A joined Company B in February 2014, and on April 26, 2019, Company B issued a notice of vacation to A, who did not return to work thereafter. On July 1, 2020, Party A terminated the labor contract with Company B. Afterwards, Company B entered bankruptcy liquidation proceedings, and Company A filed a dispute over the confirmation of employee bankruptcy claims due to objections to the calculation of economic compensation for terminating the labor contract based on vacation wages instead of normal working conditions wages. The case went through first instance, second instance, and retrial. Finally, the Supreme People's Court made a retrial ruling at the end of 2023, rejecting A's retrial application.

A claims that Article 47, Paragraph 3 of the Labor Contract Law of the People's Republic of China stipulates that "the monthly salary referred to in this article refers to the average salary of the employee for the twelve months prior to the termination or termination of the labor contract." The monthly salary referred to in this article should be understood as the average salary of the employee for the twelve months under normal working conditions before the termination or termination of the labor contract, excluding non normal working periods such as forced leave or medical treatment by the employer. Employers use the excuse of vacation to pay workers a minimum standard wage of twelve months, in order to reduce the base of economic compensation for workers, which is not in line with the original intention of legislation and constitutes a legitimate form of concealing illegal purposes. If the employer and the employee cannot reach an agreement on the termination of the labor contract through negotiation, the employer shall unilaterally make a decision to take a leave to the employee, and the adverse legal consequences of unilaterally notifying the employee of the leave shall be borne by the employer.

But the Supreme People's Court believes that the provision of Article 47 (3) of the Labor Contract Law of the People's Republic of China, which uses the average monthly wage of workers as the calculation base for economic compensation, is to link economic compensation with the contribution of workers. According to Mr. A, the "average salary for twelve months" should be the average salary for twelve months under normal working conditions of the employee before the termination or termination of the labor contract, excluding the salary during non normal working periods such as company holidays and medical periods, which lacks legal basis.

Previously, there was no clear provision on how to determine the economic compensation base if there were cases of workers taking sick leave, personal leave, absenteeism, or employers stopping work or production within the twelve months prior to the termination or termination of the labor contract, such as workers not being able to attend work normally and not receiving full wages. In judicial practice, there are also two different views on this matter. The viewpoint put forward by the Supreme People's Court in this case that "economic compensation is linked to the contribution of workers" clarifies that economic compensation should be calculated based on actual wages rather than normal attendance wages. This has important reference value for subsequent similar case judgments.