A difficult situation has emerged at a Xi'an hotel after a judicial auction transferred ownership to a new entity, forcing all staff to resign. Currently, only 30 employees have received compensation from the original owner and left after their contracts were terminated, while nearly 100 long-serving employees have had their years of service reset to zero, signing new labor agreements with the new owner that include a six-month probation period. Another 30 employees have been forcibly removed from their posts, leaving them without work or income. Recently, multiple former employees of the former Xi'an R&F Hilton Hotel raised concerns with reporters about these circumstances.

On September 1, reporters visited the hotel on Dongxin Street in Xi'an's Xincheng District and observed that its name has been changed to Xi'an City Wall Hilton Hotel. Around twenty or thirty people were gathered in the lobby. This hotel, which opened in 2011, was the first Hilton property in northwest China, originally owned by Wanda and named Xi'an Wanda Hilton Hotel. In 2017, R&F took over and renamed it Xi'an R&F Hilton Hotel. In May of this year, the hotel was sold at a judicial auction, with Yantai Shuhang Business Services Co., Ltd. (referred to as Yantai Shuhang) winning the bid for 330 million yuan. By August, the name had been changed to Xi'an City Wall Hilton Hotel.

The hotel employs approximately 160 people, with Hilton serving as the brand operator. The actual property owner and operator is the original owner, Xi'an Fudun Hotel Management Co., Ltd.'s R&F Hotel Branch (referred to as R&F Company), which holds all employee labor contracts. After the auction, a tripartite Labor Contract Amendment Agreement involving R&F Company, Yantai Shuhang, and the employees was proposed to facilitate a smooth personnel transition, but it was never implemented. On August 14 and 18, R&F Company posted two "Employee Notification of Negotiated Labor Contract Termination." The first notice stated that, due to the change in property ownership, the original labor contracts could no longer be fulfilled, and proposed a plan for negotiated termination with all employees. The second notice explained that from August 1, 2026, the hotel would operate under the new owner's name, and although some employees had signed the tripartite agreement, Yantai Shuhang had not completed its stamping procedures, rendering the agreement invalid. Yantai Shuhang had also stated in writing that employee placement and contract termination were R&F Company's responsibility. The notice further indicated that since August 1, employees had actually been providing labor to the new owner and following its management, establishing a de facto employment relationship. Therefore, wages, social insurance, and benefits from August 1 onward should be borne by the new owner, and the company had decided to propose negotiated contract terminations again.

After the notices were posted, 22 employees signed the Agreement on Consensus Termination of Labor Contract. Earlier, when the tripartite agreement was first proposed, 10 employees had refused, and 8 of them left in early August with compensation. In total, only 30 people have so far received severance from R&F Company. On August 27, Yantai Shuhang issued a notice for signing written labor contracts, with nearly 100 people signing new agreements with the new owner, granting authorization to lawyers to apply for labor arbitration against R&F Company for compensation, and signing commitments affirming that their employment with the original employer had ended and that their prior tenure would not be counted continuously with Yantai Shuhang. On September 1, the people gathered in the hotel lobby were mainly those who had neither terminated their contracts with R&F nor signed new ones with Yantai Shuhang. Most of these employees had open-ended contracts with R&F, including a pregnant worker, two female employees nearing retirement, one of whom is just two months from retiring and concerned about her pension, another with over two years left and worried about her medical insurance being suspended, and two disabled employees anxious about future job prospects, one of whom supports a seriously ill wife on his salary alone.

The hotel typically pays wages on the 20th of each month. R&F Company has already paid wages for June 21 to July 20 to all employees, and per the termination notice, wages for July 21-31 should also come from R&F. Starting August 1, Yantai Shuhang should handle all payroll. On August 27, when new contracts were signed, Yantai Shuhang paid wages for August 1-20 in cash to those who signed, but those who didn't sign were not paid and were soon told to leave their posts. When reporters and employees sought answers from two HR representatives sent by Yantai Shuhang, they were told that the manager in charge, surnamed Gao, would not return to Xi'an until after 9 PM, and interviews could only happen the next morning.

On September 2, a senior executive from Yantai Shuhang, surnamed Gao, along with a PR staff member, met with employee representatives and reporters. Gao explained that R&F Group had purchased 77 hotels from Wanda for 19.9 billion yuan, but later defaulted on debts, and banks auctioned the mortgaged hotels. Yantai Shuhang bought these non-performing assets from the bank, not from R&F, winning the bid on May 18. However, the handover wasn't completed until August 1, with support from municipal and district governments. Gao noted that all employees held contracts with R&F, which unilaterally terminated agreements without proper notice, requiring N+1 compensation under national law. But R&F neither paid the compensation nor completed the formal termination. He stated that attempts to engage R&F since May were ignored, with only a lawyer showing up, claiming frozen accounts prevented payments. The account freeze resulted from debts R&F owed Yantai Shuhang, as R&F didn't transfer movable assets in the auction and occupied the property without paying rent. Although an agreement was reached during government-mediated handover talks, R&F didn't honor it, leading to litigation. Gao said, "We only received the building. If R&F won't terminate contracts, we can still pay wages, but what about labor contracts and social insurance? We need R&F to step up, pay compensation, and not evade responsibility." Employees at the meeting echoed a desire for direct talks with R&F.

