Employment Claim Based on False Labor Contract Rejected by Court

Zhou was an engineer with a registered qualification certificate. A construction company signed a false labor contract with Zhou in order to use his certificate for enterprise qualification registration. After signing the contract, Zhou never came to the company for work. The company paid Zhou an annual fee of RMB 9000 for using the certificate. Zhou sued the company and claimed for labor remuneration based on the false labor contract. This case was submitted to the local Arbitration Committee and was later appealed to the court.

The court rejected Zhou’s employment claim on the ground that there was no actual employment relationship between Zhou and the company. According to Article 7 of Labor Contract Law of the People's Republic of China, the employment relationship between an employer and an employee shall commence on the date when the employee commences work. Zhou made the confession in court that he did not work for the company. The court held that Zhou was not an employee of the company and was not entitled to labor remuneration.

 

With the rapid development of China's construction industry, construction enterprises have a greater demand for engineers with certificates. Some enterprises choose to sign false labor contracts with the engineers only for using their certificates for qualification registration, which may bring serious legal risks to the enterprises. Labor law disputes and litigations may be triggered by these false labor contracts. Moreover, the enterprises may be subject to administrative sanctions for such illegal behavior.