April 15, 2015

Kevin Jones Talks Specifics Regarding Codes of Conduct in China in BioWorld Asia

Glaxosmithkline plc (GSK) confirmed that more than 100 employees left the company's Chinese office for violating the code of conduct. This followed a record-breaking fine imposed on GSK that resulted from the Chinese government's investigation which found that the company engaged in corrupt sales practices. While the company said 100 employees are leaving, they have not used the terms "fired" or "terminated."

Kevin Jones, partner and leader of Faegre Baker Daniels' labor and employment practice in China, explained the nuances of Chinese employment law when it comes to termination in a March 2015 issue of Bioworld Asia. Jones said that companies must have their disciplinary actions spelled out very specifically in the code of conduct, and that violations are not considered proven without exhaustive evidence. "If [GSK's] employee handbook states, 'if you violate, you can be subject to discipline action up to and including termination' that is not good," Jones said. "In the China context, you have to be very specific, and say, 'If you have paid a bribe you will be terminated.'"

In China, it is common for companies to end up having to pay would-be-terminated employees to leave. "If they don't have clear evidence, it would mean they would have to mutually terminate," Jones said. "This would mean they would have to pay the employee some money to go away, which they are probably not happy to do if they have engaged in wrongdoing."

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