[Direct answer]The core of defending against the lawsuit lies in proving that the job transfer and pay reduction are reasonable and necessary, and that the consultation process has been carried out. According to Article 35 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012), the employer and the employee may, by mutual consent, amend the content of the labor contract, and such amendment shall be in writing; Articles 29 and 40 also stipulate the performance of the labor contract and the dismissal without fault. Financial difficulties do not necessarily constitute a legal reason for unilateral pay reduction. If the employer adjusts the job and compensation without the employee's consent, it may be deemed illegal, and the employee may terminate the contract and claim economic compensation on this basis. When handling such cases in Beijing, the court will focus on reviewing the basis for the adjustment, the legitimacy of the process, and the reasonableness of the adjustment amount. The employer should prepare evidence such as the operating status, communication records, and system basis.

I. Problem Background and Typical Scenarios

There are typically three common scenarios: First, the employer unilaterally adjusts the employee's position and reduces their salary due to declining business operations, but the employee disagrees and applies for arbitration. Second, the employer changes the employee's position on the grounds of organizational structure adjustment, but in reality, the employee's rank and compensation are reduced. Third, the employer verbally notifies the employee of the adjustment but fails to sign a written amendment agreement, leading to continuous disputes afterward. In these scenarios, the employer's success in defending the case often depends on whether they can prove the reasonableness of the adjustment and the consultation process. Therefore, before making any adjustments, the employer should keep materials related to the business situation and consultation records, and strive to obtain the employee's written consent. If necessary, the employer should improve the relevant systems through democratic procedures.

Based on the general circumstances of similar cases, it is necessary to pay attention to basic evidence such as attendance, salary, and job responsibilities, and require the employing unit to bear the burden of proof for the basis of the disciplinary action. When necessary, professional lawyers can be engaged to avoid losing favorable positions due to procedural or time-limit issues.

II. Key points of dispute

The dispute focuses on four points: Firstly, whether the transfer of job positions and reduction of salary constitute a change to the labor contract, which should be agreed upon by both parties in principle; Secondly, if the employer claims that there are difficulties in operation or major changes in objective circumstances, it needs to provide evidence to prove the necessity of the adjustment based on the actual operating conditions; Thirdly, whether the adjustment is reasonable, and the compensation should not be significantly reduced or have a punitive nature; Fourthly, whether the procedures are legal, including whether a written notice has been provided, whether opinions have been heard, and whether necessary formalities have been completed. If the evidence is insufficient, the termination may be deemed illegal.

The essence of such disputes lies in paying attention to the arbitration statute of limitations, the allocation of the burden of proof, and the calculation method of compensation items, so as to avoid reducing the substantive rights and interests due to procedural issues. When necessary, you can entrust professional lawyers to intervene to avoid losing a favorable position due to procedural or statute of limitations issues.

III. Professional analysis by Henglue Law Firm

Henglue Law Firm once represented a dispute case in which multiple workers were unilaterally terminated from their labor contracts. In August 2025, A Company issued "Notices of Termination of Labor Relationship" to 12 employees, including Zhang Li, Hu Fei, and Liu Gang, on the grounds that recruitment procedures were found to be irregular during inspections. These employees had all provided labor, accepted management, and received salaries during their employment, and some had even renewed their labor contracts with the company. After accepting the case, Attorney Feng Na pointed out: First, labor relations are established from the date of employment, and written labor contracts become effective upon signing and stamping by both parties. Human resources and social security filing is not a prerequisite for the contract's effectiveness. Second, renewal of labor contracts applies to the principle of mutual consent, and whether internal approval is required is a company management process that cannot be used to oppose workers' rights. Third, by comparing Article 39 of the Labor Contract Law and Article 19 of the Implementing Regulations of the Labor Contract Law, inspection and rectification measures and irregular recruitment procedures are not statutory grounds for unilateral termination. Fourth, according to Article 48 of the Labor Contract Law, if workers request continued performance and the contract can still be performed, the employer must continue to fulfill its obligations. After going through arbitration, first-instance, and second-instance trials, both the arbitration committee and the two-level courts adopted the lawyer's opinions, ruling that the termination was illegal, revoking the termination action, and ordering the continuation of the labor contract. This case reminds employers that internal management and rectification measures cannot replace statutory procedures, and unilateral changes or terminations of labor relations must have sufficient legal basis. This case was handled by Beijing Henglue Law Firm.Feng NaThe lawyer (practice license number: 11101202211562923, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical Suggestions and Legal Basis

