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Work Injury Insurance Liability and Obligation


Translators: Normand Gauthier, Su Yiwei
In 1951, China promulgated the Work Insurance Regulation, which stipulated for the first time the treatment and compensation for work-related injuries of enterprises’ employees. The Trial Measures for Enterprise Laborers’ Work Injury Insurance formulated by the former Ministry of Labor in 1996 as a pilot regulation stripped the work-related injury insurance system of its independence and established the basic framework of the work-related injury insurance system, and issued corresponding implementation rules have been issued in various localities to further refine and consolidate the protection of the rights and interests of employees with work-related injury.
In April 2003, the State Council promulgated the first edition of the Regulations on Work Injury Insurance, which regulated the work injury insurance system in the form of administrative regulations. It is an important measure to improve the work injury insurance system in China, and it marks the basic establishment of the work injury insurance system in accordance with China's labor relations system and economic situation. After the introduction of the first edition of the Regulations on Work Injury Insurance, relevant departments have successively introduced a series of policies such as the Measures for the Identification of Work Injuries and Measures for the Diagnosis and Appraisal of Occupational Diseases, which further promoted the development of work injury insurance. However, there are also imperfections in the implementation of the first edition of the Work Injury Insurance Regulation, such as the scope of work injury identification is not reasonable enough, identification procedures are complex and time-consuming, and work injury treatment standards are low. These problems need to be resolved and improved from the institutional level.
On December 8, 2010, the 136th executive meeting of the State Council passed the Decision of the State Council on Amending the Regulation on Work-related Injury Insurance which led to the revised Regulation on Work-Related Injury Insurance (hereinafter referred to as the Regulation) and officially came into effect on January 1, 2011. The work-related injury insurance system has been optimized, which has played a positive role in safeguarding the legitimate rights and interests of employees with work-related injury.
The opposite of right is obligation and the Regulation also clarifies that both society and employers should pay for the health costs of workers. Therefore, this article aims to differentiate and integrate the employer’s work-related injury insurance responsibilities and obligations under the normal (legal form) and abnormal (illegal form) model.
1. Normal obligations
1.1 Pay work injury insurance
Under the premise of a legal form, the employer’s primary conventional injury insurance liability is to pay the work injury insurance premium on time. According to the Regulation, employers should pay work-related injury insurance premiums for all employees of the company regardless of whether it is full-time or part-time, urban migrant workers. (The work-related injury insurance contribution for flexible employees is more special, please refer to the relevant regulations of each region)
1.2 Apply for work injury certification
If an employee is injured in an accident, or is diagnosed or identified as an occupational disease in accordance with the provisions of the Occupational Disease Prevention and Control Law, the work unit shall submit an application for work injury certification. This application to the social insurance administrative department of the pooling area shall be done within 30 days from the date of the accident injury, or the date of diagnosis or identification as an occupational disease. Under exceptional circumstances and with the approval of the social insurance administrative department, the time limit can be extended appropriately.
1.3 Pay compensation for work injury
The establishment and improvement of the work-related injury insurance system in China has largely reduced the employer’s work-related injury risks. However, the employer still has some payment obligations when an employee is injured.
1.4 Retain labor relations
According to the provisions of Article 35 to Article 37 of the Regulation:
(a) Grade 1-4
Where an employee's disability due to his work is assessed to fall in grade 1 to 4, the labor relation shall be retained…”;
(b) Grade 5-6
 “…labor relation with the employer shall be reserved, and the employer shall arrange a proper post (…)Upon the request of an employee who suffered a work-related injury, the employment relationship between the employee and his employer may be rescinded or terminated…";
(c) Grade 7-10
…If a labor or employment contract is terminated upon expiry, or an employee himself requests for rescinding the labor or employment contract…
In addition, according to articles, 42, 44 and 45 of the Labor Contract Law, an employee who “…has been confirmed as having lost or partially lost his capacity to work due to an occupational disease or a work-related injury during his employment with the employer…” shall not be unilaterally dismissed by the employing unit without fault (Labor Contract Law articles 40 and 41). If the labor contract expires, it shall be executed in accordance with the provisions of the Work Injury Insurance Regulation.
