leaf

In addition, the company stopped paying my salary after a few months, cutting off my only source of income. I began to try to learn the Labor Law and related legal knowledge, reviewing judicial documents similar to my case, and organizing written materials in order to take the company to court and reclaim the dignity and rights of a worker.

In labor relations, the company holds a position of advantage, while workers are in a weaker position. Especially when facing a gang of bullies composed of bosses, HR, and legal staff, one can feel more passive, angry, confused, and helpless. I hope that everyone can remain calm when facing the company's malice, which is the original intention of writing these words.

On-the-job arbitration or off-the-job arbitration#

I used to think that when encountering labor dispute issues, arbitration could only be initiated after leaving the job, but later learned from the internet that my case was more suitable for on-the-job arbitration, which can be applied for at any time during employment. So I attempted to initiate on-the-job arbitration. During the arbitration period, I could continue to work normally and also had the opportunity to gather as much evidence as possible. Since the company revoked my office access, I no longer needed to clock in at the company.

Compared to on-the-job arbitration, choosing off-the-job arbitration is the most common situation, but the space for fixed and collected evidence is limited and suitable for simpler cases. It is important to note that off-the-job arbitration has a time limit of one year. This means that after a labor dispute occurs, it must be filed within one year from the date of termination of the labor relationship (the day of leaving). Otherwise, neither arbitration nor litigation can be pursued.

Labor personnel dispute arbitration flowchart (Source: Attachment materials)

Solutions for employees unable to provide a resignation certificate#

If the labor contract has been terminated with the company, but the company is uncooperative, what should we do if we cannot provide proof when joining a new company?

Normal legal channels#

According to legal provisions, employers are obligated to issue a resignation certificate when terminating a labor contract. Therefore, we can call the local labor inspection team to file a complaint or request the company to issue a resignation certificate and compensate for the resulting losses through labor arbitration. However, this approach requires a certain amount of time.

Relatively simple solutions#

Although we cannot provide a resignation certificate, if the labor contract with the previous employer has been terminated or ended in objective fact, then there is no legal obstacle for the company to hire us. We can provide relevant proof of the termination or end of the labor contract with the original company, such as: the "Resignation Application" submitted to the original company, "Work Handover Records," "Social Security Reduction Proof," etc.

We can also provide the company we are about to join with a "Commitment Letter":
I, A, ID number: xxx, solemnly promise to Company B that I have terminated my labor contract with Company C. If I make false promises that cause any adverse consequences to Company B, I will bear the responsibility. Signed: Promisor (signature), year x month x day.

What to pay attention to before initiating labor arbitration#

I would like to share a piece of advice I received from a lawyer before arbitration: when preparing the requests in the "Arbitration Application," write down everything you can think of (unpaid annual leave, overtime pay, performance bonuses, etc.), and clearly detail the calculation methods for each item, then gather evidence accordingly, explaining the facts and reasons around the claims and evidence in your requests.

The arbitration committee may not support all claims made by the parties, but anything not written in the requests will certainly not be supported.

I have summarized the key points of attention as follows:

1. Confirm that you have signed a formal labor contract with the employer, excluding labor service contracts, labor dispatch contracts, etc., and confirm whether you have retained all original contracts since employment.
2. If a labor contract is signed, confirm whether the contract clearly stipulates salary conditions, salary composition, job title, job content, start date, and work location.
3. Keep all correspondence emails and WeChat chat records regarding communication and negotiation with the company.
4. Organize the existing evidence you have and list it out.
5. Labor arbitration is a necessary preliminary process; you cannot go directly to court.

Raise legal awareness and be mindful of legal risks#

When encountering sudden job changes or work arrangements, such as job transfers, position changes, or being on standby, be sure to pay attention to the legal risks involved, and do not sign any written materials. Workers have the right to refuse any unreasonable or illegal actions by the company. If there is room for negotiation and discussion with the company, try to strive for a result that is not lower than your psychological expectations. However, if the company intends to lay off employees and the HR talks to you without any sincerity, trying to manipulate your mindset, do not hesitate to take up legal weapons.

The law is a tool that every citizen can use to protect their rights. As an ordinary worker, I believe that the most important thing in safeguarding rights, besides evidence and litigation strategies, is the courage and determination to defend rights.

The difference between economic compensation (N) and economic indemnity (2N)#

A common question arises: "If an employee is dismissed by the company, should they be compensated 2N or N+1?"

Economic compensation: This is what we commonly refer to as "N," where "N" represents the length of service, used to denote economic compensation under the Labor Contract Law. The calculation method is: Economic compensation = Length of service x Monthly salary.
"Length of service," also known as service years, is the basis for compensation and indemnity. If you have worked for 1 year, you will be paid 1 month's salary. If less than 6 months, you will receive 0.5 months of economic compensation; if more than 6 months but less than 1 year, it will be calculated as 1 year.
"Monthly salary" refers to the average salary of the worker in the 12 months prior to the termination of the labor contract (including bonuses, performance pay, year-end bonuses, and other entitled income).

Economic indemnity: This is punitive compensation resulting from the company's "illegal termination" of the labor contract, calculated as twice the "N" in economic compensation, that is, "2N." If there is a case of illegal termination,

As far as I know, the vast majority of companies, including large ones, do not follow the rules and do not execute according to legal standards. Companies with basic legal awareness, when wanting to lay off employees, will try to avoid "illegal termination" of labor contracts, so generally speaking, cases of "2N" will become increasingly difficult to fight. Employees who are illegally terminated during the three periods (pregnancy, maternity, breastfeeding) will find it relatively easier to handle. Companies tend to prefer to operate within the legal framework of "negotiated termination."

The Labor Contract Law only stipulates that the minimum standard for "negotiated termination" is "N," and the other is "N + 1," where 1 refers to an additional month's salary as notice pay (immediate termination). Beyond that, "N + 2" or "N + 3" has no legal basis. On the basis of N, the company can pay any additional amount without legal restrictions, as long as both parties agree, "N + any number" is acceptable.

For example, if a company wants to lay off employees and negotiates with you, but you do not agree, if the company insists on laying you off, claiming that your performance is unsatisfactory and unilaterally terminates the labor contract, this is illegal termination, and the minimum compensation is "2N." Of course, labor relations are very complex, and companies can find many reasons to terminate labor contracts. If you want to fight for "2N," you need to provide sufficient evidence to prove that the company's actions are illegal to have a chance of obtaining "2N."

