ye initially refused to adjust the job responsibilities, he later complied with the company's work arrangements and transferred the original work responsibilities and took over the new work responsibilities. Dongxing Securities failed to provide sufficient evidence to prove that Ye refused work arrangements from July 2020 to June 2021, nor was it sufficient to prove that Ye refused to accept company arrangements and did not provide labor for a long time.

At the same time, the second instance court recognized the statement in the first instance that "not appearing at the workstation at 8:30 on a working day does not mean being late", and Dongxing Securities did not verify and confirm the situation with Ye. In the end, the second instance court upheld the first instance judgment and dismissed Dongxing Securities' appeal.

In 2022, the average salary per employee was 490000 yuan

According to public information, Dongxing Securities was established in 2008 and is a national comprehensive securities company approved by the Ministry of Finance and the China Securities Regulatory Commission, initiated by China Eastern Asset Management Co., Ltd. as the main initiator. It was listed on the Shanghai Stock Exchange in February 2015.

Dongxing Securities has a registered capital of 3.232 billion yuan and is headquartered in Beijing. It has 92 branches and securities branches across the country and has five wholly-owned first tier subsidiaries, including Dongxing Futures Co., Ltd., Dongxing Securities Investment Co., Ltd., Dongxing Capital Investment Management Co., Ltd., Dongxing Securities Financial Holdings Co., Ltd., and Dongxing Fund Management Co., Ltd.

As a securities company under the Ministry of Finance, the average salary per employee of Dongxing Securities is not considered low. According to data from Dongfang Wealth Choice, the average salary per employee of Dongxing Securities in 2022 was about 490000 yuan, which is at the mid to upper level among listed securities firms.

In terms of salary policy, Dongxing Securities stated in its 2022 annual report that it attaches great importance to attracting, motivating, and retaining outstanding talents. On the basis of balancing market competitiveness and internal fairness, it provides employees with market-oriented salary benefits, promoting the value co creation and sharing of talent capital and monetary capital. In addition to fully paying the national social insurance and housing provident fund for employees in accordance with the law, we also provide supplementary medical insurance and enterprise annuity for employees, further strengthening their medical and pension security.

In August 2022, the Ministry of Finance issued a "salary restriction order" for state-owned financial enterprises. For senior management personnel in financial enterprises and employees in positions that have a direct or significant impact on risk, the basic salary is generally not more than 35% of the total salary. Performance based compensation will be deferred based on their responsible business income and risk assessment. If the performance based compensation exceeds 40%, it should be deferred payment, and the deferred payment period is generally not less than 3 years.

In 2023, there have been frequent rumors of salary restrictions in the securities industry, with several leading companies reporting adjustments to fixed salaries and bonuses. Some securities firms have yet to issue year-end bonuses. The market will continue to pay attention to which other securities firms are rumored to have "salary cuts" in the future.