A South African client, Ross, reached out for help. He and his wife Janey were employed at a training center in Hangzhou and wished to resign. Despite their effectiveness as instructors, the center resisted their departure vehemently.

The employer demanded a 60-day notice as per the contract, unpaid work during this period, and hefty penalties for contract breach. Each earning 21,000 RMB, the couple faced potential fines of 40-50K RMB each, totaling a loss of nearly 180,000 RMB—a clear violation of the law, as companies can’t penalize employees for resigning.

Accepting such a financial hit was out of the question. I turned to my go-to tactic: leveraging unpaid social insurance premiums to resolve their predicament, waive the penalties, and secure a substantial severance package. This approach has been successful in my past cases, which you can explore here: “What If Company Penalizes You For Leaving.”

I instructed Ross and his wife to verify their social insurance contributions at the local bureau. In China, many employers are either unaware of this obligation or simply neglect it. Their investigation confirmed our suspicions, setting the stage for our next move.

My team drafted a statement for them to present to their employer, essentially stating: “Our social insurance hasn’t been paid; we’re resigning immediately.”

The boss contested, claiming they had consulted with local authorities. They were decidedly incorrect.

I counseled the couple to either ignore the boss or respond with “talk to my lawyer,” which only increased the employer’s frustration. The boss resorted to threats of deportation, blacklisting, fines, and lawsuits.

When the case went to arbitration, our arguments held firm. The training center’s legal team, realizing their weak position, proposed a settlement for 70% of our claim.

Ross, relieved to be free from any payments to the employer, accepted the deal. In the end, he and his wife not only received their contract cancellation but an additional 50,000 RMB in severance. Ross was so happy with our results that he wrote a testimonial on my Facebook page.

Settlement Agreement Issued By Arbitration Committee

Cancellation Letter