Here are some common situations regarding "2N" that I have organized:

Effective learning tools for the Labor Law#

China Judgments Online#

China Judgments Online (referred to as "Judgments Online") is the official website hosted by the Supreme People's Court, primarily aimed at publicly disclosing effective judgments from courts at all levels across the country to promote judicial fairness and transparency.

This is one of the tools I use most frequently in my daily life and is a very practical reference for judicial practice. The website provides a wealth of research materials and data, allowing searches for first-instance, second-instance, or retrial judgments from courts across the country, with a wide range of options.

Although labor arbitration decisions are not publicly disclosed and only parties and their agents are allowed to review them, we can still see some arbitration information from publicly available judgments of others, such as the claims and reasons of the parties.

We can use the Judgments Online to query and study previous cases, understand local legal trends, and analyze judicial standards. For example: what are the points of contention between the worker and the company, which claims and evidence were supported by the court, why they were supported, and why they were rejected. Additionally, how judges view issues in closing arguments.

Xiaohongshu#

Because many people on Xiaohongshu share their experiences related to labor arbitration in the form of notes, and many lawyers also share case handling experiences and legal knowledge on the platform, I find it very suitable for searching for high-quality information, doing homework in advance, and verifying information from multiple sources, which can help avoid unnecessary detours.

China Legal Quick Reference Manual#

China Legal Quick Reference Manual is an open-source project sourced from the national legal regulations database. The author of this project has integrated and provided search functions for the database, with a clean layout and ease of use, making it very suitable for daily queries and learning. The author only provides a mobile version (iOS, iPadOS) and a web version, without a computer version, but I can also install and use it on my M1 MacBook Pro through the App Store.

For labor disputes, it is recommended to focus mainly on the "Labor Law of the People's Republic of China" and the "Labor Contract Law of the People's Republic of China."

Related introduction to the China Legal Quick Reference Manual Download link for the China Legal Quick Reference Manual

How to find a reliable lawyer#

By studying judicial cases and recent publicly available labor dispute judgments in my locality, I have learned some basic knowledge of labor law and started to try to sort out my case situation, hoping to receive some professional advice from a lawyer. Let me first discuss two common misconceptions about finding a lawyer to represent a case.

Misconception 1: The bigger the law firm, the better; the more famous, the better.#

Famous law firms generally serve large companies because labor cases for workers are small cases with low monetary value and do not generate profit.

There are specialized fields, and not all lawyers are good at handling labor arbitration cases. Therefore, the correct approach is to find law firms that primarily handle labor dispute cases or lawyers who mainly represent labor disputes.
This can be done through recommendations from acquaintances (such as friends, colleagues, family), which provides a certain level of trust, or by searching on Xiaohongshu to see if others have chosen reputable lawyers with many successful cases.

If you see that a lawyer's resume lists many areas of expertise, that may not necessarily be a good thing. What we need is a lawyer whose resume includes more relevant experience related to labor disputes.

Misconception 2: Once you pay a lawyer to represent you, you can leave everything to them.#

Although our labor dispute cases are small and not profitable, they can still be quite complex. A significant amount of time is needed for research, preparation, and court appearances, as well as running arbitration or court processes.

The same goes for lawyers. As legal professionals, lawyers provide specialized legal assistance, but they do not replace you in handling all related matters. Evidence collection and negotiations with relevant departments must be done by yourself, while the lawyer provides guidance during this process. Lawyers can help strive for the best outcome, but they cannot eliminate all risks.

As parties involved, we understand the company and our own situation best. During court hearings, judges will ask detailed questions about every detail, which is why it is important to take court appearances seriously and participate personally. To reduce the risks present in litigation, we need to communicate and discuss with lawyers frequently, clarify our thoughts, organize evidence, and prepare adequately so that we can respond freely in court without missing key points due to nervousness.

From the above two misconceptions, we can summarize this section:

1. The importance of specialized fields: We need to consider whether the type of our case matches the lawyer's area of expertise.
2. Choosing the right law firm and lawyer: Select lawyers with a good reputation and positive feedback.
3. The role of the lawyer: Hiring a lawyer does not mean you can completely let go; the lawyer's role is to guide and strive for the best outcome, not to handle everything for you.
4. The involvement of the parties: As parties involved, we should have a deep understanding of our case and actively participate in court preparation, communicate fully with lawyers, organize evidence, clarify our thoughts, and minimize litigation risks.

One way to find a lawyer: China Legal Services Network (12348 China Law Network)#

This website, built by the Ministry of Justice, officially went live on May 20, 2018. The site integrates and collects "legal service organizations" and "legal personnel data" nationwide.

We can choose law firms or lawyers from it, and we can also query a law firm or a lawyer we learned about from other channels (we can check the lawyer's practice certificate number).

What I tried to find a lawyer#

In total, I consulted with 3 lawyers (excluding legal aid). My path to seeking legal help was: online consultation with Lawyer A (paid) — offline consultation with Lawyer B (paid) — offline consultation with Lawyer C (paid).

Online consultation with Lawyer A#

Initially, I tried to find a lawyer for paid online consultation.
Although the paid price (168 yuan) is much cheaper than offline consultations, the trade-off is that there are limits on the number of questions, word count, and time (only text communication is allowed, no voice). If you ask questions without the lawyer understanding the relevant background, this will lead to the lawyer being unable to provide reasonable advice due to the inability to assess the case.

So I tried to simplify my text expression as much as possible, dividing the question content into: event background (timeline), my current situation, and core issues, and created an image to send to the lawyer. The lawyer answered my questions one by one, but I assessed that the solution proposed by the lawyer carried a relatively high risk, so I did not adopt it.

Offline consultation with Lawyer B#

Through a lawyer friend’s introduction, I contacted a lawyer who mainly handles labor dispute cases, and the law firm was not too far from me, so I scheduled a time for an offline meeting. I gained a lot from this meeting; the concerns I had before were mostly resolved, and I felt more at ease, although my situation was relatively passive and I needed to see the company's next move.

Offline consultation with Lawyer C#

Lawyer C was recommended by a colleague and has extensive experience with labor arbitration cases. After comprehensive consideration, I chose Lawyer C to represent my first-instance case.

