Reasonableness Standard Applied to Employee Transfer - International Law Office

In November 2007 the Shanghai Songjiang District Court reportedly ruled that the unilateral transfer of an employee was unenforceable because the transfer was unreasonable.

The employee, Ms Li, was employed as the director of the liaison office of an unidentified company. When she was seven months pregnant, she was ordered to transfer to the home office because of her alleged failure to meet sales targets. The company reportedly did not arrange a specific job for her at the new office. Li not only refused to accept the transfer, but also refused to report for work at the liaison office. The company fired her and Li sued for wrongful termination.

The court reportedly stated that a provision in an employment contract which gives the employer the right to adjust the position of an employee is enforceable. However, the court also ruled that the employer's exercise of such a right must be reasonable. In this case the court found that the company had failed to show that the transfer was reasonable. Therefore, the court ruled in Li's favour and awarded her five months' pay, totalling Rmb26,000.

For further information on this topic please contact Andreas Lauffs at Baker & McKenzie's Hong Kong office by telephone (+852 2846 1888) or by fax (+852 2845 0476) or by email (andreas.lauffs@bakernet.com).