[Direct answer]Whether an employee can receive compensation and the amount of compensation depend on the nature of the termination: if the termination is legal and falls under statutory circumstances, the employer shall pay economic compensation according to the employee's length of service (one month's salary for each completed year); if the termination is illegal, the employee may claim double compensation or demand continued performance of the contract. The employee should apply for labor arbitration within one year from the date of termination, and follow the procedure of arbitration before litigation. It is important to keep evidence such as the labor contract, pay slips, attendance records, and termination notices. For specific cases, please consult a professional lawyer for advice.Labor arbitration and work-related injury compensation servicesFor more content, please seeBeijing Henglue Law Firm.

1. Problem background and typical scenarios

Dismissal disputes often arise in scenarios such as verbal notifications to dismiss employees, persuading employees to resign under the guise of "organizational structure adjustments" or "unsatisfactory performance evaluations", transferring employees to lower-paying positions to force them to resign, and conducting mass layoffs under the pretext of internal reforms. Workers often passively accept these actions on the spot, only to later question: Should they receive economic compensation or compensation payments? How to proceed with arbitration? Take a case handled by Henglue Law Firm as an example. In August 2025, a company unilaterally terminated the contracts of 12 employees by issuing "Notices of Termination of Labor Relationship" on the grounds of irregular recruitment procedures discovered during inspections. The employees subsequently collectively applied for arbitration to protect their rights. In such cases, whether the termination reasons fall under statutory circumstances directly determines the compensation path and amount.

II. Key points of contention

  • Is the dismissal legal? The dismissal must comply with the statutory circumstances stipulated in Articles 39 and 40 of the Labor Contract Law. Failure to file the contract, internal rectification, and flaws in the recruitment process are not statutory grounds for dismissal. The employer bears the burden of proof for the basis of the dismissal.
  • Claim compensation or damages: For lawful termination, the employer shall pay economic compensation (N); for termination without justifiable reasons and failure to provide written notice 30 days in advance, the employer shall additionally pay one month's salary (N+1); for unlawful termination, the employee may claim double compensation (2N) in accordance with Article 87, and the employee may also choose to request the employer to continue to perform the labor contract.
  • Time limit and evidence: The arbitration statute of limitations is one year, starting from the date when the party knows or should have known that his rights have been infringed; chat records, attendance records, salary records, and termination notices are the basis for winning the case. Missing the statute of limitations or lacking evidence will directly limit the chances of winning the compensation.

III. Professional analysis by Henglue Lawyers

The core approach of Henglue Law Firm in handling such cases is "first qualitative analysis, then quantitative calculation": first review whether the reasons for termination have legal basis and institutional support, and then calculate the amount of compensation due. In the case of the dismissal of the 12 employees mentioned above, Attorney Feng Na pointed out that: labor contracts become effective once both parties sign and stamp them, and the filing with the human resources and social security department is merely an administrative matter, not a requirement for effectiveness; supervision and inspection rectification, and irregular recruitment are not statutory unilateral termination circumstances. The company's dismissal essentially constitutes an illegal termination to evade legal obligations. The arbitration, first-instance, and second-instance courts all adopted this viewpoint, determining that the termination was illegal and ordering the continuation of the labor contract. The 12 workers achieved three consecutive victories. It can be seen that even if the employer cites the banner of "rectification", as long as the termination lacks statutory grounds, workers still have a great chance of obtaining support. The key lies in comparing the termination reasons with legal provisions item by item and accurately identifying the calculation base based on the employee's salary records.

IV. Practical suggestions and legal basis

In terms of operation, it is recommended to follow five steps: First, fix the evidence and keep the labor contract, pay slips, attendance records, termination notices, or chat records; Second, determine the nature of the termination and predict whether to claim N or 2N based on the statutory circumstances; Third, apply for arbitration to the labor and personnel dispute arbitration committee at the employer's location or the place where the labor contract is performed; Fourth, if you are not satisfied with the arbitration decision, you can file a lawsuit with the court within 15 days from the date of receipt of the arbitration award; Fifth, if the employer refuses to perform the arbitration award after it takes effect, you can apply for compulsory enforcement from the court. For more details, please refer to the relevant legal provisions.Creditor-debtor relations and enforcement case servicesMain legal basis: Article 39 and Article 40 (statutory circumstances for termination of the labor contract) of the Labor Contract Law; Article 46 and Article 47 (scope and calculation of economic compensation) of the Labor Contract Law; Article 48 and Article 87 (continued performance and double compensation for illegal termination) of the Labor Contract Law; Article 27 (one-year arbitration statute of limitations) and Article 53 (arbitration of labor disputes is free of charge) of the Labor Dispute Mediation and Arbitration Law.