Regarding lawyer consultation fees, in Beijing, they range from 200 to 3000 yuan per hour. I consulted Lawyer B offline twice, each time at 500 yuan per hour.

Regarding lawyer representation fees, they are charged based on a percentage of the case's monetary value, and the fees vary at different trial stages (arbitration, first instance, second instance).

Avoid unnecessary detours: Preparing evidence and recording techniques#

Preparing evidence#

One-click download of all materials required for arbitration#

Including templates for labor arbitration filing applications, evidence exchanges, and materials used in court, which can be obtained by clicking "Download related attachments" at the bottom of the Beijing Chaoyang District People's Government website. The document also includes relevant processing procedures and precautions, and the content is very comprehensive for careful review.

Self-service printing of bank salary transaction vouchers#

I brought my original ID card directly to the self-service machine at a nearby bank to print, and I could operate it myself on the machine, saving the process of taking a number and queuing at the counter. If there are any issues while using the bank's self-service machine, I can ask the bank manager nearby for help, which is very efficient. It is advisable to understand the relevant fee standards and prepare beforehand; some banks may limit the number of free prints per month, and charges apply for exceeding that limit. My salary is issued by the company through three banks (Beijing, Transportation, and China Merchants), so I need to print transaction records at all three banks. The self-service machines at Beijing Bank and Transportation Bank do not impose printing limits on transaction slips, but I remember that China Merchants Bank has a printing limit of 4 slips per month, charging 20 yuan per slip for exceeding that.

When operating the bank's self-service machine, I summarized three key points: select the time range, filter transaction types, and include the bank's stamp.

Select time range: Choose the transaction print range based on the time involved in the labor dispute, selecting by year and not crossing years.

Filter transaction types: Check the transaction type (salary) in the filter section. The purpose of specifying filter criteria is to make it clear when viewing the bank transaction slip, so we only need proof of salary transactions, not other transaction records.

Include the bank's official seal: The salary details printed by the bank's self-service machine generally default to including the official seal, but some banks require checking relevant options before printing the stamped transaction slip. The official seal is usually called "Receipt Special Seal" or "Accounting Business Seal." Be sure to check whether the printed transaction slip includes the bank's official seal; if it does not, the evidence is invalid.

My bank transaction slip with stamps (left: Beijing Bank; right: Transportation Bank)

Using iPhone Notes to scan copies of the "Labor Contract"#

Since the printed paper has a black-and-white effect, if I directly take a photo of the "Labor Contract" with my phone, some information may become unclear. Here’s a convenient little trick: use the "Scan" feature in iPhone Notes to scan the "Labor Contract" page by page into a PDF file before printing (this is clearer than direct printing and more convenient than photocopying). This can avoid the situation of having to redo the submission due to non-compliant materials (don’t repeat my mistakes).

The "Scan Document" feature in iPhone Notes

Essential App for Workers — Rights Defender#

This is an electronic evidence collection tool with legal efficacy launched by the National Intellectual Property Administration, widely used by legal professionals. It can generate unalterable electronic evidence with timestamps. The evidence collection scope includes: taking photos, recording videos, audio recording, screen recording, and web pages. Real-name authentication in the app allows normal use.

If some evidence is particularly important, this tool can be chosen. For example, before the company disabled my office software, I used the screen recording function of Rights Defender to secure evidence of the organizational structure, personal information, and other situations. The law stipulates that whoever asserts must provide evidence, so when initiating arbitration or litigation, I had the electronic version of basic evidence saved through Rights Defender.

Rights Defender can largely replace traditional notarized evidence collection methods. Correct use of Rights Defender can make evidence collection quicker and cheaper. However, it is ultimately just a tool for evidence collection; while the authenticity of the evidence is not in question, whether it will be accepted and how much effect it will have is a matter that requires deep consideration. If unsure, it can be used under the guidance of a lawyer, as each evidence collection incurs a fee.

Rights Defender official website

[Rights Defender Evidence Collection - Recording and Audio Evidence Collection Tool Introduction][Rights Defender Evidence Collection - Download Link]

Recording Techniques#

1. Timing: Recording evidence is better done early rather than late.
2. Equipment: Regardless of whether it is a face-to-face conversation or not, the entire conversation should be recorded with equipment that can clearly capture both parties' dialogue. If it is a phone conversation and you are using an iPhone without a call recording function, you can borrow another phone from a friend to record.
3. Operation: The phone can be put in airplane mode to prevent sudden calls from interrupting the recording.

Precautions#

Recording evidence is often not accepted by arbitration courts, mainly because the conversation content in the recording lacks key information such as the identity of the parties involved, for example: the company legal person Zhang San, HR head Li Si. Recording is supplementary; it can be better if obtained, but if useful information cannot be collected, it is not a problem.

The purpose of recording is to clarify the facts through conversation, facilitating further evidence collection. Do not threaten or intimidate the other party (maintain a friendly attitude), otherwise the evidence will be invalid. It is worth mentioning that the purpose of recording evidence is to support other related evidence, forming a chain of evidence, and cannot be used alone.

In conversations, not only must the questions be clear and precise, but the identity of the speakers must also be clear, with content that is objective, true, and coherent. It can be helpful to clarify thoughts first and then write them down in written materials, practicing a few times before the call.

Submitting recordings#

It is important to note that when submitting recordings as evidence, two things must be done: first, the complete audio file must be burned onto a CD without being edited or forged, with the content unchanged and no doubts; second, the entire dialogue content must be organized into written materials.

Written version of the recording content: It is advisable to include the following information: time, place, equipment, duration, and party information (my name, company head’s title and name). Finally, mark the location of the recording file in the "Evidence Directory," and submit the recording CD and written version along with other evidence.

Additionally, the original recording file and carrier (such as a phone) should be kept safe for verification during the court hearing.

My recording communication outline#

1. Confirm the identities of both parties.
2. Confirm relevant facts.
3. Maintain a friendly negotiation attitude and clearly state your claims.

My pre-call recording content#

1. Introduce myself to the recording and state the facts: I am xxx, ID number xxx, and have been working at x company, x department, in the position of x since x year x month x day.
   From x year x month x day, the company xx (briefly state the factual content), and I am now calling the HR director xx (full name) of the company to negotiate a solution. Their phone number is xxx.

Sample evidence material checklist ([Source](Attachment materials))

Seeking free legal aid#

Legal aid is more like a special service set up for "special groups," mainly serving migrant workers or older individuals.

