[Direct answer]In the Beijing area, the standard practice is to first negotiate changes, and only if the negotiations fail can the contract be legally terminated. According to Article 40(3) of the Labor Contract Law of the People's Republic of China (amended in 2012), if there are major changes in the objective circumstances on which the labor contract is based, making it impossible to perform the contract, and after the employer and the employee fail to reach an agreement on amending the content of the labor contract through consultation, the employer may terminate the labor contract by giving the employee written notice 30 days in advance or by paying the employee an additional month's salary. At the same time, according to Articles 46 and 47, the employer shall pay the employee economic compensation. The economic compensation shall be paid to the employee at the standard of one month's salary for each year of service in the unit, and for a period of more than six months but less than one year, it shall be calculated as one year; for a period of less than six months, it shall be paid at the standard of half a month's salary. Therefore, the department's abolition does not mean that the company can arbitrarily dismiss employees. The company should first provide reasonable job arrangements and consult with employees, and may not take the opportunity to unilaterally reduce salaries significantly or directly terminate the contract.

1. Problem background and typical scenarios

It's a common situation for companies to disband entire departments due to business contraction or organizational adjustments. In practice, some companies directly notify employees to leave after disbanding a department, without either negotiating job transfers or paying economic compensation; some propose job transfers but assign employees to positions with vastly different compensation levels or ones that are severely mismatched with their abilities, effectively forcing employees to leave; and some cite "major changes in objective circumstances" as the pretext for layoffs, but fail to meet the statutory conditions. When handling such cases in the Beijing area, arbitration tribunals and courts will review whether the department's disbanding is genuine, whether the consultation process was carried out, whether the job transfer arrangements are reasonable, and whether the terminations comply with statutory conditions and compensation standards, in order to determine whether the company's actions are legal. Understanding statutory procedures and compensation rules can help employees safeguard their rights and interests during such changes.

II. Key points of contention

First, whether the department's dissolution constitutes a significant change in objective circumstances. Second, the procedural requirements and reasonable standards for negotiating job changes. Third, the option of providing advance notice or paying an additional month's salary upon termination. Fourth, the calculation basis and service period for economic compensation. Fifth, the legal consequences of the company directly terminating the contract without following the proper procedures.

III. Professional analysis by Henglue Lawyers

Henglue Lawyers believe that the disputes arising from the department's dissolution mainly focus on "whether the consultation process was carried out" and "whether the compensation was paid according to law". According to Article 40(3) of the Labor Contract Law of the People's Republic of China (amended in 2012), if the contract is terminated on the grounds of major changes in objective circumstances, the employer must first negotiate with the employee to modify the content of the labor contract. If no agreement is reached, the contract may be terminated, and the employer must give written notice 30 days in advance or pay an additional month's salary, while also paying economic compensation. In practice, common irregular practices of companies include: only verbally notifying employees of the department's dissolution and requiring them to leave within a specified period; proposing unreasonable job transfers, such as demotion or salary reduction, or assigning them to positions in remote suburbs that do not match their abilities; and requiring employees to sign resignation applications under the guise of "consultation" to evade compensation responsibilities. Employees should pay attention to three points when dealing with such situations: first, require the company to provide a written explanation of the department's dissolution and job arrangement plans; second, express clear objections to unreasonable job transfers and keep records; third, calculate their work years and average monthly salary to claim the economic compensation they are entitled to according to law. If the company terminates the contract illegally, employees can also claim to continue performing the contract or be compensated with twice the amount of economic compensation. The specific application must be determined based on the facts of the case and the currently effective laws and regulations. 恒略律师认为，部门撤销引发的争议主要集中在“是否履行协商程序”与“补偿是否依法支付”上。依《中华人民共和国劳动合同法》（2012年修正）第四十条第三项，以客观情况重大变化为由解除合同，必须先与劳动者协商变更劳动合同内容，协商不成才可解除，并须提前三十日书面通知或者额外支付一个月工资，同时支付经济补偿。实务中，公司常见的不规范做法包括：仅口头通知员工部门撤销、要求限期离职；提出的调岗明显不合理，如降级降薪或安排到远郊、与能力不符的岗位；以 “协商” 为名要求员工自行签署离职申请，规避补偿责任。员工应对时应把握三点：一是要求公司书面说明部门撤销与岗位安排方案；二是对不合理调岗明确表达异议并保留记录；三是核算工作年限与月平均工资，主张依法应得的经济补偿。若公司违法解除，还可主张继续履行合同或者按经济补偿标准二倍支付赔偿金。具体适用须结合个案事实与现行有效法律法规判断。

