By Jiang Junlu, Zhu Yuting, King & Wood Mallesons
In recent years, with the employment situation becoming gradually grim, some employees tend to “embellish” their resumes to enhance their competitiveness in a job interview. After signing the employment contract with the employee, once the employer discovers that the employee’s resume submitted during the interview contains false information, the employer may choose to unilaterally terminate the employment contract. Under this situation, what an employer can do to reduce the legal risk of being deemed as wrongful termination? We will discuss this issue through a review and analysis of a case in Tianjin.
In January 2013, Mr. Han was employed by a manufacture company in Tianjin (hereinafter referred to as “Company A”). Both parties executed a two-year employment contract and agreed the position of Mr. Han was “General Manager”. After coming on board, Mr. Han’s capacity for work showed in the daily performance was far from satisfactory to meet the job requirements of a general manager, which aroused the suspicions of the Company A to Mr. Han’s employment record. After verification, Company A discovered a serious discrepancy between the resume provided by Mr. Han and his real working experience. Company A believed that Mr. Han’s behavior of submitting false resumes and establishing an employment relationship by deceiving has seriously violated the stipulations of the PRC labor law, employment contract, as well as Company A’s employee handbook. On 24 May, 2013, Company A issued a termination notification to Mr. Han and unilaterally terminated the employment contact with him.
Mr. Han refused to accept the termination decision made by Company A and regarded Company A’s termination as illegal, therefore he filed an application to one labor dispute arbitration committee of Tianjin and required to reinstate the employment relationship with Company A. This case went through the legal procedures of arbitration, first instance, second instance and retrial, each and every arbitration award and judgment held that the termination is wrongful and Company A should continue performing the employment contract with Mr. Han.
Main Reasons of the Arbitration Award and Judgments
The arbitration committee held that: (1) Company A cannot prove the resume submitted in court was exactly the same resume submitted by Mr. Han during the recruitment; (2) Company A can hardly provide evidence to prove any “fraud” behavior existing during Mr. Han’s interview.
The first-instance court held that: the employee handbook, based on which Company A terminated the employment contract, did not go through the democratic procedure. Thus it cannot be used as the basis of Company A’s termination decision.
The second-instance court held that: Company A claimed that Mr. Han falsified resume and the employment contract was signed against its true intentions, these facts could render the contract void. However, all related evidence and materials submitted by Company A during the second instance were circumstantial evidences, which cannot mutually form an integral chain of evidence chain.
The retrial court held that: Although Mr. Han made some exaggerated description to certain working experiences in the submitted resume, took taking the whole facts and pertinent evidences into consideration, those unreal descriptions were insufficient to impel Company A to sign the employment contract with Mr. Han against its true intention. Besides, Company A should also be responsible for its lax reviewing before hiring a senior manager.
The case has gone through a completed procedure of litigation from arbitration procedure to retrial procedure, a completed procedure of litigation. Even though the arbitration award and the judgments all held Company A accountable for wrongful termination, they were made based on different causes. Considering the different perspectives and views held by the arbitrators and judges, combined with our experience concluded from previous similar cases, we summarize the following points for companies to concern when they hire new employees and dismiss employees who submitted false resume.
Comments on Arbitration Award and Judgments
1)When firing employees with fraud resume, company could make the decision based on Article 39.2 and/or Article 39.5 of the Employment Contract Law.
Article 39.2 and Article 39.5 of the Employment Contract Law state that, the employer is entitled to unilaterally terminate the employment contract in case the employee is found to seriously violate the employer’s internal regulations, or force the employer to execute an employment contract against its real intention by deception or coercion. Therefore, the company may unilaterally terminate the employment contract base on either/both of these two articles, which however have different requirements on the company with regard to the burden of proof.
When proving employee’s serious violation of the company’s internal regulations, the company usually needs to prove: (1) the employee committed the alleged misconduct; (2) the company has effective and valid internal regulations (e.g. the employee handbook) which have gone through the democratic process and publicizing process; (3) the internal regulations explicitly specify that submitting a false resume is severe enough to justify an immediate termination.
When proving the fraud conducted by the employee to the company resulted in the void of the employment contract, the company usually needs to prove that the employee has deliberately provided the false information or concealed the truth from the company while executing the employment contract, and which directly deceived the company to sign the contract against its real will.
2)The company needs to appropriately preserve evidence to prove the false resume was submitted by the employee himself/herself, and he/she was fully aware of its false content.
Nowadays, plenty of employees provide their resumes to the company via internet (such as recruiting website, e-mail) or headhunters. Under such ways, the sender of the resume is usually hard to be identified, and the resume is easy to be modified. In case of any disputes occurred, employee may deny the resume kept by the company is the one submitted by himself/herself.
In light of this, when recruiting a new employee, company could request him/her to sign on the printed resume to claim such resume was submitted by the employee himself/herself and all the included content is real, effective and accurate. As a result, the employee can hardly deny that the resume was submitted by himself/herself, or argue he/she has no idea of the false information contained in the resume.
3)Examination and diligence obligation should be performed in new recruiting employee recruitments
In this case, Company A once asked Mr. Han to submit certificates related to the working experiences recorded in the resume for reference check, but Mr. Han made excuses for not providing. An important reason adopted by the retrial court to hold the termination illegal was that Company A should also be responsible for its lax reviewing before hiring a senior manager.
Therefore, it is advisable for the company to conduct a reference check to confirm the authenticity of employee’s resume during recruitment, especially when it comes torecruiting important positionsemployees. If the company still fails to discover the false information in the resume after performing the obligation of examination and diligence, it could argue that it has fully performed its duty and proves the employee’s deliberate deception is solid.
4)Companies may need to prove the false content has affected the daily performance of the employee
In our previous practice, some arbitrators and judges may pay attention to whether the false information in the resume has affected the employee’s working performance. If the employee simply exaggerated part of the facts and caused no effect on his/her working ability, while the company tends to terminate the employment contract on this grounds after the employee has worked for the company for a long time, the arbitrator and the judge may not hold the termination legitimate.
In conclusion, it is advisable for the company to examine the authenticity of employee’s resume at the time of recruitment. After the execution of the employment contract, in case any false information is found in the resume and the company wants to dismiss the employee based on that ground, evidence collection as stated above will be considerably essential to prove the legitimacy of the unilateral termination.
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