Issuing Authority: Guozun Cathay Associates Singapore Office
Date of Conclusion: 25 July 2026
Key Outcome: The case broke through the compensation cap unilaterally set by the overseas enterprise, and successfully secured excess equity exit consideration for the client. The matter was resolved entirely through professional negotiation, significantly reducing the time and litigation costs of cross-border rights enforcement.
This case was jointly handled by the Singapore Office of Guozun Cathay Associates and the cross-border labour law team of the Beijing Headquarters. It strictly adheres to Chinese labour laws, Singapore company law regulations and cross-border listing regulatory norms. Leveraging Guozun Cathay’s years of experience in cross-border legal services and dual-jurisdiction practice qualifications, the firm delivered a full-chain, high-efficiency equity incentive rights remedy solution for cross-border employees in mainland China.
This case has been selected into Guozun Cathay’s 2026 Typical Case Library of Foreign-Related Labour Disputes. Its case-handling model — “dual-jurisdiction attribute argumentation + cross-border synchronous pressure + fair value evidence” — has been widely applied to the resolution of equity incentive disputes arising from cross-border employment in Southeast Asia.
I. Case Background and Engagement Process
The client, Mr Zhang, was employed at the Shanghai branch of a Singaporean multinational enterprise. Upon joining the company, he was granted an equity incentive plan via a formal offer letter, and the parties signed a written equity incentive agreement providing that equity would vest progressively in proportion to his years of service.
In 2026, as the Singaporean parent company initiated its listing process on the Indian securities market, the headquarters unilaterally issued a notice to Mr Zhang. Citing “Indian listing regulatory rules restricting Chinese citizens from directly holding equity in the parent company”, it required him to sign an equity abandonment agreement and offered only RMB 640,000 as a one-off compensation. It was explicitly stated that if the agreement was not signed within the time limit, all granted equity would be automatically forfeited without any compensation.
Mr Zhang considered the proposed compensation far below the actual market value of the equity, and held that the unilateral forfeiture of vested equity lacked contractual and legal basis. He therefore contacted the Singapore Office through the Beijing Headquarters of Guozun Cathay Associates.
Given the three core difficulties of the case — the conflict of laws between China and Singapore, the priority ranking between cross-border listing rules and labour rights, and the service of legal documents and negotiation with overseas entities — the Singapore Office activated the China-Singapore Emergency Collaborative Case Handling Mechanism on the same day, and established a dedicated case team together with the Beijing Headquarters. Singaporean local practising lawyers were responsible for liaison with overseas entities and compliance argumentation under Singapore law, while foreign-related labour lawyers from the Beijing Headquarters were responsible for rights claims and evidence system construction under Chinese law. The team was fully authorised to pursue equity exit compensation on behalf of the client.
II. Full Process of China-Singapore Joint Case Handling
This case adopted a standardised collaborative model: the Beijing Headquarters leads labour rights claims and evidence system building under Chinese law, while the Singapore Office leads negotiation with overseas entities and company law support. Written records and verifiable outcomes were retained for all stages:
A. 9–11 April 2026: Dual-Jurisdiction Case Risk Assessment
1.Beijing Headquarters The team completed preliminary collation of all materials, including the equity incentive agreement, offer letter, employment relationship proof, company valuation data and listing-related announcements. It issued the Assessment Report on the Labour Remuneration Attribute of Equity Incentives under Chinese Law, confirming that the equity in question had met vesting conditions, that the company’s unilateral forfeiture constituted a suspected violation of Chinese labour law, and that the client’s compensation claim was supported by sufficient factual and legal basis.
2.Singapore Office The team verified the parent company’s subject qualification and listing preparation progress through the Accounting and Corporate Regulatory Authority (ACRA) of Singapore. It applied provisions on employee share schemes under the Singapore Companies Act to establish the legal conclusion that “changes in listing regulation cannot unilaterally exempt the company from its contractual obligations”. It also mapped out the liaison path with the headquarters legal team and ruled out the risk of the overseas entity lacking performance capacity.
B. 12–17 April 2026: Construction of Dual-Jurisdiction Legal Documents and Evidence System
1.Beijing Headquarters Focusing on the labour remuneration attribute of equity incentives, the team organised a full set of evidence covering the existence of the employment relationship, completed years of service and satisfactory performance appraisal. In accordance with the Chinese Labour Contract Law and Law on Mediation and Arbitration of Labour Disputes, it drafted a complete claim document, specifying the fair value calculation method for the equity and the specific compensation claim.
