Firing an Employee for Kickbacks

KickbacksRecently I received a phone call from a friend asking how he could fire his office manager who, he discovered, was asking (and probably taking) bribes from the company’s suppliers. The full story goes as follows.

My friend is the general manager of a foreign-invested company in China. Thanks to the expansion of the company’s business, his company was relocating to a bigger office. Several service suppliers were involved in the renovation works of the new office. The problem was that, very strangely, the renovation works were progressing very slowly. The general manager called the suppliers complaining about the delays. The suppliers told him that the company office manager was requesting bribes to allow them to enter the new office premises and conduct the renovation works.

Obviously the general manager in question now wants to fire the office manager, who was hired just a couple of months ago.  He does not want, however, to make (costly) mistakes when handling this matter. Because of that he rightly thought that a call to a lawyer could be helpful.

In this case, the company has statutory grounds to immediately terminate the office manager’s employment. The termination grounds are, for instance:

  1. unacceptable personal conduct that amounts to willful misconduct or gross negligence;
  2. fraudulent, dishonest or other improper conduct  that have the potential to cause serious harm to the company’s business or reputation;
  3. a serious violation of the employee handbook or any other company policy or procedure and/or a serious violation of laws, rules or regulations. (From this you can see why it is important to have in place employee handbooks or company written policies or procedures).

The problem is: what evidence does the company have to terminate the office manager on any of the above grounds? To put it bluntly, at this stage the company does not have any evidence. The general manager merely has some telephone conversations with the suppliers but he does not have any written statement from them nor any assurance that they will give their testimony against the office manager in the labor arbitration case or in court.

My advice to the general manager was to try to get written statements (a sort of affidavit) from the suppliers that the office manager was asking bribes from them as a condition of letting them progress with the renovation works. It would also be better if the suppliers’ statements include their willingness to testify in the arbitration or court proceedings. Then the client could confront the employee, showing the evidence that he has obtained (still not very strong evidence but better than nothing) and ask the employee to sign a resignation letter in exchange for the company’s not pursuing civil and criminal proceedings against him.

If this plan does not work, there is also a plan B, which is for the company to negotiate a termination of the office manager’s employment, undertaking to pay a severance payment according to the law. As this office manager has worked for the company for less than one year, the amount of the severance payment would probably be acceptable for the company.

These were my suggestions to my friend on how to deal with the situation. However, as the Chinese may say: “说起来容易做起来却很难”, “easy to say, hard to do”.


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