[Case Summary]This case involves a labor dispute. The employee, Li ** (technical position, with a base salary of 35,000 yuan per month and a performance bonus of 5,000 yuan per quarter), alleges that Beijing A Technology Co., Ltd. has defaulted on the annual performance bonuses, the compensation for the unlawful termination of the employment relationship, and the unpaid annual leave wages. The core disputes between the parties are: whether the company has fulfilled the statutory pre-procedure of reporting to the labor administrative department for "economic layoffs"; whether the annual performance of 110,000 yuan stipulated in the employment offer is binding on both parties; and how the unpaid annual leave wages should be calculated in accordance with the law. Beijing Hengluo Law FirmFeng NaAfter the lawyer took over the case, he comprehensively secured key evidence such as the employment offer, recordings of communication with HR about performance bonuses, pay slips, and termination notices. Despite the unfavorable situation where the arbitration rejected the client's request for annual performance bonuses, the first-instance court successfully helped the client recover 260,143.69 yuan in annual performance bonuses, a compensation of 137,726.7 yuan for unlawful termination, and 12,675.02 yuan in unpaid annual leave wages. The client's core claims were upheld by the court.

I. Review of the case

Many workers encounter such confusion: if the company dismisses employees by citing "operational difficulties and economic layoffs," how should they be compensated for the illegal termination of the labor contract? Should the annual performance bonuses be paid? On November 17, 2022, Li * * * joined Beijing A Technology Co., Ltd. and the two parties signed a labor contract with a term from November 17, 2022 to November 16, 2025, stipulating a probationary period of 6 months and a salary standard of 35,000 yuan per month plus a performance bonus of 5,000 yuan per quarter. Before joining the company, A Company sent an offer that clearly stipulated an annual salary of 550,000 yuan, including a fixed year-end performance bonus of 110,000 yuan each year.

After Li Moumou joined the company, the business development was not smooth due to the pandemic, and the projects he was mainly responsible for were still ongoing. Considering the company's operating situation, the company did not force him to settle the payment according to the time schedule, but he verbally raised his demands for performance bonuses several times during his employment. On February 17 and 18, 2025, he had a detailed communication with the company's HR, Zhuang Moumou, about the year-end fixed bonuses. In the recording, the company acknowledged the terms of the offer, but refused to pay the bonuses on the grounds that Li Moumou had not participated in the actual performance evaluation and the company was experiencing losses.

On March 19, 2025, Company A proposed to terminate the employment relationship on the grounds of "economic layoffs" and paid the employee a severance compensation of 9,2008 yuan. Li * * * believed that the layoff had not been reported to the labor administrative department, did not comply with legal procedures, and was an illegal termination. At the same time, he demanded that the company pay the annual performance bonuses according to the offer. On April 10, 2025, Li * * * applied for arbitration to the Beijing Chaoyang District Labor and Personnel Dispute Arbitration Committee. The arbitration committee issued the No. [2025] 2XXX0 arbitration award, confirming that a labor relationship existed between the two parties, and ruled that Company A should pay the employee 18,602 yuan in unpaid annual leave wages and 91,821 yuan in compensation for illegal termination, while rejecting Li * * *'s other claims.

Both parties were not satisfied with the arbitration award and appealed to the People's Court of Chaoyang District in Beijing. Li * appointed Beijing Henglu Law Firm to handle the case on his behalf.Feng NaThe lawyer helped protect the client's rights. Company A then filed a lawsuit, requesting that it not be required to pay the unpaid annual leave wages (only agreeing to pay 3 days corresponding to 10,146.28 yuan) and the unpaid compensation for illegal dismissal, which amounted to 91,821 yuan.

II. The focus of the case

  • Resolving the legal disputes: Whether Company A has completed the statutory pre-procedures for reporting "economic layoffs" to the labor administrative department, whether it constitutes illegal dismissal, and whether the economic compensation paid can offset the difference in the 2N compensation amount.
  • Annual performance bonus dispute: Whether the annual performance of 110,000 yuan stipulated in the offer is binding on both parties, whether arriving late for one day results in the offer becoming invalid, and whether the company's operating losses can be used as a reason for refusing to pay the bonus.
  • Dispute over unpaid annual leave wages: How to determine the remaining number of unpaid annual leave days confirmed by both parties and the statutory accounting standards.

III. Professional intervention by Hengluo Lawyers

Both parties' arguments and defenses:Company A claimed that the layoffs were legal, there was no agreement on annual performance bonuses, and the amount of unpaid annual leave wages was too high, so it requested not to pay the corresponding amounts. However, Li * argued that the layoff process was illegal, the performance bonus agreement in the offer was valid, and the annual leave wages should be calculated according to the statutory standards.

