By Yin Juquan and Pan Faluan, King & Wood Mallesons’ Labor Group

After an employee has been illegally terminated, a court or arbitrator may order their employer to reinstate them and compensate them for lost wages. How will the amount of lost wages be calculated, given that the employee was not actually working for the employer during the relevant time period?

We will give a brief introduction to this topic through a review and analysis of Judgment no. 11644, (2014), Civil Tribunal, Beijing Second Intermediate People’s Court.

1. Summary of the Case

Employee A joined Company B on July 11, 2011. The labor contract between the two parties stated that A would be paid a monthly base salary of RMB 12,100 and a monthly performance bonus of RMB 9,900 (in the PRC, performance bonuses are generally fixed sums). As of January 2012, the base salary and performance bonus had been adjusted to RMB 14,520 and RMB 11,880 respectively (26,400 RMB in total). Company B terminated its labor contract with A on July 30, 2012.
Continue Reading Once a Labor Contract Has Been Illegally Terminated, How Will A Court Calculate Lost Wages?