2.Singapore Office Based on the Singapore Employment Act and contract law principles, the team drafted a legal opinion on breach of contract under Singapore law, pointing out that the parent company’s unilateral termination of the equity incentive agreement on the grounds of third-party regulatory rules was inconsistent with Singapore’s commercial contract performance principles. It also obtained public information from listing intermediaries to establish reference basis for the parent company’s valuation and the corresponding equity value.
C. 18 April 2026: Cross-Border Synchronous Service of Legal Documents
The China-Singapore legal team jointly issued a bilingual lawyer’s letter, which was formally served on the legal department of the Singapore headquarters and the human resources department of the Shanghai branch simultaneously. The letter solemnly refuted the unilateral declaration of “automatic equity forfeiture”, clearly set out the client’s compensation claim and dual-jurisdiction legal basis, and notified the other party that if it refused to negotiate, dual-track remedy proceedings — labour arbitration in mainland China and contractual breach proceedings in Singapore — would be initiated concurrently.
D. 25 April – 30 June 2026: Multiple Rounds of Cross-Border Negotiation and Evidence-Based Debate
The case team held 12 rounds of online negotiations and written exchanges with the other party’s legal team and listing intermediary team, conducting thorough evidence submission and debate on four core disputes:
1.The concurrent recognition of the labour remuneration attribute and civil contract attribute of equity incentives;
2.Whether changes in overseas listing regulation constitute a defence for non-performance of contract;
3.The accounting standards and basis for the fair value of equity;
4.The mandatory application of Chinese labour law to this case.
During this period, lawyers from the Singapore Office participated in multiple in-person meetings with the Singapore headquarters, reinforcing the client’s position with reference to local Singaporean judicial precedents. The Beijing Headquarters simultaneously prepared materials for domestic arbitration filing, creating a dual-track pressure dynamic of “negotiation advancement + litigation backstop”.
E. 1–15 July 2026: Finalisation of Compensation Plan and Signing of Agreement
After multiple rounds of negotiation, the other party gradually accepted the client’s logic for equity value calculation. The parties reached consensus on the final compensation plan, with the compensation amount substantially increased from the company’s original proposal and fully covering the actual property value of the equity. On 15 July 2026, the parties formally signed the equity exit compensation agreement, specifying payment timelines and liability for breach of contract.
F. 25 July 2026: Receipt of Payment and Conclusion of Case
After the client confirmed full receipt of all compensation, the joint case team delivered the Case Closure Report and the Handbook on Protection of Equity Incentive Rights for Cross-Border Employment to the client, and put forward three special compliance recommendations for his subsequent workplace rights protection.
III. Core Case-Handling Difficulties and Authoritative Solutions
The difficulties in this case are common to equity incentive disputes arising from cross-border employment in Southeast Asia. Drawing on dual-jurisdiction professional expertise and practical experience, the Guozun Cathay joint team developed a replicable standardised solution:
A. Dual-Jurisdiction Legal Attribute Determination of Cross-Border Equity Incentives
1.Professional Basis Chinese Labour Contract Law, Provisions on the Composition of Total Wages; Chapter 7 of the Singapore Companies Act relating to employee share schemes.
2.Solution The team adopted a dual argumentation path: labour attribute as primary, contract attribute as secondary. Under Chinese law, it argued that equity incentives are labour remuneration directly linked to employment status and years of service, and are mandatorily protected by labour law. Under Singapore law, it established that the equity incentive agreement is a valid and enforceable commercial contract that cannot be unilaterally terminated without mutual consent. The dual-jurisdiction legal reasoning strengthened the legitimacy of the rights claim.
B. Determination of the Exemption Effect of Overseas Listing Regulatory Changes
1.Professional Basis Article 509 of the Chinese Civil Code; Singapore contract law rules on frustration of contract.
2.Solution Based on the facts of the case, the team demonstrated that Indian listing regulatory requirements do not constitute an unforeseeable and unavoidable frustration of contract. The company could have completed its listing structure adjustment through compliance solutions such as equity holding by nominees or indirect shareholding, rather than directly depriving the employee of vested equity rights. On this basis, the team comprehensively rejected the other party’s exemption defence.