The Chaoyang Labor Arbitration Committee has also set up a legal aid consultation window, where you can take a number and queue at the service desk, which is in the same hall as the arbitration filing window. Perhaps due to the complexity of my case, or maybe the staff at the window did not have much time to help me analyze deeply, I provided my evidence to the other party, trying to understand the policies and judicial standards regarding my situation, but I did not receive useful information or guidance.

Therefore, everyone can try consulting, but do not have too high expectations for legal aid. Also, do not trust lawyers who actively hand out cards at the arbitration committee's door; I have never seen a licensed lawyer needing to solicit clients. These lawyers on the cards are likely not real lawyers and are mostly unreliable, with many people being scammed.

My complete arbitration process#

During the arbitration phase, I chose to go through the entire process myself, while I entrusted a lawyer to represent me in the first-instance litigation.
First, because I have been working in Beijing for many years and have had arbitration experiences.
Second, because a previous foreign landlord refused to return my deposit and boldly stated that I could sue him in court. So I followed his advice and wrote a lawsuit to take to court, which gave me some experience in civil litigation.

The filing process for labor arbitration, evidence exchange, and court litigation has some similarities. Therefore, I feel that arbitration is much simpler than litigation when adequately prepared. My labor dispute case is relatively complex and needs to go through court review.

Taking Beijing Chaoyang District as an example, you can make an appointment in advance on the Beijing Human Resources and Social Security Bureau's official website. After making an appointment, you will receive a text message informing you of the time to submit filing materials offline. During the pandemic, appointments on the official website required waiting for more than a month, and the current waiting time is uncertain.

You can also choose to go directly to the site to take a number for filing (this method is more recommended as it is more efficient). It is advisable to prepare materials and arrive at the entrance before 8 AM to queue, so you can get a number before 10 AM. Otherwise, due to the large number of people, you may not be able to file on the same day. I successfully filed twice during and after the pandemic, targeting arbitration requests for different time periods within the labor dispute. Now that the pandemic is over, the process has been simplified considerably, making it relatively easier.

Arbitration location#

Chaoyang District Labor and Personnel Dispute Arbitration Court,
Phone: 010-87983310
Address: Building B and C, No. 15, Jiantai Road, Chaoyang District, Beijing

Preparation materials#

• Original ID card
• ID card copies x 3
• Application form x 3
• Address confirmation letter x 1

It is advisable to check the relevant materials carefully and back up the electronic versions to a USB drive. It is best to bring a laptop; if the written materials do not meet the filing window requirements, you can modify them immediately on your computer. If there are any missing materials, you can also pay to print them in the printing area next to the service desk.

Filing process#

1. Go to the main service desk to collect and fill out the address confirmation letter, and receive the preliminary review number (you can print it in advance and directly collect the A-prefixed preliminary review number).
2. After the preliminary review, you will receive a B-prefixed filing number and wait for your number to be called.
3. The staff at the filing window may ask you to fill out a labor mediation form. (This step can be skipped directly to save time, as the arbitrator will mediate again before the hearing.)

Completing the filing#

After successfully filing, the window will issue written materials such as evidence notification on-site. After filing, there is a 30-day mediation period, during which staff will call both parties (the company and the worker) to inquire whether they agree to mediation. Next, you will receive a notification email from the Chaoyang Arbitration Committee regarding evidence exchange, along with a text message reminder.

Evidence exchange#

It is important to note that the exchange time for evidence between yourself and the company is the same, and you must arrive at the designated window within the specified time to handle evidence submission and exchange. It must be done in person; otherwise, you will miss the deadline. After submitting and signing for confirmation, you can leave the venue. If you encounter company personnel on-site, you should also ignore them.

Waiting for the hearing#

Next, just wait for the hearing notification. When attending the hearing, be sure to bring the original ID card and original evidence. Pay attention to the hearing time; if you are late on the day of the hearing, it will be regarded as a withdrawal of the case. The arbitration hearing is relatively simple and will not be as detailed as court hearings. The arbitrator mainly asks both parties questions and records some information confirmed by both sides, such as the dispute time, reasons for evidence, social security status, salary situation, etc.
Arbitration cases are randomly assigned to different arbitrators. I filed at the end of 2022, had the hearing at the beginning of 2023, and only received the judgment in October 2023. Everyone can keep in touch with their case arbitrators to inquire about progress.

Arbitration results#

Many friends around me believe that receiving a labor arbitration judgment that supports relevant requests is a signal of victory, but arbitration is mainly focused on mediation and cannot maximally protect the rights of workers. For example, the law stipulates that the minimum standard for negotiated termination of a labor contract is N; assuming N is 10 months, the arbitrator will negotiate with the company and the worker, bargaining until the final N may be 6 or 4, or even lower. While it seems to reduce the time cost of workers' rights protection, the actual biggest beneficiary is the company, which attempts to achieve the goal of layoffs at a low cost using malicious, targeted, and insulting means.

Therefore, labor arbitration is just the starting point for workers to protect their rights; they still have to go through first-instance litigation and second-instance litigation. Even if they ultimately win the case, they may still face the situation of applying to the court for enforcement.

"Layoffs" is the theme of the first series. To unify the understanding of the concept of "layoffs," we emphasize a definition at the beginning of the article: Any legal act of an employer unilaterally terminating a labor contract in advance is considered a layoff.

Corporate layoffs can be categorized into three types based on motivation: economic layoffs caused by market factors or business management issues, structural layoffs resulting from changes in products/business lines and organizational structure, and optimization layoffs aimed at improving employee efficiency and average capability. Currently, many companies tend to use the latter two to gloss over economic layoffs during public relations.

In today's world, where layoffs have become almost commonplace, what is even harder to accept is the uncertainty that follows. For many workers over 30, the opposite of layoffs is the "responsibility item" for their families. Li Bao, a 39-year-old former employee of a major internet company, said that the biggest pressure after being laid off is the mortgage, "At 39, which company still wants a 39-year-old employee? The worst outcome is to sell this house." But if he really wants to sell a house in Beijing, he must have lived there for at least 5 years.