Employees revealed that after R&F's August 14 notice, many signed agreements expecting compensation, but some tore up their signed documents after hearing Gao's remarks. He had cautioned that R&F's compensation calculations were flawed: instead of using the average annual salary divided by 12 times years of service, they used contract wages, and they offered N instead of N+1 without the required advance notice. He advised caution, while noting that pregnant employees couldn't be lawfully terminated, and those continuing to work had only temporary arrangements that shouldn't affect compensation claims. Meanwhile, R&F's August 18 notice claimed the tripartite agreement failed due to Yantai Shuhang not completing stamping procedures. Gao disputed this, saying R&F had refused to transfer labor contracts and instead wanted to find a third party for another auction. He expressed hope that R&F would promptly compensate employees and resolve special cases.

Reporters and employees then visited the Xincheng District labor inspection department on Shangqin Road. Staff suggested applying for labor arbitration at the Xincheng District Employment Service and Labor Arbitration Center and noted that the labor inspection department handles contract disputes, focusing on the company. They indicated that those without new contracts should seek work, as R&F had effectively terminated employment. As for the 10 days of unpaid wages, staff said employees could file complaints with ID cards. They clarified that seniority isn't lost when changing employers, as social insurance maintains continuous tenure. Regarding the six-month probation period in new contracts, they explained that with a change in contract subject, such terms are a matter of mutual choice, though acceptance depends on whether roles and pay change. They also stated that as of July 31, the employment relationship with R&F had effectively ended, and those not formally terminated could seek arbitration to enforce contract terms; if not assigned work or notified, employees could rest at home while wages continue, since the company must handle termination and compensation, including transferring social insurance within 15 days. Special protections exist for pregnant workers, long-serving employees near retirement, and others, during which termination isn't permitted without cause or for restructuring. The staff believed the core issue was a disconnect between the two owners, focusing on whether new contracts were signed and who pays August wages onward; they confirmed Yantai Shuhang would pay wages from August 1 regardless of contract signing, including for pregnant employees who can't be terminated.

Regarding R&F's stance, reporters contacted executive Ms. Zhu on September 2, who said a lawyer had been delegated to engage with employees. The lawyer, Mr. Ke, stated that compensation had been calculated and a dedicated team would soon be on-site to address matters, emphasizing that R&F wouldn't abandon employees, with a solution expected shortly. The hotel manager, Mr. Wang, listed as the legal representative on the business license, said he wasn't directly involved, as he was also a displaced employee on re-employment after retirement, still working with no replacement yet.

By September 3-4, progress emerged: R&F paid wages for July 21-31 directly to bank accounts, and Yantai Shuhang paid cash for August 1-30 to those without new contracts. The labor inspection department also investigated complaints from 22 departed employees about unpaid August wages. Additionally, R&F's lawyer discussed compensation with the 30 employees who neither terminated contracts nor signed new ones, with a dedicated team expected on September 9. One employee confirmed that August pension and medical insurance were paid by R&F, with housing provident fund contributions made on August 28.

Legal experts suggest that in similar situations, employees should first assess whether the company faces bankruptcy. If insolvent, workers can apply to the court for bankruptcy proceedings, where asset evaluation leads to a plan prioritizing taxes, then employee wages and compensation, followed by secured and mortgage creditors, with ordinary creditors last. If assets are sold and the company remains solvent, employees can negotiate contract termination or seek labor arbitration if negotiations fail. Under the Labor Law, employers can terminate contracts with 30 days' written notice and provide economic compensation per national regulations; failure to do so can trigger labor administrative orders for wage and compensation payment plus fines. Protections bar termination during pregnancy, maternity, or nursing periods. Under the Labor Contract Law, probation periods can only be agreed once per employment relationship, and changes in company name, legal representative, or ownership don't affect contract performance. In mergers or splits, original contracts remain valid with the successor entity. Termination requires mutual agreement or, when major objective changes make performance impossible and negotiations fail, 30 days' notice or one month's pay in lieu, with economic compensation.

Lawyer Jia Tao from Shaanxi Yanfeng Law Firm highlighted these legal principles. He urged employees facing asset transfers, equity changes, or acquisitions to first consider bankruptcy risks, and if the company is truly insolvent, they can apply for bankruptcy to trigger asset and debt audits. This leads to a bankruptcy plan addressing employee settlements, with tax and unpaid wages taking precedence over secured claims. If the company remains viable, negotiation or arbitration are viable paths forward.

As of now, the situation remains unresolved for many, but supervisory authorities and both owners are engaged in ongoing efforts to address the disputes.