[Case Summary]This case involves a labor dispute. Wang Xiaodan joined Anhui B Network Group Co., Ltd. on August 12, 2011. On October 1, 2023, through a tripartite "Amendment Agreement", the subject of the labor contract was changed to Beijing A Cultural Development Co., Ltd., with no substantial changes in the position, content, or location. Later, due to the two companies' joint employment and continuous wage arrears, Wang Xiaodan sent a "Notice of Forced Termination of the Labor Contract" in accordance with Article 38 of the Labor Contract Law of the People's Republic of China to terminate the labor relationship and claim economic compensation. Beijing Henglu Law FirmShang JiangpengThe lawyer represented this case, with the core disputes being whether the nature of the resignation was "forced termination" or "voluntary resignation", and whether the working years should be calculated consecutively. The applicable laws are Article 38 and Article 47 of the Labor Contract Law of the People's Republic of China, and Article 50 of the Labor Law of the People's Republic of China. In the end, it was determined that the working years were calculated consecutively for 14 years, and Company A paid 96,000 yuan in economic compensation for the termination of the labor contract.

I. Review of the Case

Many workers search for terms like "How to calculate the length of service when the subject of the labor contract changes", "Is there compensation for being forced to terminate the labor contract", and "What to do if the company mixes employment and defaults on wages". Wang Xiaodan joined B Network Group on August 12, 2011, and served as a supervisor. Later, her contract was converted to a non-fixed-term labor contract. On October 1, 2023, after consultation among B Company, Wang Xiaodan, and A Company, the three parties signed a "Amendment Agreement", changing the subject of the labor contract from B Company to A Company, while keeping all other terms of the original contract unchanged. There were no substantial changes to the job position, duties, or work location.

After joining Company A, there was a situation of confused employment between Company A and Company B, and neither of them paid the salaries in full. From March to June 2025, Company A continuously defaulted on the payment of salaries and refused to pay them despite being reminded. On June 26, 2025, Wang Xiaodan mailed a "Notice of Forced Termination of Labor Contract" to Company A in accordance with the law, citing "the employer's failure to pay the labor remuneration in full and on time" as the reason for termination in accordance with Article 38 of the Labor Contract Law of the People's Republic of China. Subsequently, she applied for labor arbitration. On October 31, 2025, the Beijing Fengtai District Labor and Personnel Dispute Arbitration Committee issued the Arbitration Award No. XXXXIV, ruling that Company A should pay Wang Xiaodan an economic compensation of 96,000 yuan for the termination of the labor contract, among other things.

II. The focus of the case

  • Focus 1: Is the nature of the resignation "forced termination" or "voluntary resignation"?Company A argued that since the employee resigned voluntarily, no compensation should be paid. The lawyer, however, argued that the employee was forced to terminate the contract due to the company's failure to pay wages on time, and therefore compensation should be paid.
  • Focus II: Should the length of service be calculated continuously?Company A claimed that the employee was only transferred in October 2023 and had been employed for less than two years; the lawyer argued that the employee was not assigned to the new employer for reasons beyond his/her control, and his/her working years should be calculated continuously with Company B, totaling 14 years.
  • Focus 3: Calculation standards for economic compensation.The average pre-tax salary in the 12 months prior to leaving the job was 8,000 yuan, which, based on a continuous work tenure of 14 years, amounts to 96,000 yuan.

III. The professional intervention of Hengluo Law Firm

The party concerned (the worker) claimed that:Wang Xiaodan claimed that she was forced to terminate the labor contract in accordance with Article 38 of the Labor Contract Law because A and B Companies had long been in arrears with her wages, rather than resigning voluntarily. She also argued that her working years should be counted continuously, and demanded that the two companies pay her the arrears in wages and economic compensation totaling 96,000 yuan.

