[Case Scenario]

Mr. Huang and Ms. Zhao got married in July of 2015. After that Mr. Huang established an import & export company (“the Company”) to build some career. Ms. Zhao invested 200 thousand RMB as starting fund to support Huang. Huang then became the sole shareholder and legal representative of the company and was in charge of company’s major business. Zhao, as a qualified accountant, was responsible for the cashier work of the company.

From May of 2017, the couple started breaking up. Huang did not let Zhao get in touch with the company’s affairs anymore since then. Being frustrated, Zhao filed a labor arbitration to request confirmation of the labor relationship with the Company and to claim the double salary compensation due to the missing labor contract in written form as well as the indemnity for the unwilling rescission of the labor contract.  

[Key Evidence]

Company: Marriage certificate (Huang and Zhao are married couple.)

Zhao: 

1- the authentic list of the paid social insurance record (the Company paid the social insurance for Zhao) ;

2- the list of the bank transactions (monthly from Huang’s personal account to Zhao’s personal account in regular term);

3- the daily work record as the cashier. 

[View of Court]

In this case, Zhao and Huang, the legal representative of the Company, had legal marriage relationship, and such relationship was founded before the establishment of the Company. During the set-up phase of the Company, Zhao participated the fund collection and managed the money transfers as a cashier for the Company later on. It is clear that Zhao and her husband shared the management and production work of the Company.

Despite of the social insurance record list and the bank transactions list, the intention of participating social insurance through a company should be considered, as Zhao had the favorable condition because of her identity. Moreover, Zhao was neither subject to the fixed working hours nor bounded by the attendance management. Hence, it is not a relationship of managing and being managed between the parties.

Furthermore, the nature of Zhao’s work is different from the common labor supply for wage. And there is no evidence proved that during her working period, the marriage status had no longer existed, and she had to earn this income for living and never or didn’t share the interest from the Company’s operation anymore. It can be concluded therefore, Zhao did not match the nature of the personell and finance management status of a labor relationship. The relationship between the parties was not labor relationship.