[Direct answer]In the Beijing area, the compensation standards for both types of terminations are essentially the same. According to Articles 46 and 47 of the Labor Contract Law of the People's Republic of China (amended in 2012), both qualified terminations and layoffs should pay economic compensation based on the employee's length of service in the unit. For each completed year of service, one month's salary shall be paid; 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, half a month's salary shall be paid. If the monthly salary is more than three times the average monthly salary of employees in the employing unit's region in the previous year, the compensation shall be calculated at three times the average monthly salary, and the maximum service period shall not exceed 12 years. The difference lies in the applicable conditions and procedures: economic layoffs must meet the circumstances and numerical thresholds specified in Article 41 and follow the procedures of explanation, hearing opinions, and reporting; ordinary terminations shall be handled in accordance with the circumstances specified in Article 40 and Article 36, etc., and in some cases, a 30-day notice or severance pay shall be required. In addition, regardless of the type of termination, the prerequisite for claiming compensation are that there must be an employment relationship between the employer and the employee.

1. Problem background and typical scenarios

There are often disputes between enterprises and employees over compensation standards. Typical scenarios include: the enterprise terminates the employment relationship under the guise of layoffs but fails to comply with legal procedures, and the employee questions whether the compensation will be affected; the employee believes that the compensation for layoffs should be higher than that for ordinary terminations; there are disputes over whether to pay severance pay due to different termination circumstances; and there are disputes over whether the cooperation between the employer and the employee constitutes an employment relationship, which directly affects whether the compensation claim can be established. When handling labor dispute cases in Beijing, the uniformity of compensation standards and the legality of the termination procedures are two different levels of review content.

II. Key points of contention

First, whether the compensation for layoffs is consistent with the standard for ordinary termination. Second, under what circumstances is the compensation for notice applicable. Third, whether the illegal procedures affect the amount of compensation. Fourth, how to determine the calculation basis and length of service for economic compensation. Fifth, how to judge whether a labor relationship exists. Sixth, the differences in standards between consensual termination and statutory termination.

III. Professional analysis by Henglue Law Firm

Henglue Lawyers once handled a labor dispute case: Liu Lei participated in the start-up of a company as the technical chief, and the two parties signed a "Cooperative Operation Agreement", under which Liu Lei held a 20% virtual equity stake. However, no labor contract was signed and no salary was paid. Later, Liu Lei unilaterally terminated the cooperation and claimed a total of 2.12 million yuan in wages and economic compensation. The company entrusted our lawyers to represent it, arguing that the two parties were only in a cooperative relationship and not an employment relationship. The first-instance court ruled that there was no employment relationship between the two parties and dismissed all of Liu Lei's claims. After Liu Lei appealed, the lawyers focused their defense on the issues of personal dependence and economic subordination, pointing out that Liu Lei controlled the company as a co-founder, far exceeding the degree of subordination of ordinary workers. The failure to pay social insurance was only an auxiliary judgment factor. In the end, the second-instance court dismissed the appeal and upheld the original judgment, successfully rejecting the other party's claim of 2.12 million yuan. This case shows that whether the standard of economic compensation and redundancy compensation is calculated, it is premised on the existence of an employment relationship between the two parties. If the nature of the subject is a cooperation rather than employment, the relevant claims will not be established. Those involved in labor disputes can refer to this case for reference.Labor arbitration and work-related injury compensationThis is a column. The case is handled by Beijing Henglu Law Firm.Xue SuhuaThe attorney (practice license number: 11101201211769926, subject to the document issued by the judicial administrative organ) acts as the agent.

