I. Case Playback

XiaoHong was a female worker in a manufacturing enterprise. The leaders praised for excellent performance many times. It bothered the leaders, however, that she had a bad temper which caused quarrels with her colleagues. XiaoHong herself also intended to find a new job due to the frequent conflicts. One month before the term of the labor contract was complete, she told the personnel manager that she would quit the job when her contract term was up, and the manager approved her request. XiaoHong handed her work over to others swiftly and also handled the procedures for transferring her files. She left the company at the date of the contract termination.
One week after her departure, she found that she was a little uncomfortable. After a hospital examination, she discovered she had been pregnant for one month. Realizing that it was difficult to find a job during pregnancy, she consulted with the original unit with the hope of restoring the labor relationship, but the unit turned down the request without hesitation.
So XiaoHong applied to the Labor Arbitration Committee requesting a restoration of the labor relationship. She thought that since she became pregnant before the labor contract term was due, in accordance with Labor Law, when a female staff member or worker is pregnant the labor contract should be renewed until the date when the lactation period is over. Although she found herself pregnant after leaving the unit, the fact is that the pregnancy occurred during the period of the contract, so the labor relationship should be restored automatically. The unit, however, insisted that XiaoHong's bad temper made a terrible impact upon the workshop when she was at work and expressed that they should have dissolved the labor contract long ago. Furthermore, the termination of the contract was at XiaoHong's will. Judging from the hospital diagnosis, she was pregnant after the agreement of contract termination was reached between the two parties. What’s more, the contract had long been terminated when she found herself pregnant. In a word, the unit refused to renew the contract.
    Is it legitimate for the female laborer to request a restoration of the labor relationship because she did not notice her pregnancy until after voluntarily terminating the contract?

II. Legal Background

The Labor Law rigorously restricts the right of employers to dismiss employees. Regulated in Article 25, Article 26, Article 27, there are only eight legally valid reasons for the employer to dissolve the contract. Among the eight reasons, the four reasons stipulated in Article 25 are caused by the fault of the employees, and the other four reasons in Article 26 and Article 27 are not based on the fault of the employees.
The Labor Law sets up Article 29 to restrain units from exploiting employees’ non-fault conditions for dissolving the contract. This could be regarded as the double restrictions on employee non-fault dismissal. Article 29 of the Labor Law stipulates four circumstances under which the unit shall not dissolve the labor contract with the laborer under the employee non-fault dismissal conditions listed in Article 26 or Article 27 of the Labor Law:
(1) the laborer being confirmed to have totally or partially lost the ability to work due to occupational diseases or work-related injuries;
(2) the laborer receiving medical treatment for diseases or injuries within the statutory medical treatment period;
(3) the laborer being a female staff member or worker during pregnancy, delivery, postpartum or lactation period;
(4) other circumstances laid out in laws, administrative rules and regulations.
Even if the employees are in accordance with one of the conditions stipulated in Article 26, the unit cannot dissolve the contract unilaterally if employees also meet the conditions listed in Article 29.
    The Labor Contract Law reinforces the double restrictions on employee non-fault dismissal. Article 42 stipulates six circumstances under which the unit shall not dissolve the labor contract with the laborer by referring to the non-fault dissolution conditions listed in Article 40 and Article 41 of the Labor Contract Law that the laborer:
(1) is engaged in operations exposing him to occupational hazards and has not undergone a pre-departure occupational health check-up, or is suspected of having contracted an occupational disease and is being diagnosed or under medical observation;
(2) has been confirmed as having lost or partially lost his capacity to work due to an
occupational disease or a work-related injury;
(3) has contracted an illness or sustained a non-work related injury, and the mandatory medical treatment period has not expired;
(4) is a female employee in her pregnancy, delivery period postpartum, or lactation period;
(5) has been working for the Unit continuously for no less than 15 years and is less than 5 years away from his mandatory retirement age;
(6) finds himself in other circumstances stipulated in laws or administrative regulations..
   It can be discovered that the Labor Contract Law increases the restrictive conditions for employee non-fault dissolution based on the statutes of the Labor Law, and it aims to decrease the chances of a unit unilaterally dissolving a labor contract. The restriction against dismissing pregnant employees, however, remains the same in both pieces of legislation.

III. Lawyer Debate 

The labor relationship should not be restored after the resignation of the laborer.
Lawyer Chunyun Pang from Beijing Guangsheng Law Firm Shanghai Branch in support of the unit

There are some special elements in this case, particularly that the laborer resigned of her own accord. Emotionally, I am sympathetic with XiaoHong, but from the perspective of the law, I believe that the labor relationship should not be restored because the pregnant laborer claims not to have noticed her pregnancy and thus, she requested to terminate the contract voluntarily. There is no doubt that XiaoHong was pregnant during the existence of the labor contract, but I think the focus of the case is whether her request can be supported. Personally, I believe the claim cannot be supported. The reasons are as follows:
First, The Labor Law states that the “contract shall be renewed until the end of the three periods (pregnancy, delivery and lactation)” which refers to the enterprise’s rights of dismissal and termination. This does not restrict the employee’s rights of resignation and termination. It is stipulated specifically in Article 29, Sub-Article 3 of the Labor Law and Article 34, Sub-Article 3 in Shanghai’s Labor Contract Regulation that the unit shall not exert the right of dismissal due to reasons of employee non-fault or the right of personnel reduction due to economic crisis during pregnancy, delivery, postpartum or lactation periods. So the stipulation of the ‘three periods’ restricts the rights of the units rather than the resignation rights of laborers. It is a reflection of the legal protections enjoyed by laborers.
Second, the contract was terminated due to XiaoHong’s resignation. One month prior to her contract term coming due, XiaoHong proactively decided that she would quit the job before the unit had determined whether or not to renew the contract, so it was entirely her own choice to terminate the relationship. Besides, as a married female, she had the ability to foresee the possibility of pregnancy. She resigned without foreseeing that she could become pregnant, which is a condition that she should have predicted but failed to do so. So, she should bear the responsibility.

