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PRC Labour Law - Bitesize

3 October 2013
Mayer Brown JSM Newsletter

Work-related Injury (Cont'd)

If an employee breaches the employer's safety policies and is injured as a result, will his/her injury be treated as a work-related injury?

Yes, in this situation, the injury is still classified as a work-related injury, as long as it falls within any of the circumstances referred to in our Bitesize of 25 Sept 2013. PRC law provides the following exceptions to the identification of a work-related injury; if the employee's injury or death arises from his/her:

  • committing an intentional crime;
  • being drunk;
  • committing suicide or self-mutilation.

Can an employer take disciplinary action against an employee for breach of the safety policies which leads to his/her injury?

Yes. However, the employer is unlikely to be able to dismiss the employee as a disciplinary matter for his/her breach resulting in his/her injury, since the employee with the work-related injury receives special protection under PRC law from being dismissed during certain prescribed periods of time (see below).

Can an employer dismiss an employee who has suffered a work-related injury? If not, what particular entitlements does the employee have?

The employer's right to dismiss an employee in these circumstances depends on the seriousness of the employee's injury.

If the employee's injury is determined to be work-related by the local labour bureau, once the condition of the employee's injury is stable, the employer must apply to the Work Capability Assessment Committee subordinated to the local labour bureau to obtain certification that the employee is disabled and, if so, the degree to which he/she is disabled.

There are ten degrees of disability in respect of the employee's disability certification above. The employer's right to terminate the employee's employment is restricted depending upon the assessed degree of disability of the employee. Please refer to the table below for details.

DEGREE OF DISABILITY  TERMINATION RESTRICTIONS AND EMPLOYEE ENTITLEMENTS
Degree 1 to Degree 4

Where an employee's work-related disability is assessed at Degree 1 to Degree 4, the employee's employment cannot be terminated by the employer and the employee is no longer required to work. In addition, the employee is entitled to the following benefits:

  • A disability allowance paid from the work-related injury insurance funds according to the disability grade in a lump sum at the following rates:
    • Degree 1 – the employee's wages for 27 months
    • Degree 2 – the employee's wages for 25 months
    • Degree 3 – the employee's wages for 23 months
    • Degree 4 – the employee's wages for 21 months
  • A monthly disability subsidy paid from the work-related injury insurance funds at the following rates:
    • Degree 1 – 90% of the employee's monthly wage
    • Degree 2 – 85% of the employee's monthly wage
    • Degree 3 – 80% of the employee's monthly wage
    • Degree 4 – 75% of the employee's monthly wage

(Please see Note 1 below for definition of "employee’s monthly wage".)

Where the actual amount of the disability subsidy is lower than the local minimum wage standard, the difference will be paid from the work-related injury insurance funds.

  • The disability subsidy ceases after the employee reaches retirement age and has gone through retirement formalities. The employee is then entitled to basic pension benefits in accordance with the relevant national law. Where the basic pension benefits are lower than the disability subsidy, the difference shall be paid from the work-related injury insurance funds.

Where an employee's work-related disability is assessed at Degree 1 to Degree 4, the employer and the employee shall pay the basic medical care insurance premium based on the disability subsidy.

Degree 5 to Degree 6

Where an employee's work-related disability is assessed at Degree 5 to Degree 6, the employee is entitled to the following benefits:

  • A disability allowance paid from work-related injury insurance funds according to the disability grade in a lump sum at the following rates:
    • Degree 5 – the employee's wages for 18 months
    • Degree 6 – the employee's wages for 16 months
  • The employee's employment cannot be terminated by the employer and the employer shall arrange appropriate work for the employee. Where it is difficult to arrange any work for the employee, the employer shall pay a monthly disability subsidy to the employee at the following rates:
    • Degree 5 – 70% of the employee's wage
    • Degree 6 – 60% of the employee's wage

The employer shall also pay as required on behalf of the employee all the social insurance premiums payable by the employee. Where the actual amount of the disability subsidy is lower than the local minimum wage standard, the difference shall be made up by the employer.

Upon the request of an employee with a work-related injury, the labour relationship between the employee and the employer may be terminated. Please refer to Note 2 below.

Degree 7 to Degree 10

Where an employee's work-related disability is assessed at Degree 7 to Degree 10, the employee is entitled to the following benefits:

  • A disability allowance paid from work-related injury insurance funds according to the disability grade in a lump sum at the following rates:
    • Degree 7 – the employee's wages for 13 months
    • Degree 8 – the employee's wages for 11 months
    • Degree 9 – the employee's wages for 9 months
    • Degree 10 – the employee's wages for 7 months

Upon expiry of the term of the employment contract (or upon termination of the employment contract at the request of the employee), please refer to Note 2 below.

Note 1: The "employee’s monthly wage" above refers to the employee's average monthly salary throughout the previous year, which is used as the contribution base for calculating the employee's social insurances for the current year. It is capped at 300 percent of the local employee's average monthly salary throughout the previous year (e.g., the current figure for the "average monthly salary" for Beijing is CNY15,669, while for Shanghai it is CNY14,076) and not less than 60 percent of the same.

Note 2: In such cases, the work-related injury medical allowance shall be paid to the employee in a lump sum from the work-related injury insurance funds and the employer shall pay to the employee a disability employment allowance in a lump sum. Specific standards for the lump-sum work-related injury medical allowance and the lump-sum disability employment allowance shall be specified by the people's governments of provinces, autonomous regions and municipalities directly under the Central Government.

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