Workers have it hard, and companies have it hard too. "In the face of a global economic recession and declining consumer capacity, companies should change their thinking and business policies, shifting from pursuing scale to pursuing profits and cash flow, ensuring survival over the next three years. Surviving should be the primary agenda, with all marginal businesses shrinking and closing." — In 2024, it will be less than 2 years since Ren Zhengfei's internal talk of "passing the cold air to everyone," and layoffs are still ongoing.

Peeling away the euphemisms of layoffs ╱ 01

Why do companies "hire while laying off"? ╱ 02

Capture signals early, be prepared ╱ 03

Psychological preparation: extreme situations you might encounter ╱ 04

When layoffs come to your head ╱ 05

Peeling away the euphemisms of layoffs#

Economic layoffs are usually caused by market factors and business operations, and are currently the mainstream type of layoffs. Unlike the generally optimistic years of the industry, today, regardless of whether your performance is top-tier or below standard, personal ability has been overshadowed by the larger environmental factors, with the company's survival strategy determining your retention more.

However, companies do not want to lose face — large-scale layoffs are seen as a sign of decline in the eyes of the public. Thus, the expression "layoffs" has become increasingly euphemistic, attempting to play word games to maintain dignity. A common expression regarding layoffs is "optimization." Literally understood, optimization means finding employees who do not fit the team's development to achieve organizational optimization. Under workload and performance indicators, the saturation and effectiveness of employees' work can be quantitatively assessed.

"Optimization" was originally a routine operation for companies, but in recent years, this term has been increasingly used to gloss over layoffs due to poor business performance, while employees, as the weaker party, can only passively be "optimized." As one netizen commented, "In the past, being optimized meant the employee was inadequate, but now being optimized is more about the company's reasons."

Companies like JD and Bilibili have even coined a more dignified term — "graduation."

"Organizational restructuring" often accompanies "layoffs," but it may sometimes be primarily due to the merging of business areas or the maturity of the commercialization structure.

In 2021, ByteDance merged the original KA (national key accounts), LA (local key accounts), and SMB (small and medium-sized businesses) business lines in its commercialization sales system, dividing them into 7 new business lines according to the specific industries of ByteDance's advertising clients. The strategic changes behind this also adjusted the company's organizational framework and personnel structure.

Another situation is that the maturity of the business structure leads to a corresponding decrease in the demand for operational maintenance personnel. Recently, the large-scale layoffs announced by the office software Feishu belong to this type. Wang Yuan, Vice President of NetEase Group, Executive Dean of Hangzhou Research Institute, and General Manager of NetEase Shufan, believes that Feishu can meet its needs with 1200 people. "Most custom development and implementation delivery can be outsourced or handled by the ecosystem, as Feishu's product core is relatively focused, with customization occurring more in interface, docking, integration, and plugins."

Why do companies "hire while laying off"?#

"Short of talent, but not short of people" — some industries are showing a "frozen and fiery" situation. For example, on one side, new energy vehicle companies are laying off workers and cutting costs, while on the other side, the demand for quality talent in new energy vehicle companies continues to rise. The "2023 Talent Migration Report" released by MaiMai shows that from January to October 2023, the new energy vehicle industry ranked first in talent scarcity with a talent supply-demand ratio of 1.77, meaning there are 1.77 people competing for each position (the overall talent supply still exceeds demand). During the same period, the new energy vehicle industry also ranked second in the "talent inflow/outflow ratio" at 1.33, with its ability to attract talent only second to the new energy sector.

According to Zhang Xiang, Director of the Vodafone Digital Automotive International Cooperation Research Center, the high turnover rate of talent in the new energy vehicle industry, represented by NIO, is related to changes in the employee structure of car companies. In the initial market expansion phase, a large number of market, marketing, and R&D personnel are needed; however, after the brand is established, the demand for advertising and planning personnel may decrease. After technological accumulation and product stabilization, there may also be a tendency to hire "new R&D personnel" to replace senior "old R&D personnel" to reduce costs.

Of course, the most realistic and brutal situation is that companies are meticulously calculating and want to eliminate some expensive, low-performing individuals in favor of higher-performing or cheaper individuals — the so-called "talent replacement," which is also an important reason for this "hiring while laying off" dynamic.

Capture signals early, be prepared#

▼ Start by looking at public information to assess the company's operational health

Before layoffs, companies usually show some obvious signals. If you can capture the dangerous signals from these abnormal pieces of information early and prepare in advance, even if you are really laid off, you can face it calmly with other offers in hand.

The reason for layoffs can be traced back to the company's revenue capacity being insufficient to support certain project operating expenses, which is why personnel cuts are made to reduce costs — when discussing company operations, data is the most direct indicator.

From a macro perspective, employees in the new era should pay more attention to the data in the company's annual report, which is a necessary means to assess the company's situation from public information.

In the table below, we categorize methods for querying corporate annual report data from public channels based on whether the company is listed or not.

Although there is a lot of data on the reports, it is essential to focus on a few key figures and ratios, namely revenue, gross margin, expense-to-revenue ratio, total assets, inventory turnover rate, and accounts receivable turnover rate. Through these indicators, we can roughly outline the operational level of the company we are in.

Specifically, different revenue amounts determine the sales scale of the company; comparing this year's, last year's, and the year before's revenue can reveal the company's development trend.

Gross margin should generally be viewed alongside inventory turnover rate; fluctuations in gross margin may be caused by changes in the sales product structure. There are two scenarios: gross margin and inventory turnover rate rise and fall together or one rises while the other falls. If gross margin decreases while inventory turnover rate increases, it may raise suspicions of financial statement fraud, as the company may have used excessive cost transfers to lower gross margin, thereby affecting the inventory cycle rate.

Expenses can be further divided into fixed and variable costs. Fixed costs usually refer to rent, depreciation, etc., while variable costs refer to business entertainment expenses, travel expenses, etc., which are related to revenue; the more revenue, the higher the variable costs. Typically, comparing the variable costs to revenue ratio can help determine whether this expense is excessively high or low.

Total assets can be linked to revenue; for example, how much total assets are needed to leverage 10 million in annual revenue. Common components include cash, accounts receivable, inventory, other receivables, and fixed assets.

Inventory turnover rate is the ratio of the cost of goods sold (cost of sales) to the average inventory balance over a certain period. Assuming 12 million in revenue and 1 million in inventory, the inventory turnover rate is 12, meaning it takes one month for goods to be bought and sold (this can be compared with actual turnover rates). Generally, the higher this indicator, the smoother the company's inventory sales, and the faster the conversion into cash or accounts receivable.

