The situation: An employee of five years is suddenly told his contract is ending 'for restructuring,' with no notice, no documented reason and no procedure.
Applicable law: Termination must rest on a lawful ground (serious misconduct, incapacity after training, etc.). Ordinary severance for a lawful termination is one month's pay per year of service (N). An unlawful dismissal owes double that (2N), or the employee may demand reinstatement.
Outcome: The employee filed for arbitration, and because the company could prove no lawful ground, he was awarded 2N compensation equal to ten months' salary.
👷 Labour disputes · Awareness case
Wrongful Dismissal Equals 2N Compensation · Yalla China
🤝 Governing law: 劳动合同法 / Labor Contract Law
If you're fired with no lawful reason, how much is your compensation worth?
Illustrative, general educational examples — not real specific facts and not legal advice; for awareness only. For an actual situation, consult a licensed lawyer.
🎓 The lesson / takeaway
Lesson: Dismissal has a calculated price. Know the difference between N and 2N, and never sign a 'voluntary' resignation that erases your right to double compensation.
🕒 Updated: 16 March 2026