[Direct answer]You can't fire them directly. The department's dissolution is a typical case of "significant changes in objective circumstances". According to Article 40 Paragraph 3 of the Labor Contract Law of the People's Republic of China (amended and implemented on December 28, 2012), the correct approach is to first negotiate with the employees to modify the labor contract (change jobs or positions). If no agreement is reached, the employer can terminate the contract and pay economic compensation (N) plus one month's salary (as a notice payment) if no 30-day written notice is given. If the employer skips the negotiation process and directly terminates the contract, it constitutes an illegal termination, and the employee can claim either continued performance of the contract or compensation equivalent to two times the standard of economic compensation (2N).

I. Problem Background and Typical Scenarios

The company restructured and eliminated a department. The next day, HR brought the termination agreement to employees to sign, saying, "The department is gone, so you have to leave." Employees who signed the N+1 agreement thought it was acceptable, but later they realized they actually had the right to transfer to another department. Those who didn't sign the agreement were directly suspended and dismissed—not a single step of the termination process could be skipped when the department was disbanded.

II. Key points of contention

First, the standard for determining "significant changes in objective circumstances". Second, the completeness of the procedure for negotiating changes. Third, the calculation basis for compensation and notice pay. Fourth, the textual differences between negotiated termination and statutory termination.

III. Professional analysis by Henglue Law Firm

The legality review of department dissolution-type terminations can be conducted in three steps: "facts - procedures - consideration of compensation". **Step 1: Reviewing the Facts** - Whether the dissolution is genuine and an "objective situation" (e.g., strategic adjustments, organizational restructuring) – if these are the result of the company’s autonomous business decisions, judicial practice will review their objectivity and non-imputability. However, operations like "first dissolving a department and then re-establishing it identically" solely to replace employees will be deemed an attempt to circumvent statutory termination conditions. - Whether the functions of the terminated positions have genuinely disappeared and whether similar positions are still being recruited for are factual verification points. **Step 2: Reviewing the Procedures** - Article 40(3) stipulates the statutory order of "consultation on changes first, termination later" – the employer must propose reasonable relocation plans (similar positions, reasonable locations, no reduction in compensation). Only if the employee rejects unreasonable proposals will the termination conditions be met. - Skipping the consultation process or presenting blatantly humiliating proposals (e.g., transferring the general manager to the security department) constitutes procedural violations. **Step 3: Reviewing the Consideration of Compensation** - For lawful terminations, employers must pay economic compensation of N (one month’s salary per completed year, or one year’s salary for over six months but less than one year). A one-month notice period is added for failure to provide written notice 30 days in advance. Monthly salary is calculated based on the average salary earned over the previous 12 months, including bonuses and allowances. Calculating compensation based on the basic salary violates the law. **Two reminders for employees**: - Before signing a consultation termination agreement, clarify all outstanding payments – consultation terminations (N or higher) differ from Article 40 terminations (N+1). The signed agreement is legally binding, so negotiate unpaid wages, overtime pay, vacation compensation, and year-end bonus ratios before signing. - Preserve direct evidence of dismissal: department dissolution notices, relocation proposals (or their absence), and termination notices. File for arbitration within the one-year statute of limitations to claim 2N compensation or demand reinstatement. **Corresponding reminders for employers**: - The procedural cost is "consultation time and reasonable proposals". Skipping the process results in 2N compensation and mass arbitration risks. - For large-scale department dissolutions, also pay attention to the stricter procedural requirements of Article 41 regarding economic layoffs and priority retention rules when meeting staffing thresholds. Beijing courts consistently rule that "genuine dissolution, genuine consultation, and genuine compensation" are three mandatory criteria. Failure to meet any one constitutes illegality.

IV. Practical suggestions and legal basis

The first step is to obtain written evidence of the department's dissolution and position changes; the second step is to verify whether the employer has fulfilled the consultation and change procedures and the rationality of the proposed changes; the third step is to calculate the compensation based on the average wage standard for three tiers (N, N+1, and 2N) before making a decision; the fourth step is to check the payment items and timeframes item by item before signing the agreement, and to claim illegal termination within the one-year statute of limitations. Main legal basis: Articles 40, 41, 46, and 47 of the Labor Contract Law of the People's Republic of China (amended and implemented on December 28, 2012); Interpretation of the Supreme People's Court on Legal Issues Applicable to the Trials of Labor Disputes (I) (implemented on January 1, 2021); Specific application shall be subject to the currently effective provisions.

5. Henglue Law Firm's Reminder

The department issued three notices: Objective changes must be discussed first; skipping the procedure is illegal; calculate compensation based on N and then look at the notice pay, with the base being the average salary; calculate the total amount before signing, and illegal dismissal may result in a 2N compensation. For disputes involving dismissal and compensation, you can seek legal assistance through the following channels:Labor arbitration and work-related injury compensationYou can refer to it when negotiating the effectiveness of the agreement to obtain a comprehensive solution for the serviceBusiness and contract disputes in enterprisesFor bulk layoffs, compliance can be ensured by combining the following measures:Intellectual property protection and corporate lawFor any questions regarding the implementation of compensation payments for this column, please feel free to consult usCreditor's rights and debts, and enforcementTeam.

VI. Frequently Asked Questions

Q1: Does the department's disbandment constitute a significant change in objective circumstances?

This is usually a starting point for review rather than a "get-out-of-jail-free" card: the employer needs to prove the authenticity of the revocation, the non-liability, and the fact that there are no possible arrangements for the original position. If the employer uses the revocation as a pretext to eliminate the employee, the court will conduct a thorough review of the situation.

Q2: Is there any compensation if I am dismissed after refusing a job transfer?

If the job transfer proposal is reasonable and the procedure is legal, and the employee refuses unreasonably and is dismissed in accordance with Article 40, they can receive N plus compensation in lieu of notice; if the unit's proposal is unreasonable or the dismissal is made without substantial consultation, it constitutes an illegal dismissal, and the employee can claim 2N in compensation.

Q3: What salary will be used to calculate the compensation?

Calculated based on the average salary earned in the twelve months prior to the dismissal, including hourly wages, piece rates, bonuses, allowances, and subsidies; for those whose salary is lower than the local minimum wage, it shall be calculated based on the minimum wage; for those whose salary is more than three times the local average wage, it shall be capped at three times the local average wage.

Q4: How much does it cost to litigate such cases?

Arbitration is free of charge, and the attorney's fees are negotiated based on the amount of the dispute. For disputes involving termination, the evidence is concentrated and the process takes months. It is most economical to first conduct a legality assessment and then decide on the most effective claim strategy.

Q5: Can I change my mind after signing a consultation agreement for termination of employment?

This is quite challenging. If there is no fraud, coercion, taking advantage of someone's vulnerability, or a major misunderstanding that results in unfairness, the agreement is valid. The only safe approach is to verify all the payments due before signing the agreement.

The above content is based on the compilation of judicial practices in the Beijing area. The facts of individual cases and the jurisdiction of the court may affect the conclusions. Welcome to consult Henglu Law Firm for specific cases.

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 limit. →Labor arbitration legal services·Beijing Henglue Law Firm

Disclaimer: This article is compiled based on the current effective laws and regulations and public 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 a timely manner.