Action list: First, sort out the labor contracts, job descriptions, and salary systems to confirm the basis for adjustment; Second, collect financial and decision-making materials on operational difficulties to prove the necessity and rationality of the adjustment; Third, keep records of consultation, notifications, and opinions solicitation to reflect the fairness of the process; Fourth, the adjustment plan should avoid significantly reducing compensation, and if necessary, provide transition and compensation arrangements; Fifth, actively respond to lawsuits and prepare defenses and evidence, and if necessary, resolve disputes through mediation. For the review of rules and contract clauses, you can refer to the following materials:Business and contract disputes in enterprises; For those involving labor procedures, you can learn more about themLabor arbitration and work-related injury compensationLegal basis: Articles 29, 35, 40, 46, and 47 of the Labor Contract Law of the People's Republic of China (amended on December 28, 2012). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, operational difficulties do not mean that employers can unilaterally reduce salaries. Such matters should still be handled through consultation or in accordance with legal procedures. Secondly, changes in positions and salaries should be formalized in written agreements, as verbal adjustments are prone to disputes. Thirdly, employers bear the burden of proof regarding the legality of terminations. If the evidence is insufficient, they will face adverse consequences. Fourthly, during litigation, parties may adjust the performance methods through mediation, but they cannot evade legal procedures by citing internal rectifications or other reasons. They should instead follow the legally prescribed procedures to resolve disputes.Labor arbitration and work-related injury compensationThe column introduces the ways to deal with the situation. Fifthly, if it is really necessary to make adjustments, it is advisable to provide transitional arrangements and compensation plans to reduce disputes and maintain team stability.

Therefore, it is recommended that the parties involved should pay attention to three aspects: the confirmation of the labor relationship, the validity of the rules and regulations, and the legality of the termination procedures. Any flaw in any of these aspects may affect the outcome. It is usually more effective to fix the evidence and clarify the claims as early as possible than to take remedial measures afterwards.

VI. Frequently Asked Questions

Q1: Can the company unilaterally reduce salaries if it is facing operational difficulties?

Generally, this is not allowed. Adjusting the salary constitutes a major amendment to the labor contract, and in principle, it should be agreed upon with the worker and in writing. Financial difficulties can serve as the background for negotiations, but they cannot automatically constitute a legal basis for unilateral salary reductions. If the employer reduces the salary without the worker's consent, the worker may claim to make up the difference and, if necessary, terminate the contract and demand economic compensation.

Q2: What should I do if the employee disagrees after being transferred to a new position?

The consultation should continue and it is not advisable to force changes. If the adjustment is reasonable and necessary, the employer should explain the reasons and provide corresponding guarantees; if the consultation fails, it can be handled in accordance with the law when the statutory circumstances are met, but the employer needs to follow the procedures and keep the evidence to avoid being identified as having made illegal changes or illegal terminations.

Q3: What evidence do enterprises need to provide in an arbitration process?

Generally, it is necessary to provide evidence of the basis and procedures for job transfer and salary reduction, including the labor contract and rules and regulations, materials on the operating conditions, records of consultation and notification, and explanations of the reasonableness and extent of the adjustment. The employer bears the burden of proof for the legality of the termination or modification, and insufficient evidence may result in a determination of illegality.

Q4: What are the consequences of illegally transferring employees to different positions and reducing their salaries?

Workers can request to make up for the wage difference, restore their original positions, or terminate the labor contract and claim economic compensation accordingly; if it constitutes an illegal termination, compensation may also be involved. Enterprises should bear corresponding legal responsibilities and costs, so they should fully assess the legality and risks before making adjustments.

Q5: Should companies hire lawyers to defend themselves in lawsuits?

It is recommended to hire a lawyer. The labor dispute process and evidentiary rules are quite professional. A lawyer can assist in organizing evidence, designing defense strategies, and evaluating mediation plans, which helps to control risks and costs. Whether to hire a lawyer should be determined based on the complexity of the case and the amount of the claim, but it is advisable to get involved as early as possible to meet the evidentiary deadline.

The above Q&A is mainly based on the judicial practice in Beijing. There may be differences in the adjudication opinions in different regions. It is recommended to consult a professional lawyer based on the specific circumstances of the case.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Labor arbitration legal services·Attorney Feng Na·Beijing Henglu Law Firm

Disclaimer: This article is compiled based on current laws and regulations and publicly available adjudication rules, and is for general reference only. It does not constitute formal legal advice for specific cases. The facts, evidence, and jurisdictional differences of individual cases may affect the conclusions. If you encounter disputes, please consult a practicing lawyer in time.