Attorney Feng Na's Legal Opinion:

(I) Regarding the nature of the termination: According to Article 41 of the Labor Contract Law, the employer shall report the layoff plan to the labor administrative department in the case of economic layoffs. This preliminary procedure is a statutory requirement. A Company's filing materials were returned by mail, and the legal and effective reporting procedures were not completed. The human resources and social security department also did not issue a formal receipt for acceptance. The argument that "since the termination has already taken place, there's no need to report it" cannot exempt the employer from the obligation to comply with legal procedures. The lack of proper procedures renders the layoffs legally invalid and constitutes an illegal termination. The economic compensation already paid should be deducted when calculating the 2N compensation, and the company should make up the difference.

(II) Regarding the annual performance bonus: The employment offer is an offer from the employer, and Li * * * accepted it and actually joined the company. Although he reported for duty one day late, the labor relationship was established and effective. The salary agreed in the offer is legally binding on both parties. The fact that the labor contract does not stipulate an annual performance bonus does not mean that the offer agreement is cancelled. The company has no evidence to prove that the two parties agreed to modify or abolish this clause. The audio record of the personnel communication proves that the company knew about the agreement and only refused to pay it because of losses. The operational losses are the employer's own risks, which cannot be transferred to the workers. The annual performance bonus should be paid according to the actual working time.

(III) Regarding the unpaid annual leave salary: Based on the number of annual leave days confirmed by both parties and the records of leave taken, distinguish between annual accounting and claim the legitimate unpaid annual leave salary in accordance with the "Implementation Measures for Paid Annual Leave of Enterprise Employees". Attorney Feng Na also sorted and organized all the evidence of the case, and prepared cross-examination opinions for the defendant's objections one by one. The trial fully debated the focus issues such as the validity of the offer, the statutory procedures for layoffs, and the composition of wages.

IV. Outcome of the case

The People's Court of Chaoyang District, Beijing City ruled in the first instance: It is confirmed that from November 17, 2022 to March 28, 2025, Li ** had a labor relationship with Beijing A Technology Co., Ltd.; A Company shall, within seven days after the judgment takes effect, pay Li ** an annual performance bonus of 260,143.69 yuan, a compensation for the illegal termination of the labor relationship of 137,726.7 yuan, and an unpaid annual leave salary of 12,675.02 yuan; and rejects the other litigation requests of both parties.

The court accepted Li's claim that he was entitled to an annual performance bonus, which was calculated according to his actual working time; it determined that reporting the layoff plan to the labor administrative department is a statutory pre-procedure, and A Company's failure to complete this pre-procedure constituted an illegal termination. The court ordered A Company to deduct the already paid economic compensation and make up the difference; and calculated the wage for the remaining three days of unpaid annual leave according to the statutory standards. The core legal basis for this ruling includes Articles 41, 47, 48, and 87 of the Labor Contract Law, as well as the Labor Dispute Mediation and Arbitration Law and the Implementing Measures for Paid Annual Leave for Enterprise Employees.

5. Henglu Law Firm's Reminder

Economic layoffs must meet five conditions simultaneously: the entity must meet one of the statutory circumstances; lay off more than 20 employees or less than 20 employees but more than 10% of the total number of employees; notify the trade union or all employees of the situation 30 days in advance; listen to the opinions of the trade union or employees and report the plan to the labor administrative department; and pay economic compensation in accordance with the law. Only when all five conditions are met is the layoff legal. If one of the conditions is not met, it constitutes an illegal termination with 2N compensation.

This case is handled by Beijing Henglu Law Firm.Feng NaThe attorney (practice certificate number: 11101202211562923, subject to the certificate issued by the judicial administrative organ) acts as the agent.

VI. Common Questions About Labor Arbitration Cases - FAQ

  1. Q: The company said they're laying me off due to "economic redundancy". How much compensation will I receive for the unlawful termination of my labor contract? A: If the company failed to fulfill legal pre-procedures such as reporting to the labor administrative department, the termination would be considered unlawful, and you're entitled to 2N compensation. The economic compensation you've already received can be deducted from the total amount of compensation.
  2. Q: The employment offer states that there will be a year-end performance bonus, but the contract doesn't mention it. Should the annual performance bonus still be paid? A: The offer is legally binding for both parties. Just because the labor contract doesn't mention it doesn't mean it's been canceled. The company should calculate and pay the bonus based on the actual length of employment.
  3. Q: Can the company not issue performance bonuses if the company suffers a loss? A: Operational losses are the employer's own risk, and cannot be transferred to the workers. The employer cannot use this as an excuse to refuse to fulfill the salary agreement.
  4. Q: How is the salary for unused annual leave calculated? A: According to the "Implementation Measures for Paid Annual Leave for Enterprise Employees", it is paid at 300% of the daily wage (or 200% if including the normal salary, plus additional compensation), and the remaining unused days are calculated accordingly.
  5. Q: If the arbitration doesn't support my request, can I still sue? A: Except in the case of a final arbitration award, if a worker is not satisfied with the arbitration decision, they can file a lawsuit with the court within 15 days of receiving the arbitration award.