By Lucy Lu and Luo Jun King & Wood Mallesons’ Commercial & Regulatory Group
Elected by shareholders, the Board of Directors (hereinafter referred to as the “Board”) acts as the decision-making organ outside a company, and takes charge of inner affairs within a company, thus carrying significant influence in the field of commercial law; nevertheless, conflicts between the Labor Law and the Company Law are likely to occur in cases where the Board is involved in employment issues of senior managerial staff, resulting in possible practice of going around the Company Law on the premise of the Labor Law and overturning decisions made by the Board. Therefore, companies need to keep an eye on and differentiate cross-jurisdiction laws in the spirit to avoid legal conflict. The following is a labor dispute case reviewed by the Second Middle People’s Court of Shanghai concerning termination of contract of a senior executive in September, 2015. Since this case is of quotable significance to defusing conflict between the Company Law and the Labor Contract Law as well as the identification of reemployment matters in the case mentioned above, we extend the following discussion.
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