Why do some employers sign contracts with their employees once a year?

The purpose of the employer signing a contract with its employees once a year is to avoid the short-term termination of the labor contract with the employee if the contract expires, and does not want to compensate the employee financially. However, according to the "Labor Contract Law" ”, if workers are familiar with the relevant legal provisions, they will eventually shoot themselves in the foot and lose more than they gain. So let’s take a look at how the labor law stipulates.

There are generally three types of labor contracts of different durations

There are three types of labor contract periods between employers and workers: labor contracts are divided into fixed-term labor contracts, unfixed Term labor contracts and labor contracts that are limited to the completion of certain work tasks. Usually, a fixed-term labor contract is signed. This fixed period can be divided into one year, three years or five years. It is determined by the enterprise according to the nature of the job and the position, that is, the labor contract is one year, three years or five years. One sign. You can choose to cancel or renew each time the contract expires.

In the following situations, workers may request to sign a labor contract with an indefinite period with the employer.

However, the employer must be reminded that in Article 14 of the Labor Contract Law: Article 1 stipulates that under the following circumstances, the employer shall sign a labor contract with an indefinite term with the employee, that is, a labor contract with no termination period (unless the employee agrees to sign a fixed-term contract).

(1) The employee has worked continuously in the employer for ten years; The employee has worked continuously for ten years in the employer and is less than ten years away from the legal retirement age;

(3) The employee has entered into two fixed-term labor contracts in succession, and the employee does not have the qualifications specified in Article 39 of this Law. In the circumstances specified in Article 1 and Article 40, paragraphs 1 and 2, the labor contract shall be renewed. (The employee is proven not to meet the employment conditions during the probation period; the employee is sick or injured not due to work, and cannot engage in the original job after the prescribed medical period expires, nor can he engage in other work arranged by the employer;)

Signing a short-term one-year labor contract seems to be beneficial to the company, but after signing it twice, it needs to be changed to an indefinite-term labor contract

According to the above legal provisions, signing for two consecutive years If a second labor contract is signed, unless the employee personally requests and agrees, the employer will need to renew the labor contract with an indefinite term starting from the third year. Signing a non-fixed-term labor contract means that unless the employer goes bankrupt and generally reduces its business and lays off workers, priority should be given to retaining workers with non-fixed-term contracts. If the employer forcibly terminates workers with non-fixed-term contracts, they will be Illegal compensation to workers is up to 2N times their wages.

To put it bluntly, the employer is violating the law in broad daylight. Even if the contract is signed once a year, the employer must sign an "indefinite-term contract" directly when signing the [third] contract with you.

What comes into effect from this is that when an employer terminates the labor relationship with an employee who has signed an [unfixed-term contract], it is required to pay financial compensation. This compensation means that if you work for a full year, you can be compensated with one month's salary, and after a few years, you will be compensated with a few months' salary.

For example, if you have worked for 10 years and signed an open-term contract with a monthly salary of 8,000, as long as the employer terminates the labor relationship with you, it must compensate you [10 years multiplied by 8,000] = 80,000.

If it is a "one-year contract" situation and the employer does not renew your contract, how much does it need to compensate you? It only needs to compensate you 10% of your annual income, which is 9,600 yuan.

But as I said just now, this is an employer breaking the law in broad daylight. You have already signed a contract with him for the third time, and he still only signs with you for one year. Even if you work for 10 years, the final compensation you will receive is only 9,600 yuan, not the 80,000 yuan you deserve.

That’s probably what it means.

Are there still few units that violate the law in broad daylight? There are too many.

For example, if a labor dispatch company signs 4 or 5 contracts with you, they are all fixed-term contracts, that is, they will not give you an indefinite-term contract. He circumvented the law in broad daylight, in fact, to avoid paying you the financial compensation you deserve.

But I want to say that even according to the standard of a fixed-term contract, the labor dispatch company will not pay you any financial compensation if it does not renew the contract with you. Why?

Because labor dispatch companies have always been such a dark and evil existence that is above the laws of our country, and their despicable behavior is like that of the underworld. I haven't heard of anyone taking charge of it. To put it bluntly, if a labor dispatch company does such evil, it will definitely be punished by God one day.

