Research On Equity Incentive Mechanism From The Perspective Of Labor Law

On November 22,2016,the people’s Court of Qianhai cooperation zone,Shenzhen,Guangdong Province,adjudicated a case at the first instance,in which Wenjian,as a senior executive,filed a lawsuit against Boyan Shenzhen Co.,Ltd.,the employer,and Boyan Co.,Ltd.,for illegal termination of labor contract and repurchase of restricted stock.The court fully considered the purpose and character of restricted stock.And it was the first time in China that the dispute of restricted stock was brought lawfully into the category of labor dispute,which attracted widespread attention.In the early 1980 s,due to the needs of the stock system reform,equity incentive first appeared in the historical stage of China in the form of employee stock ownership,and then went through the spontaneous pilot exploration and the introduction of relevant policies in Shanghai,Beijing,Wuhan,Hangzhou and other regions.But the relevant legal norms of equity incentive were not settled until the CSRC passed the “Equity Incentive Measures for the Administration of Listed Companies” in 2016.At present,through the implementation of stock option,restricted stock,virtual stock,employee stock ownership and other equity incentive mechanisms,Chinese enterprises can effectively improve the treatment of workers,solve the management problems of enterprises,optimize corporate governance structure,and promote the reform and development of market economy.However,there are still few provisions on equity incentive in laws and regulations,especially in labor laws and regulations such as the labor law or the labor contract law.Then it comes the great differences in the judgment of equity incentive disputes in practice,which is not conducive to the orderly development of equity incentive.Therefore,it is necessary to put forward the solution of equity incentive disputes.It can be concluded from the induction of judicial documents that the current relevant judicial decisions have many problems such as various causes of action,low winning rate of workers,inconsistent judgment results and confusion between equity incentive disputes and traditional labor disputes.There are mainly four reasons for the phenomenon described above:first,equity incentive disputes involve various factors;second,the legal norms have not beenimproved;third,the relevant judicial principles has not been unified;then,the substantive review procedure is less applicable and the workers are faced with the failure of proof.From the perspective of labor law,the legal issues involved in equity incentive disputes can be sorted out.Firstly,equity incentive income is subordinate to the nature of wages,and the inclusion of equity incentive income into the scope of wages is in line with the trend of relevant legislation.Secondly,labor relationship is the basis of equity incentive relationship,while the equity incentive income belongs to the wage category,and the equity incentive contract is the supplement and extension of the labor contract,so the positioning of the equity incentive relationship is clear.Finally,the implementation of equity incentive may involve the infringement of labor rights and interests such as the right of free choice of employment and the right of labor remuneration,which should be paid enough attention in the setting of equity incentive terms.Therefore,to improve and perfect the way of dealing with the disputes of equity incentive mechanism in China,we can start from the angle of labor law.First of all,we should bring the equity incentive disputes into the labor dispute settlement,and apply a large number of equity incentive disputes accompanied by "delisting and dismissal" to the more timely and simple labor dispute arbitration procedure;secondly,we should update the provisions on wages and remuneration in the labor law,and include equity incentive income into it;thirdly,we should explain the basic judgment concept of equity incentive disputes,implement the "inclined protection principle" for equity incentive targets,and should not exclude executives.Finally,in the process of the trial,we should strengthen the protection of the labor rights and interests of equity incentive targets through substantive review.