The resignation can be withdrawn because she was unaware of the truth.
Lawyer Xu Song from Shanghai Huijing Law Firm in support of the laborer

I am convinced that XiaoHong could request the restoration of the labor relationship due to the following reasons. The female laborer requested to terminate the labor relationship without noticing that she was pregnant. The termination behavior was not the expression of her true will, thus falling into the category of civil actions with pending validity, and it can be rescinded in accordance with the law.
The labor relationship is regulated by both Civil Law and Labor Law. The labor contract relationship between the laborer and the unit is a relationship between equal parties. In this light, I prefer that the case be judged on the basis of the Civil Law stipulations related to cancellation rules.
Article 27 of the Law on the Guarantee of the Interests and Rights of Women stipulated that: “The units shall not lower the wage, dismiss female staff members or dissolve the labor contract or service agreement unilaterally for reasons of marriage, pregnancy, maternity or lactation. However, there is an exception when the termination is put forward by the female staff member.” This article entitles the female laborer the right to resign during pregnancy.
As we all know pregnancy is unperceivable during the early stages, so when she requested to resign, this was not a demonstration of Xiao Hong’s true will. If in ascertaining the validity of the resignation request we actually deny the legitimate right of the laborer to make an informed choice, this does not protect the rights of the women and fetus. Consequently, XiaoHong’s request to resign without realizing that she was pregnant is a civil behavior whose validity was uncertain, and therefore, it can be withdrawn .The labor relationship should be restored.

IV. Final Judgment

The Court believed that the process of pregnancy is a complex process itself. There is an interval between becoming pregnant and realizing one's pregnancy. It is true that XiaoHong was pregnant during the existence of the labor contract. She learned of her pregnancy after the termination of the contract, but the pregnancy existed before the termination. According to the Labor Law, if the female staff member is pregnant during the existence of the labor contract, the contract shall be postponed to the end of lactation period. So, the Court ruled that the labor relationship should be restored and the two parties should sign the contract again.

V. Expert Evaluation

Improving the maternity insurance system is the best radical cure.
Professor Dong Baohua from East China University of Political Science and Law

First, regarding the ‘legal force’ of the resignation put forward by the female staff member, the Labor Law only restricts the unit’s right to dissolve or terminate the labor relationship. That is to say, it is legitimate for the employee to dissolve or terminate the labor relationship. Article 27 of the Law on the Guarantee of the Interests and Rights of Women stipulates specifically that if the employee proactively put forth the resignation, it does not conform to the condition of postponing the contract term. Consequently, termination of the labor relationship should be regarded as valid.
Second, regarding whether the termination of a labor relationship can be rescinded or not, the Labor Law denies the system of rescinding. Someone suggested that the system in Civil Law could be referred to and stated that although there is no such system in Labor Law, when similar conditions occur, the regulations in Civil Law and Contract Law could be used as well. In this case, although it was XiaoHong's true will not to renew the contract, and the unit also agreed not to renew the contract. In fact, the true expression depended upon her lack of awareness that she was pregnant. If she noticed her pregnancy, she would not have resigned, or she would have told the unit the truth afterwards with the intention of cancelling the resignation. So, her behavior is a fundamental misunderstanding of Civil Law. Using this logic, XiaoHong could withdraw the agreement to terminate the contract and restore the labor relationship.
But in the field of Labor Law, I doubt if it is ideal to introduce the Civil Law-based system of withdrawal. A labor relationship has a property nature, but also has a strong personal nature. Generally, aspects related to the personal relationship cannot be withdrawn. So if a behavior has defects, there is no legal binding force for what has already been done but only for what is yet to occur.
As for the case, XiaoHong wanted to reclaim her job in the original unit, but the position might no longer exist or could have been obtained by others. If withdrawal of the resignation is permitted, should the unit reestablish the position or dismiss the new worker? Regular management is impossible if a resignation can be withdrawn. Besides, it will cause chaos; for example, there would be costs associated with dismissing the new staff and rearranging the original staff. Furthermore, the enterprise could become an employment welfare institution. So if the system of withdrawal expands, it will have negative social impacts.
Then how should the law ensure the rights of XiaoHong if her resignation action cannot be withdrawn? Our country now shifts the responsibility of ensuring the worker’s righs onto the enterprises, and the judgment of the case is just a reflection of such ideology.
The examination expenses and the medical costs during the maternity period are paid by the unit both in the planned economy and after the reform and opening. The unit also handles special treatment and nursing under other conditions. It was not until 1994 when the Ministry of Labor issued the Method for Enterprise Employee’s Insurance for Birthing and Infant Care (trial) that institutional reform of insurance for birthing and infant care was carried out in coordination with the implementation of the Labor Law.
   The core of the reform was to create a general society plan for supplementary insurance costs. Thereby, the part of the financial responsibility for women’s birthing and infant-rearing had been returned to the society. Although the responsibility has been partially shifted to the society, the range is too limited, and the responsibility concerning other physiological periods is still held by the units. This is why XiaoHong wanted to return to the unit. The difficulty of finding a job during pregnancy is another important reason. Assuming the burden of responsibility for these social costs conflicts with the economic unit’s need to earn maximum profits. This is the root cause of employment gender discrimination.

From LexisNexis