The other party's (the employer's) position:Company A put forward two claims to the court: Firstly, Wang Xiaodan's request for termination on June 26, 2025 was a voluntary resignation, which did not meet the statutory conditions for paying economic compensation; Secondly, Wang Xiaodan was only transferred in October 2023. Even if compensation was required, it should only be calculated based on a two-year period. The arbitration court's calculation of 14 years was a mistake in both fact and standard. Therefore, Company A requested the court to revoke the arbitration award on economic compensation.

Legal Opinion from Hengluo Law Firm:Shang JiangpengAfter accepting the case, the lawyer comprehensively reviewed the evidence and accurately applied the law, always adhering to the core representation opinion and ultimately being adopted by the court: the defendant was forced to terminate the employment rather than voluntarily resign, and the plaintiff should pay economic compensation; the defendant's working years with the plaintiff should be counted continuously with his/her working years with Company B. The lawyer pointed out that if a worker is arranged to work at a new employer by the original employer without the worker's fault, and the original employer fails to pay economic compensation, the worker may terminate the labor contract with the new employer in accordance with Article 38 of the Labor Contract Law, and the working years with the original employer should be counted together when calculating the period of economic compensation.

IV. Outcome of the case

The court held that workers' legitimate rights and interests are protected by law. According to Article 50 of the Labor Law of the People's Republic of China, and based on the facts established in the case, A Company indeed failed to pay wages on time and in full. Therefore, Wang Xiaodan could terminate the contract and request economic compensation. The court adopted the lawyer's opinion and determined that Wang Xiaodan's working years at B Company and A Company should be calculated consecutively. Her average pre-tax salary in the 12 months prior to her departure was 8,000 yuan. Based on a 14-year working history, A Company should pay her 96,000 yuan in economic compensation for terminating the labor contract and issue a certificate of termination of the labor contract.

5. Henglu Law Firm's Reminder

This case is represented by Attorney Shang Jiangpeng of Beijing Henglu Law Firm (practice certificate number: 11101202310580738, subject to the document issued by the judicial administrative organ). Where the subject of the labor contract is changed through a tripartite agreement, and the job position and content have not undergone substantial changes, and the worker is not assigned to a new employing unit due to his/her own reasons, and the original employing unit fails to pay economic compensation, the length of service should be calculated continuously when calculating the economic compensation. Where the employing unit confuses employment and defaults on wages, the worker may, in accordance with Article 38 of the Labor Contract Law of the People's Republic of China, propose to terminate the contract by force and claim compensation. It is necessary to keep evidence such as the reminder and the notice of termination.

VI. Common Questions About Labor Disputes FAQ

  1. Q: Do the previous years of work experience still count after the subject of the labor contract has changed?
    A:If an employee is transferred from the original employer to a new employer for reasons not attributable to the employee himself/herself, and the original employer fails to pay the employee economic compensation, the length of service with the original employer shall be cumulated when calculating the economic compensation.
  2. Q: If the company is in arrears with wages and I resign voluntarily, can I still claim compensation?
    A:If the employer fails to pay the worker's wages in full and on time, and the worker terminates the contract in accordance with Article 38 of the Labor Contract Law of the People's Republic of China, it is considered a "forced termination", and the employer should pay the worker economic compensation.
  3. Q: If the two companies confuse their employees, who should be asked to compensate them?
    A:Where there is confusion over employment, the worker may require the relevant companies to jointly assume responsibility. The lawyer will identify the responsible party based on the contract, wage payments, and actual management.
  4. Q: What is the standard for calculating economic compensation?
    A:According to the length of service in this unit, one month's salary shall be paid for each completed year of service; for those with a service period of more than six months but less than one year, it shall be calculated as one year; and for those with a service period of less than six months, half a month's salary shall be paid.
  5. Q: How can I effectively terminate the contract under duress?
    A:It is necessary to send a written notice (such as mailing the "Notice of Forced Termination of Labor Contract") to clarify the legal grounds for termination, such as "failure to pay labor remuneration in full and on time", and to keep the delivery receipt to avoid being deemed as having resigned voluntarily.