IV. Practical suggestions and legal basis

Action list: First, check the provisions of the labor contract regarding the position and work location, and evaluate the reasonableness of the job transfer plan; Second, require the company to issue a written notice of the job arrangement and the intention to terminate the contract, and keep all communication records; Third, raise objections to unreasonable job transfers in a timely manner and not sign a resignation application easily; Fourth, calculate the length of service in the unit and the average monthly salary during the 12 months preceding the termination to determine the amount of compensation; Fifth, if no agreement is reached with the company, apply for labor arbitration within the one-year arbitration statute of limitations to claim economic compensation or damages. For issues related to labor and work-related injuries, you can refer to the relevant provisions.Labor disputes and work-related injury compensationAndSpecial servicesLegal basis: Articles 40, 46, 47, and 48 of the Labor Contract Law of the People's Republic of China (amended in 2012), and Article 87 of the same law; Articles 6 and 27 of the Labor Dispute Mediation and Arbitration Law of the People's Republic of China. The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglu Law Firm's Advice

Firstly, the department's dissolution does not mean that employees can be dismissed directly. It is necessary to negotiate a change of position with them first. Secondly, the transfer plan should be reasonable. Employees have the right to refuse arrangements that involve a significant reduction in salary or a demotion. Thirdly, the employer must pay economic compensation in accordance with the law when terminating the employment contract. If the compensation is not paid, the employee can claim it through arbitration. Fourthly, employees should not easily sign an application for "resignation due to personal reasons", so as to avoid losing the right to claim compensation. For issues related to labor and work-related injuries, employees can seek legal assistance through relevant channels.Labor disputes and work-related injury compensationThe service provides a comprehensive solution, which involves the adjustment of the enterprise architecture and the compliance with relevant regulations, and the two can be integrated with each otherBusiness and contract disputes in enterprisesFor the enforcement of compensation payments, you can refer to the following cases for reference:Creditor's rights and debts, and enforcementFor questions regarding work-related injuries and personal injury cases, please feel free to consult us.Personal injury and medical disputes.

VI. Frequently Asked Questions

Q1: Can the company directly dismiss employees after the department is abolished?

It is not allowed to dismiss an employee directly. According to Article 40(3) of the Labor Contract Law of the People's Republic of China (amended in 2012), the employer should first negotiate with the employee to modify the content of the labor contract. If no agreement can be reached, the employer may terminate the contract by giving the employee a written notice 30 days in advance or by paying an additional month's salary, and shall pay the employee economic compensation in accordance with the law.

Q2: What should I do if the new position arranged by the company is unreasonable?

An employee may file a written objection. The transfer of a job position should be reasonable. If the new position involves a significant decrease in salary, a reduction in job level, or a serious mismatch with the employee's capabilities, the employee has the right to refuse. At the same time, the employee should continue to provide labor as required or engage in negotiations, maintain all communication records, and avoid being deemed as absent without leave.

Q3: How much compensation will I receive if my department is dissolved and I'm dismissed?

The economic compensation shall be paid at the rate of one month's salary for each year of service in the unit; for a period of more than six months but less than one year, it shall be calculated as one year; and for a period of less than six months, it shall be paid at the rate of half a month's salary. The monthly salary shall be calculated based on the average salary of the last twelve months before the termination of the employment contract. For those whose monthly salary exceeds three times the local social average wage, it shall be calculated at the rate of three times the average wage, but not exceeding twelve months' salary.

Q4: Is it legal for the company not to give a 30-day notice in advance?

If the company fails to provide written notice 30 days in advance, the employee may choose to receive an additional month's salary as compensation in lieu of notice, whichever they prefer. If the company neither provides advance notice nor pays the additional month's salary, the termination process will be flawed, and the employee may claim corresponding rights.

Q5: What should I do if the company refuses to pay compensation?

You can first negotiate with the company and request them to provide a written conclusion. If no agreement is reached, you can file a labor arbitration claim within the one-year arbitration statute of limitations to demand economic compensation. If the termination is deemed illegal, you can claim to continue performing the contract or request the company to pay compensation at twice the standard of economic compensation. If the company still fails to comply with the arbitration decision, you can apply for forced enforcement.

The above answer is based on the judicial practice in Beijing. The judicial interpretations in other provinces and cities may vary. For specific cases, please refer to the local rules and evidence situations.

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

Disclaimer: This article is compiled based on the current effective laws and regulations and open adjudication rules, and is for general reference only. It does not constitute a formal legal opinion on 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.