If you reach your third year of work and your company still signs you on a yearly basis, don’t think about anything else and resign as soon as possible.

The company signs a contract with its employees once a year, basically for the following two considerations:

First, it gives employees a sense of crisis.

We have found that many employees who have signed an open-ended labor contract have a mentality: they believe that they have an open-ended labor contract with the company, and the company has to support them until retirement, and cannot terminate it midway. Therefore, as time went by, my work attitude became negative and I just muddle along in the company.

The company chooses to sign once a year, which can eliminate this mentality of employees to a certain extent.

2. The company will have more initiative in dissolution in the future.

In the same way, the contract has a time limit. When it expires, if the company no longer wants to use the employee, it can directly terminate the relationship without going through the troublesome process of negotiation or incompetence. .

The above two considerations are actually caused by certain misunderstandings between the employer and employee about the "unfixed-term labor contract", that is, the indefinite-term labor contract cannot be terminated.

First of all, according to the provisions of the Labor Contract Law, after an employee signs a fixed-term labor contract twice in a row, he should sign an indefinite labor contract for the third time. Even if the company does not sign it, it will continue to choose to sign a fixed-term labor contract. , after the contract expires, the company still cannot terminate the labor contract, otherwise it will have to bear compensation for illegal termination.

Secondly, the non-fixed-term labor contract is not irrevocable. Except for the different contract period, the legal basis and rules for termination are exactly the same as the fixed-term labor contract. The employee has violated discipline and is incompetent for the job. If you are unable to work after the medical period expires, it can be terminated, and there will be no increase in compensation because it is an open-term labor contract.

Why does the employer sign a labor contract with its employees once a year? It is convenient to terminate the labor relationship at any time. According to the labor law, workers who have been fired by the employer for one year of work can receive one month's salary as compensation. The second year of renewal is for employees recruited in the new year, and the previous working years will not be counted.

I only answer this question from a legal perspective, but most people still miss the point.

There is only one essential difference between a fixed-term labor contract and an unfixed-term labor contract. In the former, the employer has a right to terminate the contract when it expires.

Having the right to terminate does not mean that the termination is legal. Taking Beijing as an example, if two consecutive fixed-term labor contracts are signed and expire, if the employer terminates the labor relationship, and the employee claims illegal dismissal, he or she may receive support, which is 2N.

However, for labor contracts with no fixed term, workers also have another appeal, which is to continue to perform the labor relationship. The benefits may be much greater. I have personally handled cases in Chaoyang District, Beijing in the past five years. Case analysis:

If the judgment takes effect and the labor relationship is restored, the employee can claim for wage losses from the date of illegal dismissal to the date of restoration of the labor relationship, which is generally paid in full. A real case of a client of a law firm. The contract was for three years. He was fired just after the probation period was completed three months after joining the company. The monthly salary was 25,000. The employee asked to continue to perform the contract. The lawsuit lasted for more than three years, and the arbitration went through three rounds of first instance and second instance. , the last fight was for compensation, and the final judgment amount was more than 550,000. I haven’t worked a day in the past three years, and I am still rich even though my salary is fully supported.

If the labor contract has expired, you cannot request continued performance of the contract; the labor contract period is very close, and even if you request to restore the labor relationship, the labor contract will expire during the litigation.

This is the legal risk that the employer can truly avoid by signing a labor contract every year. In other respects, there is no difference if both parties have sufficient ability to protect their rights.

To add a final answer to the question, some people may ask, the law stipulates that the third labor contract signed between the employer and the employee should be signed with an unlimited term. Can the labor contract that has been signed with a fixed term be allowed? Considered as indefinite? The answer is very clear. From a legal perspective, the employer and the employee have reached an agreement on signing a fixed-term labor contract.

As for considerations in management or other disciplines, leave them to other respondents.

Employers always sign labor contracts for one year. Why?

Thank you Wukong for the invitation!

However, companies always sign one-year contracts for their employees and renew them after expiration. The company's approach does not seem to violate the requirements of the labor law, but it does bring uncertainty to workers.

