Question raising

On February 1, 2019, Zhang joined Company A to work in sales. Both parties signed a one-year labor contract. On January 31, 2020, the labor contract expired. The next day, Zhang continued to work at the company as usual, and Company A also accepted Zhang's work as usual, but neither party mentioned renewing the contract. In the following months, Company A also paid Zhang a normal salary. This situation lasted for more than half a year. One day, Company A informed Zhang that he would no longer be used for work, citing his recent poor performance. In addition, the labor contract between the two parties had already expired and they wanted to terminate the labor contract with Zhang. Zhang was very shocked and believed that the company had illegally terminated the labor contract, so he sued A company in court to demand economic compensation.

Lawyer Interpretation

Article 34 of the Interpretation of the Supreme People's Court on the Application of Law in the Trial of Labor Dispute Cases (1) stipulates that after the expiration of the labor contract, if the employee still works in the original employer and the original employer does not object, it shall be deemed that both parties agree to continue to perform the labor contract under the original conditions. If one party proposes to terminate the labor relationship, the people's court shall support it.

From the above provisions, it can be seen that the court has recognized that the unit can terminate the labor relationship in this situation. However, due to the increasing number of such cases in practice, new opinions have emerged in the legal field. A new perspective suggests that if this form is recognized, it will lead to many problems:

Problem 1: Chaos in labor management

The legislative purpose of the Labor Contract Law is to protect the rights and interests of workers, maintain stable labor relations, and standardize labor management. After the expiration of the labor contract, if it is no longer renewed under normal circumstances, the contract should be terminated and corresponding economic compensation should be paid. If employees need to continue working, a written labor contract should be signed. It should not be allowed to terminate or renew a written contract after its expiration, while continuing to perform such a situation. This can easily put labor relations in an uncertain state and bring certain chaos to labor management.

Problem 2: Chaos leading to double the salary for unsigned contracts

According to the Labor Contract Law, if an employer fails to sign a written labor contract with an employee for more than one month but less than one year from the date of employment, they shall pay the employee twice the monthly salary. It can be seen that the Labor Contract Law is a mandatory requirement for signing a written labor contract. If the contract expires but is not renewed but still being fulfilled, it will also raise the question of whether to pay double the salary of the unsigned contract. Through case studies, court rulings vary in practice. Some courts believe that double wages should be paid, and some local regulations also confirm that double wages are required in such situations. But some courts also believe that if the two parties continue to work after the expiration of the labor contract, although they have not signed a new labor contract, it does not belong to the situation of "the employer's self employment date...", and should be regarded as both parties agreeing to continue to perform the labor contract under the original conditions, so double wages are not supported.

Problem 3: Chaos of arbitrary termination of contracts

According to the provisions at the beginning of the article, if the labor contract has not been terminated or renewed but is still being fulfilled, either party may propose to terminate the contract during this period. In practice, such situations often occur when the unit proposes termination. If employers are allowed to terminate their employment relationship at any time under such circumstances, it will provide opportunities for some units that intentionally infringe upon the rights and interests of employees. The unit may intentionally not renew the labor contract with the employee whose contract has expired, but still allow the employee to provide labor and further control the initiative to terminate the contract at any time. This will seriously affect the legitimate rights and interests of the employee, indirectly encouraging such malicious behavior.

In summary, there are still various opinions in the current practice of handling such situations. However, in order to prevent the risks mentioned in the above analysis, it is still recommended that the unit renew the contract with the employee in a timely manner when the labor contract expires and the employee needs to continue to provide labor. If an employee does not cooperate with the renewal, they should notify the employee in writing to terminate the employment relationship.