Accounts receivable turnover rate refers to the average number of times accounts receivable are converted into cash within a certain period. It reflects the speed at which a company collects payment for goods sold or services rendered, which is significant for assessing the company's operational health and liquidity.

▼ Intuition hidden in micro details

On a micro level, there are generally two types of precursors to layoffs: resource reduction and tightening of policies.

The former includes but is not limited to the cancellation of meal allowances, reduction of weekly fruit supplies, and cancellation of commuting buses, among other employee benefits. In December 2023, MaiMai CEO Lin Fan announced that the company would reduce salary benefits, stating that starting December 18, the company would cancel free meals and related allowances, and the provident fund contribution rate would be lowered to 5% to ensure the company's sustainable and stable development.

The latter involves tightening recruitment scales and closely monitoring employee assessments to reduce personnel costs. In May 2024, JD Retail implemented new attendance regulations, requiring daily attendance counts at 9:00 AM, and if the bus is late, proof must be submitted; to assess employee workload, those leaving work at 6:00 PM must undergo workload assessments.

According to a JD executive, a WeChat group has emerged for proxy clocking in, charging 15 yuan per proxy. One person can clock in for up to 20 people, earning over 300 yuan a day.

Another sign, though not very accurate, but potentially related, is "office relocation." Moving to a cheaper rental area is a way for companies to alleviate financial pressure by reducing operational costs, but it also indirectly signals the possibility of future layoffs.

Psychological preparation: extreme situations you might encounter#

▼ Cold violence: isolation, PUA

The essence of cold violence layoffs is the complete destruction of the psychological contract formed with employees.

Whether through forced expulsion or passive marginalization of employees, cold violence represents an active act of tearing apart the psychological contract. Common practices include not assigning work and not notifying meetings; this snowballing isolation aims to distinguish "you" from "us."

A netizen shared her experience of not receiving any work assignments or being called to meetings for half a year, playing the role of an outsider. However, she also found joy in studying psychology and marketing knowledge every day. This positive coping strategy is worth learning.

Another manifestation of cold violence layoffs is workplace PUA. Workplace PUA refers to superior leaders manipulating individuals' behavior through psychological control. In the workplace, there is a default hierarchy and information gap between superiors and subordinates, which is not a completely equal relationship. This disparity can easily lead to neglect of equal dignity, and if leaders do not pay attention or deliberately abuse this, it can become the source of workplace PUA.

"I am teaching you how to work, not pushing tasks onto you," "Young people should endure more hardships," "Learning more is never a bad thing," "Your abilities are so poor that no other company will want you." To distinguish between PUA rhetoric and sincere criticism, pay attention to whether the other party seems to be acting for your benefit, giving you pseudo-positive feedback to make you accept undesirable tasks; whether they turn to criticism or even insults when your performance does not meet their expectations.

When PUA tactics are used in layoffs, employees whose psychological defenses are breached are likely to choose to resign voluntarily, saving the company from compensation costs, but at the potential cost of the employee's mental and physical health. A graduate from Melbourne University told "Workplace Bonus" that she has always been seen as a good girl with a bit of a people-pleasing personality, but in her last two jobs, she was severely subjected to PUA, leading to physical and mental exhaustion, ultimately forcing her to resign.

▼ PIP, discussions to persuade resignation

PIP is also a method of dismissing employees (though this method seems to carry more contractual spirit), where managers set a "systematic plan to improve work performance and capabilities within a certain period" for employees identified as needing development.

In companies implementing PIP, the targets are those already defined as "incompetent employees." According to Article 40, Paragraph 2 of the Labor Contract Law, termination can only occur when "the worker is unable to perform the work, and after training or job adjustment, still cannot perform the work." Unfortunately, many companies do not provide training plans for improvement and lack positive PIP implementation, exacerbating the alienation of this method in workplace practice.

What should a standard PIP look like? Before formally starting PIP, companies should design relevant processes in advance, have sufficient discussions with employees, and retain necessary documentation to ensure the plan can be implemented properly while effectively controlling risks. The general process for implementing PIP includes: performance review, improvement cycle, improvement training, improvement goals, and progress review.

Workers should pay special attention to the standards for passing and the handling of non-passing situations to avoid vague expressions. Even if the worker ultimately fails the PIP performance assessment, according to Articles 40 and 46 of the Labor Contract Law, the company still needs to pay the worker economic compensation.

A more direct method is discussions to persuade resignation. "Your abilities are insufficient to meet the current job requirements" — but whether the real reason is that simple requires employees to think critically: if they indeed did not meet the KPI indicators agreed upon at the time of hiring or assessment, or if their work output is indeed generally lower than that of other employees, then they need to improve their work capabilities; but if the company cannot provide sufficient evidence and reasons to prove it is an employee capability issue, then it is likely just trying to shift the blame to avoid potential economic compensation.

▼ "Violent layoffs"

If discussions to persuade resignation can be considered a somewhat decent method, then "violent layoffs" completely tear apart the facade of the unequal relationship between employers and employees.

In 2019, an article titled "NetEase Layoffs: Security Forced Me, a Terminally Ill Patient, Out of the Company. My Nightmare Experience at NetEase!" circulated on social media. The author described how, while suffering from a terminal illness, he personally experienced being "forced, calculated against, monitored, framed, and threatened," and being expelled from the company by security.

This incident was the first instance in mainstream media reports in the past five years to use the term "violent layoffs," prompting commentary from CCTV ("Can the hearts of people still be gathered?").

Netizens' condemnation of NetEase's violent layoffs aligns with the public's general first impression of corporate layoffs: "heartless," "self-serving," "inhumane," "disgusting," "trash." Workplace Bonus found that since then, the term "violent layoffs" has rarely been used in domestic mainstream media reports, only being frequently mentioned in reports related to companies associated with Elon Musk (Tesla and the acquired Twitter).

However, this does not mean the true disappearance of "violent layoffs." By definition, the term violent layoffs refers to the illegal termination of labor contracts by companies. Whether it involves the company not providing any buffer or handover time, directly confiscating computers and equipment, canceling accounts, or ignoring employees' emotions and health conditions, or even causing verbal and physical conflicts, all fall under the nature of "violent layoffs."

