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Corporate Social Responsibilities



Content provided by : China Center for Labor and Environment
1 May 2009
Severance Compensation Based on Actual Wages

A company underpaid an employee's severance compensation by 3600 RMB after dissolving the employee's contract. The reduced amount of compensation was based on the employee's basic salary. After the employee went for arbitration, the arbitration committee ruled that severance compensation should be paid according to the employee's actual wages which may include hourly wages or piecework wages as well as other monetary income, such as bonuses, allowances and subsidies. The arbitration committee ruled that the company should compensate the remaining 3600 RMB to the worker.


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