Why does the company only offer contracts to those who sign a one-year contract first? This is where the unit leaves a space in order to control the employment mechanism. That is to say, when the one-year contract period is reached at the end of the year, it depends on the operation of the company. If everything goes well and the profits are okay, then Continue to renew the contract, and if there is a problem with the business situation, you can lay off employees after expiration. This is a method currently used by some small businesses in society. It does not violate labor laws, but is also reasonable and reasonable.

However, in our Rugao area, the same situation also occurs. The company recruits employees, but in order to implement the labor law, it only signs labor contracts for one year, and after one After the expiration date, see how your work is going. Based on the actual situation of the company, if the output value increases, renew the contract. Of course, the company is also facing bankruptcy. As for such a company, it will be on the verge of labor law. The method is also unconventional.

However, regarding the requirements of the labor law, although signing a one-year contract does not violate the labor law, that is, the labor law also stipulates that the employer can only renew the labor contract twice, and the third year That is, a fixed-term employment contract needs to be signed, which means that the employer can only sign a two-year contract and then complete it in two installments. So employees should pay attention to the implications of the labor law and the employer’s methods? Personal opinion, for reference only!

It is legal for the employer to choose a one-year labor contract and should be respected. The conclusion of a short-term labor contract between the employee and the employer can increase mutual understanding and choice. After concluding a second labor contract in a row, it should be Enter into an unlimited-term labor contract. In this way, both the employer and the workers have stability.

There is no legal problem with signing once a year. The reason why the state gives companies enough space to establish contract periods is to respect the business operations of the company and allow companies to determine different contracts based on specific circumstances. There are several possible reasons for this:

Need for flexible employment

Nowadays, society is changing rapidly and employment is more diversified. For example, some dispatch companies will sign short-term contracts. If customer needs change, they will Involving some people terminating the contract, short-term contracts have lower breach costs.

Reasons for business development

Some businesses have a very short development cycle and may disappear or change within a few months. If the business changes, it is easier to make contract changes and the compensation is less. Is it Renewal, easy entry and exit.

Particularity of the position

For positions that are highly replaceable and have a high turnover rate, they usually do not require a long contract period and can be flexibly replaced or renewed depending on the situation. contract.

The reason for the project system

The project cycle can be clearly understood, and the team will be disbanded after the project is completed. This is more common in engineering construction, real estate development, IT development, etc.

One-year signings are more common in small and medium-sized enterprises, because whether the company can survive and how long it will survive is unknown. What if the signing is for that long, what if the people are no longer needed, the contract expires There is no explanation.

Large companies are relatively stable and usually choose the 3 6.5 method. The first contract is for 3 years, and the second contract is renewed for 6.5 years. If it can be signed for the third time, the labor contract will be executed without a fixed period. , to avoid the cost of a fixed-term contract if you don’t work for too long.

The choice of contract period is based on the operation and cannot be one-size-fits-all. It must be adapted to local conditions and used flexibly as a management tool.

I actually asked my company HR about this matter. This is what he replied to me:

The company signs a contract once a year, which can prevent employees from thinking that they will have an iron rice bowl after becoming a regular employee, and have no sense of crisis and are not motivated to work. If an employee performs poorly during the year, there is a good chance that the contract will not be renewed. What’s more, the market is constantly changing, and companies don’t know when problems will arise in their operations. Signing a contract once a year can leave some leeway when the company plans to lay off employees to combat risks. Of course, the company's technical masters still sign every three or five years.

I also asked you if it was related to compensation, and you replied that there are social security records there, and they are indispensable.

Employers and employees sign a contract once a year, and can only sign it twice at most, because according to the labor law, an unfixed contract must be signed starting from the third time.

In addition, even if the employer signs a contract once a year, it actually has no meaning and will only increase the workload. Even if the contract expires and the employer does not want to renew the contract with you, it still needs to pay financial compensation, and the calculation standard for financial compensation is based on your working years with the company, not the length of the contract. But if you sign a contract once a year, you can fool people who don't understand much about things like financial compensation. After all, if we ourselves had resigned due to the expiration of the contract, we had never asked the company to pay financial compensation. On the one hand, I don’t understand the law well, and on the other hand, I feel embarrassed. Is it easy to get together or to part ways?

Therefore, it is wise to keep your annual labor contract or evidence of your employment in the company.