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Ten Typical Cases of Labor Disputes With Senior Executives Ⅴ

2021-03-10

On December 4, 2020, the Beijing Intermediate People’s Court No. 1 held a press conference to inform of labor disputes involving senior executives in recent years and issued the "Beijing’s Ten typical labor dispute cases." River Delta Law Firm conducted a comprehensive interpretation of the ten major cases and put forward corresponding management suggestions for employers.

Case 5: Senior Executive Under Irregular Working Hours System Are Not Paid Overtime Wage
 
Introduction
Ge joined a software company as a General Manager on July 1, 2015. On March 15, 2016, the two parties terminated the labor relationship. Ge asked the company to pay overtime wages from January to March 2016 and sueed in court. After the trial, the court held that Ge, as General Manager, was a Senior Executive. Under the premise of the application of the irregular working hours system, even if when working overtime or during rest days, it cannot be regarded as overtime. Therefore, Ge's request for overtime wages is not supported.
 
Judge Interpretation
Company’s Senior Executives are responsible for the daily business management of the company. Due to the need to handle various emergencies and management needs at any time, working hours are uncertain and flexible. Where a company’s Senior Executive requires the payment of overtime wages, it shall be reasonably confirmed on the basis of respecting the agreement of both parties and with reference to the working hours system and wage details. If the employer and the Senior Executive agree to implement an irregular working hours system, and the Senior Executive requires the employer to pay overtime wages, it should not be supported.
 
Lawyer's suggestions
Senior Executives’ claim that overtime can be supported depends mainly on whether they implement a standard or irregular working hours system. If irregular, there will be no payment for working longer hours or during rest day. In addition, in accordance to relevant local regulations on wage payment in various regions, if Senior Executives work on statutory holidays, their overtime claims will be supported in most regions.
1. For Senior Executives, clearly stipulate in the labor contract the applicable working hours system and working hours;
2. Determine whether the local regulations require an approval to use the irregular working hours system for Senior Executives;
3. Establish an overtime management approval system, especially in the company’s rules and regulations, to clarify whether overtime management rules apply to Senior Executive. and the calculation of overtime wages;
4. In the event of a labor dispute over a Senior Executive’s overtime pay, the defense and response are mainly from the perspective of the burden of proof, the Senior Executive must be able to prove the completed overtime.

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