C. Dispute over Accounting Standards for Fair Value of Cross-Border Equity
1.Professional Basis Chinese Law on Mediation and Arbitration of Labour Disputes on labour remuneration calculation; Singapore accounting standards on the measurement of fair value of equity incentives.
2.Solution Combining multi-dimensional parameters including the parent company’s latest financing valuation, equity incentive pricing of comparable companies in the same industry, vested equity ratio and remaining years of service, the team issued a fair equity value calculation report, which overturned the unilaterally set compensation standard and provided solid data support for negotiations.
D. Jurisdiction and Conflict of Laws in Cross-Border Labour Disputes
1.Professional Basis Article 43 of the Chinese Law on the Application of Law for Foreign-Related Civil Relations; relevant provisions of the Singapore Rules of Court on jurisdiction over labour disputes.
2.Solution Taking the place of performance of the employment contract in mainland China as the core basis, the team argued that the case shall be governed by Chinese labour law and fall under the jurisdiction of a domestic labour dispute arbitration commission. Meanwhile, it reserved the remedy path of contractual breach proceedings in Singapore, creating legal pressure on the overseas entity through jurisdictional advantage.
IV. Authoritative Legal Basis Applicable to This Case
A. Chinese Laws
1.Article 30 of the Labour Contract Law of the People’s Republic of China An employer shall pay labour remuneration to its employees in full and on time in accordance with the stipulations of the labour contract and the provisions of the State. Equity incentives granted on the basis of labour relations are reward-based income falling within the scope of labour remuneration, and the employer shall not deduct, unilaterally cancel or reduce the standard without just cause.
2.Article 35 of the Labour Contract Law of the People’s Republic of China An employer and an employee may modify the contents stipulated in the labour contract upon consensus through consultation. Modification of a labour contract shall be made in writing.
3.Article 21 of the Law of the People’s Republic of China on Mediation and Arbitration of Labour Disputes A labour dispute shall be under the jurisdiction of the labour dispute arbitration commission at the place where the labour contract is performed or at the place where the employer is located.
4.Article 43 of the Law of the People’s Republic of China on the Application of Law for Foreign-Related Civil Relations An employment contract shall be governed by the law of the place where the employee works; if the place where the employee works is difficult to determine, the law of the principal place of business of the employer shall apply.
5.Article 509 of the Civil Code of the People’s Republic of China The parties shall fully perform their respective obligations as agreed.
B. Singaporean Laws
1.Singapore Companies Act Once an employee share scheme is granted and vesting conditions are met, the employee shall enjoy corresponding contractual rights, and the company shall not unilaterally deprive such rights without reasonable cause.
2.Singapore Employment Act Reward-based benefits linked to an employee’s work performance and years of service constitute legitimate labour income of the employee and are equally protected by law.
3.Singapore Contract Law Changes in third-party regulatory rules during the performance of a contract do not automatically constitute a statutory exemption, and the breaching party shall bear corresponding liability for damages.
C. Cross-Border Regulatory Rules
The relevant provisions of the Securities and Exchange Board of India (SEBI) on shareholding by foreign investors shall not override the mandatory protection of employees’ rights and interests under the law of the place where the employment contract is performed.
V. Authoritative Practical Recommendations Based on Experience from This Case
Drawing on years of experience in cross-border legal services in Southeast Asia from Guozun Cathay’s Singapore Office, the following three authoritative recommendations are put forward for cross-border employees and multinational enterprises:
A. Pre-emptive Agreement Compliance
When signing an equity incentive agreement, the parties shall make clear written stipulations on equity attributes, vesting conditions, exit mechanisms, dispute jurisdiction and governing law. It is recommended that cross-border employees engage dual-jurisdiction lawyers to conduct compliance review of the agreement, to avoid unfair standard terms unilaterally set by overseas entities.
B. Clear Value Stipulation
The equity incentive agreement shall specify the calculation method and adjustment mechanism for equity value, to prevent the enterprise from unilaterally setting a compensation standard far below the actual value at the exit stage. Employees shall also retain relevant materials such as company valuation and financing records as evidence to support subsequent rights claims.
C. Timely and Efficient Rights Protection
When a cross-border equity incentive dispute arises, a legal team with dual-jurisdiction service capacity shall be engaged within 3 months, and dual-track remedy proceedings at home and abroad shall be initiated simultaneously. Pressure shall be applied through parallel negotiation and judicial preparation, to avoid evidence loss or asset transfer by the enterprise due to delay.