Summary of Key Points
Xingyu Co., Ltd. (a listed company on the A-share market) hired 440 fresh graduates this year. Just over a month after they started working in July, 107 of them were persuaded to leave the company. The company used tactics such as "forced reassignment to manual positions" and "salary cuts" as threats, or implied that failing to resign voluntarily would affect their background checks, prompting them to sign resignation agreements citing "personal reasons," while only offering them half a month's compensation. After the incident became public, the company apologized and promised to provide three months of living allowances and help with finding new jobs. If they remained unemployed for three more months, they would receive six months' salary. However, the article argues that this is not just a simple case of negligence but may involve illegal behavior that cannot be resolved with mere apologies and financial compensation. If leading companies evade legal responsibilities, it can undermine industry standards and harm workers' rights. There may also be underlying motives related to the company's plans to restart its "A+H listing" (simultaneous listings on the A-share and Hong Kong stock markets), possibly in an effort to streamline its operations, which requires regulatory intervention.
Detailed Analysis
1. The Tactics Used to Persuade Employees to Leave Are Illegal
Xingyu Co., Ltd.'s methods of persuading employees to leave are more akin to coercion than negotiation and potentially violate several laws:
- Forced reassignment is illegal: The job position specified in the employment contract (management/technical role) cannot be changed unilaterally by the company; both parties must agree. Reassigning a graduate to a manual position and reducing their salary is clearly demeaning and punitive, which is not permitted by law.
- Threats of background checks constitute coercion: HR personnel claimed that if employees did not sign the resignation agreement, their records would be shared in a local HR group, affecting their future job prospects. According to the law, a resignation agreement signed under duress can be revoked and is not legally binding.
- Signing resignation agreements citing "personal reasons" is a way to avoid compensation: If the company terminates the contract legally, it is required to pay half a month's salary for each month of employment; if the termination is illegal, it must pay one month's salary (twice the amount). By having employees sign agreements citing personal reasons, the company aims to pay less or nothing at all, taking advantage of legal loopholes.
- The mass layoffs did not follow proper procedures: Laying off 107 employees at once, which exceeds the legal limit of 20 employees, requires the company to notify the labor union and all employees 30 days in advance and report the layoffs to the labor authorities. The company secretly met with each employee individually, which is a clear violation of procedure.
2. Apologies and Financial Compensation Are Insufficient
Why are the company's remedial measures ineffective?
- The negative precedent is significant: As a leading company in the industry, if Xingyu can get away with illegal actions through financial compensation, other companies may follow suit. This would create a situation where employers can use threats and manipulation to lay off employees, leaving workers' rights unprotected.
- The law is not a mere formality: Illegal actions must be punished; apologies alone cannot replace legal consequences. If regulatory authorities do not take action, workers may feel that the law does not protect them, which undermines public trust in the legal system.
3. Fresh Graduates Suffer a Double Blow, Making Job Hunting More Difficult
These newly graduated students face significant losses:
- Loss of their status as fresh graduates: Many companies have strict time limits for hiring fresh graduates (e.g., within one year of graduation). With their employment period lasting just over a month, their status as fresh graduates may be invalidated, leaving them with no advantage in the job market due to a lack of work experience.
- Psychological and financial pressure: They are both emotionally affected by the humiliating treatment and suddenly faced with unemployment, leading to financial difficulties such as rent and living expenses, making it difficult for them to recover in the short term.
4. Could the Layoffs Be Related to the Company's Listing Plans?
A week before the incident, Xingyu Co., Ltd. restarted its plans for an "A+H listing." Listing requires impressive financial statements, and cutting costs (such as through layoffs) can improve profit figures, making it easier to pass the listing review. This could be a underlying motive for the company's aggressive layoffs.
5. How Should the Incident Be Resolved?
The article suggests that the issue cannot be simply ignored:
- Labor authorities must intervene: They need to determine whether the company has indeed violated the law and impose appropriate penalties, such as requiring compensation or fines.
- The company must comply with regulations: It must ensure that future layoffs follow legal procedures.
- The capital market should consider ESG (Environmental, Social, and Governance) criteria: Investors and stock exchanges are increasingly concerned with ESG, including corporate responsibility towards employees. If Xingyu treats its employees poorly, investors may refuse to buy its stock, and stock exchanges should also hold it accountable.
Only by taking these steps can the company address the issues faced by the affected graduates and prevent similar violations by other companies. Otherwise, the harm will extend beyond these 107 individuals, affecting the credibility of the law and workers' rights as a whole.