Must an employee work the full 30 days after resigning, and can the employer dismiss in that period?

Article 37 of the Labor Contract Law requires an employee to give the employer 30 days' written notice before terminating the employment contract. In practice employers or employees often part before the 30 days have run. Does that breach the law?

From the employee's point of view, an employee who no longer wishes to work for the employer and wants to leave unilaterally is exercising a right of personal disposal. The purpose of the 30-day rule is to give the employer enough time to deal with a sudden departure and avoid loss to its operations, not to restrict the employee's right to terminate. An employee who does not give 30 days' notice, or who gives notice but leaves before the 30 days have run, therefore breaches the rule, but that does not affect the validity of the termination: the contract may still be terminated. If the employer suffers loss as a result, however, the employee must compensate it.

In a case where compensation was awarded, (2022) Hu 0113 Min Chu No. 23191, the court held that an employee terminating the relationship unilaterally must give the defendant 30 days' notice, and that failing to do so and causing loss gives rise to liability. The claimant employer might indeed have had to engage a temporary replacement at extra cost, so the court, taking account of the replacement arrangement and the defendant's wage level, determined at its discretion that the defendant should compensate the claimant RMB 750 for the replacement.

In a case where compensation was refused, (2024) Hu 0118 Min Chu No. 3951, the court held that an employee may terminate by giving 30 days' written notice, and must compensate loss caused by failing to do so, unless the parties have agreed otherwise. In a recorded conversation of 6 February 2023, Mr Ma told the defendant to prepare a handover sheet and not to come to work from the next day; the defendant agreed and prepared the handover sheet, which he delivered to Zhou Qi as the claimant had directed. The court held that the parties had reached agreement on the handover and other matters following termination, and that by completing the handover the claimant had released the defendant from the obligation to give 30 days' written notice. The defendant had performed the handover as agreed and the claimant had not shown any material error in it, so the claim for loss caused by terminating without 30 days' notice was not supported.

From the employer's point of view, where an employee gives 30 days' notice, must the employer wait until the 30 days have expired before ending the relationship?

One view is that an employee who gives notice has fixed the departure date at the end of the 30 days, so the relationship must continue until then; if the employer ends it earlier, that is an unlawful termination and compensation is payable.

The other view is that the 30-day rule limits the procedure by which an employee exercises the unilateral right to terminate without cause, so that the employer can find a suitable replacement and arrange the handover during those 30 days. When the 30 days expire, the employee has performed the procedural obligation and may leave even if the employer does not agree to the termination. If, however, the employer accepts the resignation during the period, the parties may terminate the relationship and no economic compensation is payable.

I incline to the second view. On the one hand, the 30 days is the notice period for termination by the employee, and the employer may waive the benefit of it. On the other hand, nothing requires the employer to wait 30 days before ending the relationship; the choice lies with the employer as part of its autonomy in employment. In (2023) Hu 0117 Min Chu No. 3508 the court held that Mr Li had signed a resignation notice and resigned from Company W on 25 August 2022, and that Company W processed his departure on 26 August 2022, which showed that it had waived the notice period and agreed to bring the termination date forward. Processing the departure did not affect the reason for termination, that is, it did not alter the fact that the contract had been terminated because Mr Li had resigned on grounds of health. His claim for compensation for unlawful termination therefore lacked a factual and legal basis.

The final question is whether the employer may dismiss an employee who commits serious misconduct during the 30-day notice period.

Although the resignation has taken effect, the contract remains valid during the 30 days, and both parties must act in good faith while the relationship subsists, so the employee must still observe labor discipline and internal rules and perform his or her duties. If the employer decides to terminate during those 30 days, the decision still takes effect. The employer bears a relatively strict burden of proof, and if it does not meet that standard it risks an unlawful termination. In (2018) Hu 02 Min Zhong No. 10696 the court held that under Article 37 of the Labor Contract Law an employee may terminate by giving 30 days' written notice, and that the 30 days is the notice period, during which both parties must fully perform their rights and obligations under the contract. The employer may exercise its management rights and impose discipline when it discovers misconduct. The kitchen company had therefore acted properly in terminating during the statutory notice period after discovering Mr Chen's serious misconduct, and was not liable for compensation for unlawful termination.

In summary, Minton suggests that where an employee resigns, both the employer and the employee should decide with a full understanding of the rules. They should not act hastily and provoke a dispute, and may consult a lawyer to prevent one arising and to protect both sides' interests.