A female micro-loan client manager, who spent 12 years at a municipal bank under an open-ended employment contract, has lost her legal battle for 29万元 in compensation after being dismissed for severe internal control violations. The case, which involved relatives' loans, guarantor misconduct, and repeated disciplinary actions, was ultimately rejected by the arbitration tribunal, the court of first instance, and the appellate court.

The recent civil judgment, publicly released by the First Intermediate People's Court of the city, reveals that a client manager surnamed Liao held the position of micro-loan client manager at the bank's Chengkou sub-branch for 12 years. In June 2023, a routine internal audit by the bank's headquarters uncovered a host of irregularities, including her handling of loans extended to relatives without complying with the mandatory recusal policy. Additionally, she repeatedly provided guarantees and counter-guarantees for relatives' loans and private lending arrangements.

What was even more striking was the timeline of the internal response. Six months after the audit findings, the Chengkou sub-branch issued a disciplinary document in December 2023, critiquing and fining Liao 600 yuan. The document notably stated that "the sub-branch will not pursue further accountability," indicating that disciplinary follow-up was to be deferred to the bank's headquarters discipline inspection group. It was not until April 2024 that the headquarters claimed to have fully grasped the extent of Liao's violations, triggering a comprehensive investigation. Consequently, Liao was placed on standby status with her business operations suspended pending a full review of her portfolio.

In June 2024, further probes revealed that Liao had facilitated a loan renewal for a relative, who subsequently defaulted, rendering the loan unrecoverable. During this standby period, the sub-branch organized internal examinations on institutional rules, and Liao scored only 31.5 points out of a possible full mark. By early December 2024, the sub-branch issued multiple disciplinary decisions against her, including a formal warning for providing guarantees and counter-guarantees for relative-related loans, entrusted loans, and private borrowing. She also faced criticism and a deduction of 1,000 yuan in performance bonuses for failing to truthfully report personal guarantees, economic disputes, and litigation involvement, and another 500 yuan deduction for inadequate performance in loan collection duties.

A cumulative tally of her disciplinary record showed a staggering 36 violations during her employment, resulting in 16 separate punishments ranging from warnings to fines and public criticisms. In mid-December 2024, the bank formally delivered a "Notice of Termination of Employment Contract" to Liao. Unsurprisingly, Liao contested the dismissal, arguing that the bank had known about her violations since 2023 and, pursuant to the city's regulations on employee rights protection, had only one year to impose disciplinary action after becoming aware of them. She contended that the December 2024 termination exceeded the statutory limit. Furthermore, she asserted that the sub-branch's earlier document implying "no further accountability" effectively signified that the bank had waived its right to pursue disciplinary measures, and that placing her on standby while subsequently terminating her contract constituted double jeopardy for the same offense, violating the principle of proportionality.

Liao also challenged the termination on procedural and substantive grounds. She argued that Clause 22 of her employment contract was a standardized format clause that created new termination conditions beyond those set out in statutory law, thereby breaching mandatory legal provisions and rendering it invalid. She further pointed out that the termination notice merely cited legal provisions without specifying any concrete violations, and, referencing Supreme People's Court Guiding Case No. 180, asserted that the reasons for dismissal must be strictly limited to what is stated in the notice itself. She also claimed that the trade union's response was hasty and that the process was procedurally flawed, making the dismissal unlawful. Consequently, she pursued a claim for 29万元 in compensation for illegal termination.

Despite these arguments, both the first-instance and appellate courts dismissed her claims, siding with the employer at every stage of litigation. The courts underscored that the banking industry is a high-risk sector within which employees are held to elevated compliance standards. They reasoned that the notion of "significant damage" is not confined purely to direct financial losses; rather, the erosion of internal controls and the creation of compliance or legal risks constitute material harm in their own right. The courts clarified that the sub-branch's statement about "no further accountability" simply referred to the transfer of disciplinary authority to the headquarters' disciplinary body, not a wholesale pardon. Being placed on standby was considered a risk-control measure pending investigation, not the final disciplinary outcome. Finally, the courts verified that all the violations discovered during the investigation fell squarely within the legal provisions cited in the termination notice, rejecting the notion that any procedural rights had been violated.