China woman fired due to husband’s rival firm job receives US$101,000 for unjust dismissal

A Shanghai company has been ordered to pay a woman employee 690,000 yuan (US$101,000) for illegally firing her because her husband works for a rival firm.Xuhui District People’s Court made the ruling in Shanghai in late April, the Yangtze Evening News reported.The woman, surnamed Liu, started working at the company in 2006. The firm’s name was not disclosed in the report, only that it operates in the property management industry.At the end of 2023, Liu received a notice from her employer telling her that they had decided to terminate her labour contract because her spouse works as the general manager of a rival company.Chinese staff working in an office in the city of Dongguan in the southern province of Guangdong. Photo: ShutterstockHer employer said this had brought “adverse effects” to the company.Liu filed a labour arbitration complaint in February of 2024, requiring her former employer to pay her salary compensation of 680,000 yuan (US$100,000) plus a 60,000 yuan (US$9,000) bonus for 2023, and another 10,000 yuan to cover her untaken annual leave.Two months later, the labour arbitration committee made a decision that the employer should pay Liu 680,000 yuan in salary compensation and 10,000 yuan (US$1,500) for her untaken annual leave.Not accepting this result, the company filed a lawsuit.People crossing the road in the commercial district of Shanghai, the city in which the case unfolded. Photo: AFPIt claimed that as an operations manager, Liu had access to data and other confidential information. Her husband, Li, set up a company in the name of his mother and it is a competitor in the industry.Online posts showed that Li attended industry exhibitions as the general manager of the rival company.Liu said that she did not know any confidential information her former employer held and she only played a supporting role in the job.Her husband does not actually work for that so-called rival company.Further ReadingHe claimed to be its employee when taking part in industry events because it is “convenient for him to carry out his work”, said Liu.The court found that Liu’s former employer did not provide sufficient evidence to prove that her husband had taken advantage of her position to sabotage its interests.Thus, the court upheld the labour arbitration committee’s decision, confirming that the dismissal of Liu was illegal.The court said it is common that couples work in two different companies in the same industry.According to Labour Contract Law, the non-compete clause only applies to senior managers, senior technicians or those who have the obligation to keep secrets.The company tried to counter-sue the woman, but the court sided with the sacked employee. Photo: ShutterstockBesides, such employees should sign a written agreement with their employers in advance, the law stipulates.In this case, Liu is not an executive nor has she signed any non-compete agreements with her employer, the court said.The case soon gained traction online.“I understand this company. If I were the boss, I would also let her go. I do not believe she would not disclose any business secrets to her husband,” one online observer said.Another person said: “It is fine to sack an employee, but you need to compensate.”