▼ Salary cuts as layoffs

On July 3, 2024, a female employee of CICC passed away. A person in charge of the Shanghai branch claimed it was due to "personal reasons," denying any second round of salary cuts and layoffs. However, another employee at CICC's headquarters stated that there were salary cuts at the company, with some positions' salaries reduced to "30% of previous levels."

As a direct regulation affecting workers' interests, the salary system must follow democratic and public procedures when formulated or modified, according to Article 4 of the Labor Contract Law of the People's Republic of China. If the company does not discuss and propose plans and opinions with the employee representative assembly or all employees, or does not negotiate equally with employees, then the company's salary cuts are not in accordance with legal provisions.

When negotiating salary cuts with the company, employees usually have the following options: if they are willing to stay with the company, they can accept the salary cut; if they do not agree, the company will directly compensate according to the layoff procedure; another extreme situation is that the company does not want to compensate employees proactively, which would require going through the labor arbitration process.

▼ Fresh graduates being unilaterally released from contracts

On April 23, 2024, it was reported that all Chinese fresh graduates hired by Tesla this year were unilaterally released from contracts, with compensation amounting to one month's salary. In June, a screenshot of a contract release notice from GAC Aion circulated online, and GAC Aion subsequently issued a statement on Weibo, clarifying that the news was a rumor.

The situation of "fresh graduates being unilaterally released from contracts" is currently concentrated in high-tech industries (such as new energy manufacturing and software industries). These popular industries are highly competitive, and companies are looking to cut costs. From a cost perspective, laying off a fresh graduate only requires paying a few thousand yuan in breach of contract compensation, which is the "optimal solution" after weighing the options; on the other hand, high-tech industries have rapidly changing technology updates and evolving talent needs, and companies tend to prefer hiring talent that matches their specialties.

Another important reason is that both these companies and graduates are looking to cast a wide net. To avoid being passive, companies will hire more fresh graduates than needed, allowing for comparisons and retaining the most suitable talent.

Currently, there are no specific legal provisions regarding the employment rights of fresh graduates; the unilateral termination of the tripartite agreement by companies should comply with the breach of contract clauses, which generally stipulate a maximum of 5000 yuan.

If there are no breach of contract clauses, it is difficult to determine actual losses in the absence of the graduate's employment, and in judicial practice, courts will refer to Article 40 of the Labor Contract Law to require compensation equivalent to one month's salary, giving graduates a month's buffer.

When layoffs come to your head#

▼ Compensation standards corresponding to different situations

We do not advocate that readers adopt a confrontational and oppositional mindset towards the company when business operations are normal, but risk prevention awareness should be given more attention during special periods. We find that to this day, until layoffs happen to oneself, many employees have never taken the time to study the Labor Contract Law and understand the compensation/indemnity standards they should theoretically strive to obtain in different situations.

Strictly speaking, "economic compensation" is used to compensate workers for economic losses caused by resolving labor disputes according to national laws and policies, while "economic indemnity" is used to compensate workers for economic losses caused by the employer's illegal actions.

"Notice pay" is not a legal term but a commonly used term based on relevant legal provisions, referring to the fee that substitutes for one month's notice period — according to Article 40 of the Labor Contract Law, the amount is equal to one month's salary.

In terms of calculation standards, N represents your length of service; if less than six months, it is 0.5N; if more than six months, it is N. In actual calculations, the average salary for the 12 months before the termination of the labor relationship should be used as the calculation standard (the salary here refers to the pre-tax salary due).

It is worth noting that the payment of year-end bonuses is determined by the labor contract and company regulations. If the company clearly stipulates that only employees who are still employed at the end of the year will receive year-end bonuses, then leaving early means no bonus. However, if it is only stipulated that year-end bonuses are based on performance assessments, and your performance assessment meets the standards, you can still receive a certain proportion of the year-end bonus even if you leave before the actual payment.

▼ Normalizing actions to respond to layoffs

Below are some more specific and feasible suggestions for responding to layoffs. These suggestions are not only actions to take after layoffs but also include "negotiation skills" and "preserving evidence," which should be cultivated and established in daily work.

1. Strive for as much compensation as possible within legal limits

This is what we should be most concerned about. In addition to the basic N/N+1, we should also clarify how unpaid overtime and unused annual leave are calculated; whether social security has been paid for the month; how year-end bonuses are calculated; when remaining salaries and compensation will be paid.

During resignation negotiations, HR or other direct supervisors will usually first test your bottom line — that is, what rights you are striving for — you must clarify this for yourself and be firm in your bottom line. Common tactics used by companies include playing the emotional card and giving suggestions from the employee's perspective (be cautious of private reductions in your legitimate rights).

Another more aggressive tactic is threats. Many companies will use background checks, labor arbitration, or write on the resignation certificate that you were dismissed, etc., to threaten you. As a worker, do not be intimidated; you should demonstrate your understanding of the law (this is why it is emphasized to understand the law beforehand), and maintain a firm attitude — however, we strongly advise against acting impulsively and completely severing ties with former colleagues and bosses, creating a mess. Always leave some room for maneuver; even if you have had a heated argument, it may create resistance in striving for actual rights (after all, colleagues in HR and other functional departments may also be workers who could be laid off, and starting off by putting the other party in an oppositional position is unwise).

2. Master some negotiation skills

There are countless cases of losing out due to poor negotiation skills. Negotiation is not a magic bullet for victory, but it can increase the chances of success.

Before the negotiation begins, you should start recording; recording can help you have a clearer memory of the negotiation process in the future and can serve as potential legal evidence. During the conversation, express your willingness to work, and do not reveal any intention to resign. If the other party explicitly mentions layoffs, be sure to state your work abilities and achievements, proving that your work is not an issue, thus taking the initiative in striving for compensation.

A girl working in copywriting released her resignation negotiation recording with her former company on a video site. She mentioned that before being laid off after a year of employment, there was severe internal strife among the upper management, with five colleagues already having left; during the 30-minute negotiation, she first "could not lose momentum," maintained "clear-headedness, firm goals, and clear demands without retreating," and finally "saw the other party relent and countered with an emotional appeal," successfully obtaining 35k in compensation.

3. Learn to preserve evidence

To avoid potential disputes later, we should cultivate the habit of collecting various types of evidence during employment, including contracts, salary card transaction records, attendance records, chat records, etc. Ample evidence can benefit you in both resignation negotiations and labor arbitration.

