Is it Compulsory to Obtain Employee’s Consent on Relocation​?

​This case was represented by Yun Ya Lawyer, listed as Typical Labor Law Arbitration Cases in Wuxi.

Li and the Company concluded a non-fixed term labor contract in 2013. The place of work specified in the labor contract was Wuxi. The Company’s address was in Xishan District, Wuxi.

Since 2018, the Company expanded the scale of production and built a new factory in suburban area of Xishan Distract. In November 2018, the Company decided to transfer part of the employees to work in the new factory. The Company provided the lunch at new factory and arranged shuttle bus to pick up the employees. 

Li was informed of the change of workplace as one of the transferred employees. However, Li rejected to work in the new factory after several calls and notices from the Company. On 27 November, the Company issued a formal notice to Li and required him to work in the new factory within 3 days, which stated specifically that if Li fails to do that, the Company will terminate the labor contract based on his continuous absence of work. Li still did not appear to work in the new factory. On 1 December, after informing the labor union, the Company terminated the labor contract with Li based on the reason of continuous absence of work and violation of rules of Employee Handbook.

Li considered the relocation was a change of his labor contact which the Company should obtain his consent. He submitted this case to Labor Dispute Arbitration Committee and claimed for the severance payment on wrongful termination. Zhang Jihong, Labor Law Lawyer from Yu Ya represented the Company and won the case.

According to Article 17 of Chinese Labor Contract Law, the place of work should be specifically agreed in the labor contract, while the change of workplace does not always constitute a significant change of contract. If the employer changes the workplace to another city or be far apart from the previous workplace, which causes significant inconvenience to the employee, it may be regarded as change of labor contract. In that case, relocation shall be discussed and agreed by the employee. However, in Li’s case, the new factory is within the same city, even the same district as the previous workplace. The distance between the two locations was not far. Meanwhile, the Company has taken several measures for making up the inconvenience to the employees brought by the relocation, such as providing free shuttle bus and transportation allowance. The court ruled that the change of workplace did not constitute a change of labor contract and Li has no rights to request severance pay either.

It is common for companies to consider changing the workplace due to some business reasons, while it is suggested to communicate with employees in advance. If the relocation does not cause significance impact on employee’s life, employer is not obliged to obtain consent of employees. For further legal consultation over labor law compliance, please do not hesitate to contact Yun Ya lawyers.