IV. Practical suggestions and legal basis

Action list: First, confirm the nature of the termination and the applicable provisions to determine whether it belongs to economic layoffs or ordinary terminations; Second, check the length of service and the average monthly wage in the twelve months preceding the termination to calculate the economic compensation; Third, pay attention to whether it is necessary to pay the notice period compensation or there is a double compensation for illegal termination; Fourth, keep evidence such as labor contracts, pay slips, social insurance records, and termination notices; Fifth, if there are objections to the nature or standards of the termination, apply for labor arbitration in a timely manner. For labor disputes, you can refer to the relevant provisions.Labor arbitration and work-related injury compensation; Those involving cooperation agreements and equity arrangements can be combined togetherBusiness and contract disputes in enterprisesColumn. Legal basis: Article 36, Article 40, Article 41, Article 46, Article 47, and Article 87 of the Labor Contract Law of the People's Republic of China (amended in 2012). The specific application shall be subject to the currently effective laws, regulations, and judicial rulings.

5. Henglue Law Firm's Reminder

Firstly, the compensation standards are generally consistent, with the main differences lying in the conditions and procedures. Secondly, procedural violations may render the termination of the employment relationship invalid, thereby creating the risk of double compensation. Thirdly, claiming compensation requires the existence of an employment relationship as a prerequisite, and cooperation agreements cannot be equated with employment contracts. Fourthly, the circumstances under which severance pay and compensation apply are different, and they should be accurately distinguished. If you are currently facing similar issues, you can seek assistance throughLabor arbitration and work-related injury compensationYou will receive a comprehensive service solution, which can be integrated with your corporate agreements.Business and contract disputes in enterprises板块。

VI. Frequently Asked Questions

Q1: Is the compensation for layoffs higher than that for ordinary terminations?

This is not necessarily the case. Both apply Article 47 of the Labor Contract Law of the People's Republic of China to calculate the compensation standard based on the length of service and the average monthly salary. The main differences lie in the conditions and procedures for termination, and whether the employer needs to pay severance pay. If the termination is deemed illegal, the worker can claim compensation twice the amount of the economic compensation standard, and the amount in this case may be significantly higher.

Q2: Under what circumstances do I need to pay the advance notice fee?

Under the circumstances where the employment contract is terminated in accordance with Article 40 and the employer fails to notify the employee in writing 30 days in advance, the employer shall pay an additional one-month's salary, commonly known as the notice pay; in addition, the employer shall also pay economic compensation in accordance with the law. The notice pay and economic compensation are of different natures and can coexist. The specific application circumstances should be determined based on the grounds for termination. It is recommended to consult a professional lawyer for advice.

Q3: What is the standard for calculating economic compensation?

According to Article 47, the employer shall pay one month's salary for each year of service in the unit; if the service period is more than six months but less than one year, it shall be calculated as one year; and if it is less than six months, half a month's salary shall be paid. The monthly salary refers to the average salary of the last 12 months before the termination of the labor contract. If the monthly salary is more than three times the average monthly salary of workers in the employing unit's area in the previous year, it shall be calculated at three times the average monthly salary, and the maximum service period shall not exceed 12 years.

Q4: Will the compensation for procedural violations increase?

Possibly. If the termination of the labor contract is deemed illegal due to the illegality of the procedures or the object, the worker may request to continue performing the labor contract or claim compensation of twice the standard of economic compensation according to Article 87, rather than just economic compensation. Therefore, whether the procedures are legal directly affects the amount and the nature of the liability. Enterprises should strictly abide by the statutory procedures.

Q5: Can a cooperative relationship claim economic compensation?

Generally, it is not possible. Economic compensation is based on the existence of a labor relationship. If the two parties are in a cooperation, investment, or contracting relationship between equal subjects, the economic compensation rules of the Labor Contract Law are usually not applicable, and the relevant disputes are handled in accordance with the contractual provisions and civil law. To determine whether a labor relationship exists, it is necessary to comprehensively evaluate factors such as personal dependency, economic subordination, and the actual management of employment.

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

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, so as to avoid missing the statutory time limit. →Labor arbitration legal services·Attorney Xue Suhua·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. In the event of a dispute, please consult a practicing lawyer in time.