Additionally, developing the habit of "keeping records" at work is not only a basic workplace skill but can also help us reduce unnecessary troubles:

1. For important information regarding finance, contracts, or significant events, always write emails, copying relevant individuals and leaders to ensure that the parties involved confirm replies.
2. After meetings, it is best to generate meeting minutes, recording decisions made, next steps, and clearly assigning responsibilities and feedback timelines. Meeting minutes can be sent in the work group, and it is best to also email a copy.
3. When verbally communicating work with others, if you need their assistance, always send them a WeChat message afterward, reiterating specific requirements, timelines, and precautions. If you verbally invite someone to dinner or an event, also confirm the time and place via WeChat to avoid forgetfulness.
4. Even if the company does not require regular work reports, it is advisable to keep a record of work done on a daily, weekly, or monthly basis, clearly stating the time, events, participants, progress, and results. If necessary, send the work log to your direct supervisor — this not only proves that you have indeed completed your work without slacking off but also prevents others from taking credit or shifting blame.

4. Avoid mental exhaustion

In this environment, no one knows whether tomorrow or unexpected events will come first. After experiencing layoffs, do not be pessimistic or fall into dissatisfaction with past unchangeable facts. Layoffs are not entirely related to your personal abilities; work is just a part of life, and actively seeking a new life is the most important thing.

"When I first learned that I was laid off, I still felt a bit upset, even shedding tears in front of my boss." A programmer from a major internet company shared, "The project had just yielded some results, and I thought I could use this opportunity to get promoted."

"However, upon reflecting on my five years in Beijing, I realized that I had been busy every day, often just grabbing a quick breakfast, and even if I got off work early, it would be past nine. After a week of work, I just wanted to lie at home on weekends; this kind of life really lacked a sense of happiness." She thought carefully and realized that this layoff might not be entirely a bad thing for her, "Perhaps it is a chance given by fate to allow me to slow down and reassess my life. If I can't run, I can walk; if I can't walk, I can stand; if I can't stand, I can lie down. Life is long; I can't always be running."

5. Maintain a calm mindset and take positive action

After being interviewed, many people become negative, and their emotions hinder normal work. But if you can clock in and out on time, complete your work on schedule, and avoid being caught in mistakes — you can keep the initiative in your hands.

You also do not need to be overly obsessed with "after layoffs, working hard to achieve results to prove your worth to keep your job." Once decision-makers form subjective judgments, it is difficult to change. We suggest you invest your time in matters with a higher success rate. If there are opportunities for content work, consider trying to rotate to other teams. If you feel confident in your abilities, the success rate of interviewing with other companies will not be lower than your chances of salvaging your position in the original company.

Exhausting yourself mentally, losing the ability to rationally handle subsequent matters, or falling into a vortex of anger... Every minute spent in negative emotions will increase the resistance to overcoming the layoff crisis.

On the contrary, if you use this time to actively conduct periodic reviews of work results, structurally organize and summarize work methodologies, back up personal materials and documents, or try to invite valuable colleagues to dinner, engage in workplace socializing or activity platforms to connect with peers or industry experts, and utilize free time to read industry insight articles and identify new employer targets... Shifting your focus to these next steps will help you quickly enter a new, orderly life.

When the wave of layoffs rolls in, self-rescue is an attitude, and it is also the original intention of this article. Personal efforts may not create waves, but the "victim mentality" is also worth being cautious about.

From a more realistic perspective, the world will always meet again; "completely tearing apart relations with the old employer" should be the "last option" to avoid. If you receive a better new offer, if you can get a few kind words from your former employer during the background check, then not fighting to the end with your former employer may not be a loss — since you are destined to be owed, why not find a way to have your former employer repay you with something more valuable than compensation, a "human debt" that is dignified for both parties?

Some black tricks of layoffs + how to respond correctly when facing layoffs!#

Three tricks and corresponding strategies

Trick one: When compensation has not been negotiated, some HRs will say they will negotiate with the leadership, but they will take back your access permissions, computer, and work account, leaving you to wait for news at home. Then! A few days later, they will fire you under the pretext of being absent, without any compensation.

Response: If you notice issues with your account access, be sure to collect various evidence. Of course, when the company is preparing for layoffs, you should start collecting clock-in data, work daily reports, etc. Otherwise, you may be unable to collect evidence due to account expiration.

Trick two: When employees sign labor contracts upon joining, it states "the company has the right to unilaterally adjust positions." HR explains that this is the company's autonomy in employment, and then they transfer you to a very marginal or unsuitable position, forcing you to resign voluntarily without compensation.

Response: If there are such phrases in the labor contract, try not to sign it; otherwise, it will be detrimental to you when problems arise later.

Trick three: The company claims strategic adjustments require relocation to another city; if you can go, then go; if not, resign voluntarily. A year later, the company still hasn't moved. No compensation is provided.

Response: Continue working normally; as long as the company has not officially relocated, you should work normally. Even if relocation occurs, there is no need to resign so quickly. You can observe the situation first.

Six knowledge points when facing layoffs:

1. The calculation basis for compensation is the average total of all income (salary, bonuses, overtime pay, year-end bonuses, allowances, etc.) over the past 12 months, not according to the salary stated in the contract.

2. Verbal dismissal is invalid; you must work normally until you receive a formal written notice; otherwise, you may be arranged as absent. Dismissal must have a formal written notice with the company's seal. Otherwise, you may be misled by HR.

3. Pay attention to annual leave and unpaid overtime when resigning. If there are unused annual leave days, they should be settled at three times the daily salary standard, and overtime pay should not be forgotten. Of course, if negotiations with the company go smoothly, this can also be handled at your discretion.

4. When the contract expires, if the company is unwilling to renew or reduces the original labor conditions, the compensation will be N (length of service in years = N months' salary). In simple terms, unless there are special circumstances, the company is required to renew normally; if not renewed, compensation is required. The expiration of the contract does not equal voluntary resignation.

5. Resignation compensation is N months' salary for N years of service; less than 6 months = 0.5 months' salary; more than 6 months but less than one year = 1 month. This is well-known and needs no further explanation.

6. Layoffs should be notified 30 days in advance; if immediate departure is required, the compensation increases by one month = N + 1. If it is a voluntary resignation, 30 days' notice should also be given; during the probation period, only 3 days' notice is needed. Note: The company must approve voluntary resignations.