Three days' absence where the rules are silent: serious breach of labor discipline?

The facts

Ms Ding joined an industrial company in December 2018 as a marketing promoter under a three-year employment contract providing for a salary of RMB 5,500 a month. Ms Hu last worked at the investment company until 9 July 2019, and on 16 July the industrial company issued her a notice of termination on the ground that Ms Ding had been absent from work for three days, from 10 to 12 July 2019, in serious breach of labor discipline. Ms Ding disputed the decision and applied for arbitration in August 2019, claiming RMB 11,000 in compensation for unlawful termination.

The parties' positions

Ms Ding said that on 2 July 2019 she asked her supervisor orally for three days' leave, from 10 to 12 July, and that he agreed. At midday on 9 July she confirmed with him again about taking leave from the next day, and he told her that as she had been employed for less than a year she had no annual leave, and that if she wanted personal leave she would have to email the director. That afternoon she emailed the director to request personal leave, and after working hours the director replied refusing it on the ground that she had not given a reason. Ms Ding's position is that the reason for personal leave is a private matter which she was under no obligation to disclose to the company, that there was no basis whatever for the director to refuse, and that because the reply was not given during working hours it was ineffective. She added that even if the company regarded her as having been absent for three days, no rule of the company provides that three days' absence permits termination for breach of discipline, so the termination was unlawful and compensation should be paid.

The industrial company's position is that Ms Ding did not apply for leave on 2 July at all. She asked her supervisor orally for personal leave only on 9 July, and he told her to email the director. She sent the email that afternoon and, after it was refused, made no reply and did not speak to her supervisor, and then did not come to work for three days, which should be treated as absence. Although the company has no rule on how many days of absence permit termination, the prohibition on absence from work is a matter of labor discipline that accords with ordinary common sense, so the termination was lawful and reasonable and no compensation is payable.

The issue

Where the internal rules are unclear, does three days' absence amount to a serious breach of labor discipline?

The award

The arbitration commission held that, her application for personal leave having been refused, Ms Ding should have attended work as normal. Her unauthorised "leave" from 10 to 12 July was not only an absence from work but, in character, a refusal to submit to the company's management, showing a subjective resistance and rejection that plainly contradicts the employee's statutory duties to supply labor as agreed in the employment contract and to observe labor discipline and professional ethics. The company's view that her conduct amounted to a serious breach of labor discipline was well founded and proper, and its termination complied with Article 25(2) of the Labor Law, so no compensation was payable.

Commentary

Labor discipline means the norms and standards of conduct that an employee must observe in performing the employment obligation, centred on the supply of labor to the employer and bounded in time and space by the employee's working hours and workplace. It generally covers working hours, attendance requirements, dress requirements, leave requirements and procedure, reporting requirements, handover requirements, and the steps and detailed rules for each post. Reasonable and clear labor discipline helps an employer maintain order in the management of its workforce, reduce human resources costs, raise the efficiency of production and operations and reduce the number of workplace accidents.

An employer is not the only source of rules on labor discipline: the State has also issued provisions on the subject. Although the Regulations on Rewards and Punishments for Enterprise Employees issued by the State Council in 1982 have been repealed, their provisions, which are full of the features of the employment system of the time, still have something to offer as a reference. Article 11 of the Regulations provided that an employee who breached labor discipline by frequently arriving late or leaving early, being absent from work, slowing down, or failing to complete production or work tasks, and who did not correct the conduct after criticism and education, should be given an administrative sanction or an economic penalty. By listing lateness, early departure, absence, slowdown and failure to complete tasks as clear breaches of discipline, the Regulations show that not arriving late, not leaving early, not being absent, working actively and completing production and work tasks are the most basic requirements of an employee, and are norms of labor discipline that are widely known, accepted and recognised in society.

Article 18 of the Regulations provided that where an employee was absent from work for more than 15 consecutive days, or for more than 30 days in total within a year, the enterprise had the right to strike the employee off its rolls. That article did not deal with lateness, early departure or slowdown, which shows that absence was regarded as the more serious matter. The thresholds of 15 consecutive days and 30 days in total look generous and mild by today's standards, but they suited the planned, state-managed employment system of the time. The employment system has long since completed its transition to regulation by the market and management through employment contracts, and many employers now adopt rules and labor discipline through a democratic procedure and set the threshold for dismissal at three, five or seven days' absence, which both suits the features of workforce management today and reflects the enterprise's autonomy in running its business.

Some enterprises, however, do not specify how many days of absence permit termination. That leaves them without an institutional basis for dealing with an absent employee and creates obstacles when a dispute has to be resolved. In arbitration or litigation it becomes necessary to consider the reasons for the absence, the conduct of employee and enterprise before and after it, whether there was negligence or intent, and whether the parties fulfilled their duties to negotiate actively and to act in good faith and diligently, and the outcome often turns on the adjudicator's own assessment and discretion in the individual case.

Returning to this case, Ms Ding knew clearly that her application had not been approved and went ahead regardless. Her conduct showed indifference to the company's normal operating order and resistance to its reasonable management arrangements, and breached the employee's duty of loyal and diligent performance. Taken together with the fact of three days' absence, it can be characterised as serious, and the company's decision to terminate for serious breach of labor discipline was well founded, so her claim was not upheld.

What the case shows

Specifying in the internal rules the number of days' absence that permits termination for breach of discipline is the simplest and most efficient way to manage attendance. Where no such rule exists, it should on the one hand be added, and on the other hand, when an employee is absent, the employer should first actively call the employee back to work and inform the employee of the number of days absent and the consequences, and only then proceed to terminate for breach of discipline.