12 May, 2016
In March 2016, the Beijing No. 2 Intermediate People’s Court ordered a company to reinstate a female Office Administrator who was dismissed upon reaching 50 years of age. Under the law, when an employee reaches the statutory retirement age, the employment contract automatically ends. In its judgment, the court examined in detail the issues relating to female employees’ statutory retirement age.
The court analysed various laws and regulations and confirmed that the law on a female employee’s retirement age is as follows: the retirement age should be 55 years of age for a “cadre” (ganbu) or a technical employee, and 50 years of age for a “worker” (gongren).
The court also acknowledged that nowadays, the “identities” (shenfen) of “cadre” / “worker” no longer exist in most companies, and therefore, the common practice of local labor authorities is to determine a female employee’s retirement age based on the employee’s job position, i.e., whether it is a managerial / professional / technical position or not, as defined in company policies or according to the employment contract. The court concluded, however, that the labor authorities’ policies and views are not legally binding or capable of being applied by the court. Further, as the labor authorities fail to clearly define the “managerial”, “professional” and “technical” positions, it renders their guidance difficult to follow in practice.
In this particular case, the employer had entered the employee’s “identity” into the social insurance system as “cadre”. Also, the company’s policy clearly stated that “With the company, a ‘managerial position’ refers to such position that is of the department leader level or above, and the employee in that position has the authority to manage other employees; all other positions are non-managerial positions.” This company policy was adopted in May 2012 through employee consultation with the final publication step notarized by the notary public. The employee’s employment contract also contained the employee’s agreement to abide by the company’s policies.
The court ruled that the employee should not retire until age 55 as the records in the social insurance system showed that the employee joined the company as a “cadre” and the company had failed to provide sufficient evidence to prove that the Office Administrator position that the employee held at the company was a “worker” position.
Key Take-Away Points:
The current retirement age rules are based on very old laws and regulations. In many cities, the local labor authorities and some local courts (e.g., in Shanghai) have their own guidance on how a female employee’s retirement should be determined. Many jurisdictions apply the law in a similar way to the Beijing labor authorities, i.e., female employees’ retirement age should be determined based on the employee’s job position (i.e., 55 or 50, depending on whether it is a managerial / technical position). This case illustrates that in some jurisdictions, the court’s practice differs.
Employers should have clear policies setting out what roles fall under the category of “managerial”, “professional” or “technical”. It would also be prudent to check what identity an employee is registered under in the local social insurance system.
For further information, please contact:
Jonathan Isaacs, Baker & McKenzie
jonathan.isaacs@bakermckenzie.com