5. Henglu Law Firm's Reminder

This case is handled by Beijing Henglu Law Firm.Feng NaThe lawyer (practice license number: 11101202211562923, subject to the certificate issued by the judicial administrative organ) represented the client and won all the litigations from arbitration to the second instance. Henglue Law Firm reminds you: When being dismissed, don't sign documents such as "voluntary resignation" or "no disputes have been settled" hastily. First, request the employer to issue a written notice of termination; if you have been employed for more than one month without signing a written labor contract, you can also claim the double wage difference according to Article 82 of the Labor Contract Law; if you are unsure about the nature of the termination, it is advisable to consult a lawyer as soon as possible to evaluate the claim strategy and avoid claiming too little or even missing out on compensation.

Q1: What should I do if the company verbally terminates my employment without providing a written notice?

Oral dismissal does not affect the right to seek legal redress, but workers need to collect evidence on their own. They can continue to attend work normally and keep track of their attendance. If they are denied entry to the workplace, they should report the matter to the police or file a complaint with the labor supervision authority to establish a record. At the same time, they should keep recordings of their conversations with supervisors, WeChat notifications, and testimonies from colleagues. If the employer neither arranges work nor pays wages, they can terminate the contract in accordance with Article 38 of the Labor Contract Law on the grounds of failure to provide working conditions or failure to pay wages in full and on time, and claim economic compensation. It is essential not to absent themselves from work without authorization, otherwise they may be accused of "serious violations of discipline". After collecting sufficient evidence, they can apply for arbitration and claim compensation for unlawful termination or economic compensation, putting the initiative in their own hands.

Q2: How exactly is the compensation of 2N calculated for unlawful termination of employment?

According to Article 87 of the Labor Contract Law, the employer shall pay compensation equal to twice the amount of economic compensation for unlawful termination. The economic compensation shall be calculated in accordance with Article 47: one month's salary for each full year of service; one year for a period of more than six months but less than one year; and half a month's salary for a period of less than six months. The monthly salary shall be calculated based on the average salary earned in the 12 months preceding the termination, including bonuses and allowances. Where the monthly salary exceeds three times the average monthly salary of local workers in the previous year, the compensation shall be capped at three times the average monthly salary and the maximum service period shall be 12 years. For example, for an employee who has worked for three years and four months, the economic compensation shall be calculated based on 3.5 months' salary, and the compensation shall be equal to 7 months' salary. Note that the compensation and the severance pay shall not be applied concurrently, and the calculation basis shall be based on the actual salary paid to the employee.

Q3: How long does the labor arbitration process take, and what is the overall timeframe?

The process is as follows: Submit the arbitration application and evidence, and the arbitration committee will decide within five days whether to accept the case. Hold a hearing and make a ruling. According to Article 43 of the Labor Dispute Mediation and Arbitration Law, the arbitration tribunal shall conclude the case within 45 days from the date of acceptance. If the case is complex, it may be extended by no more than 15 days with approval; if no ruling is made within the time limit, the parties may file a lawsuit with the court regarding the labor dispute. If dissatisfied with the ruling, the parties may file a lawsuit within 15 days from the date of receipt of the ruling. The entire arbitration process typically takes two to four months to reach a result, and entering the first-instance trial generally requires another three to six months. There are no fees charged during the arbitration stage, and the main cost of protecting rights is time and evidence preparation. The more comprehensive the evidence preparation is, the more controllable the timeframe will be.

Q4: What compensation can I claim if I'm dismissed without a signed labor contract?

There are more items that can be claimed. Firstly, for employees who have worked for more than one month but less than a year without signing a written contract, they can claim the double wage difference in accordance with Article 82 of the Labor Contract Law, with a maximum support of eleven months; Secondly, for those who are illegally dismissed, they can claim double compensation in accordance with Article 87, or request continued performance of the contract; Thirdly, if there are situations of unpaid social insurance or unpaid wages, they can also terminate the contract and claim economic compensation. The absence of a contract does not mean the absence of an employment relationship. Pay transfer records, attendance records, work badges, and work communication records can all prove the existence of a de facto employment relationship. It is recommended to first apply for the confirmation of the employment relationship, and then claim various rights at the same time. Note that the application must be submitted within the one-year statute of limitations.

Q5: Does it cost money to apply for labor arbitration? Do I need to hire a lawyer?

According to Article 53 of the Labor Dispute Mediation and Arbitration Law, labor dispute arbitration is free of charge, and the funds are guaranteed by the government. In the litigation stage, the court charges a small acceptance fee. Whether to hire a lawyer depends on the complexity of the case and the amount of the dispute: for cases involving large amounts, determining the illegality of the termination, continuous calculation of working years, or non-competition clauses, professional intervention can significantly affect the outcome; for simple cases involving the recovery of labor compensation, workers can also handle them on their own. The labor dispute team of Henglue Law Firm provides case assessments to help determine the direction of claims and evidence reinforcement, and to avoid compensation being reduced due to incorrect determinations. It is also possible to first evaluate the case and then decide whether to entrust the entire case to the firm.

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 Henglue Law Firm