In other words, for employees with work injury , the employer shall not terminate the labor relationship without employee’s fault. At the same time, only the labor contract of employees with grades 7-10 can be terminated when expire.
So, for the "universal ground" that we usually understand as applicable under any circumstances, should it be terminated for fault on the ground of article 39 of the Labor Contract Law; or negotiated?
Regarding the dismissal of employees with work injury, although it is possible to dismiss for fault, the author suggests that the employer should consider the dismissal much more carefully than under regular circumstances. A particular attention to rationality, legitimacy, and strict retention of evidence is needed, in cases of labor disputes, the judge will consider the employee special circumstances of work injury and may apply higher standards, leading to determining the dismissal as illegal. This is especially important if the work injury is grade 1-4, even if the employee does violate the rules and regulations of the employer, it is recommended that to consider the significant impact that the dismissal of an employee with work-related injury employee of that grade will have on their subsequent work injury benefits, and treat the matter more cautiously. In addition, according to the case published in the Supreme People's Court Bulletin, the employer should also pay a one-time disability employment subsidy for employees who have been dismissed for fault.
As for negotiated termination, after the labor ability appraisal is issued, the employer can calculate the relevant compensation benefits that the employee will be entitled to in the future, and negotiate with the employee to terminate the labor contract at based on the treatment standards stipulated by laws and regulations. However, before the labor ability appraisal is issued, the author strongly recommends that the employer should not rush to negotiate a termination with the worker. Under the premise that the worker's disability grade is unknown, legal obligation to maintain labor relationship and the treatment for work-related injuries are unknown. If a termination is negotiated under such conditions, the worker may come back to cancel the negotiated agreement on the ground of major misunderstanding or apparent unfairness.
1.5 Extra-legal obligations: urge the appraisal of labor ability
According to the Regulation, if an employee suffers a work-related injury and has a disability after treatment and the injury is relatively stable, which affects his working ability, he shall undergo a working ability appraisal. After the labor ability appraisal result is issued, based on the disability grade, the employer and the work-related injury insurance fund can pay the relevant benefits. The labor ability appraisal is also a corresponding proof of the end of the paid suspension period. Therefore, in practice, it is usually recommended that the employer keeps continuous attention to the employee's injury treatment. If the injury is relatively stable, the employer can submit a proposal to the local Labor Ability Appraisal Committee and clearly inform the laborer, as its rights are also its obligations, it should carry out the labor capacity appraisal. This will confirm the cut-off point of the paid suspension period, and clarify employee's work injury situation, labor relationship, and benefits.
2. Abnormal obligations
2.1 Failure to pay work injury insurance on time
According to Article 62 of the Regulation:
Where an employer which should purchase work-related injury insurance according to this Regulation fails to do so, the social insurance administrative department shall order it to purchase within a prescribed time limit and pay work-related injury insurance premiums payable, and impose a daily late fee at the rate of 0.05% of the outstanding amount; and if the employer fails to pay the premiums within the time limit, a fine of one up to three times the outstanding amount shall be imposed upon it.
If any employee of an employer which should purchase work-related injury insurance according to this Regulation fails to do so suffers a work-related injury, the employer shall pay the expenses according to the items and rates of work-related injury insurance benefits as provided for in this Regulation.
After the employer has purchased work-related injury insurance and made up the work-related injury insurance premiums and late fees payable, the expenses newly incurred shall be paid from the work-related insurance funds and by the employer in accordance with this Regulation.
2.2 Failure to apply for work injury certification on time
According to Article 17 of the Regulation:
…Where an employer fails to file an application for ascertainment of a work-related injury in accordance with the preceding paragraph, the worker who suffered from the injury or his close relative, or the trade union organization may, within one year as of the day when the accident injury is occurred or when the employee is diagnosed or assessed to have the occupational disease, directly file the application for ascertainment of the work-related injury to the social insurance administrative department of the region subject to overall planning where the employers is located.
Where an employer fails to file an application for ascertainment of a work-related injury within the time limit provided for in Paragraph 1 (above) of the present article, the expenses for the treatment of the injury, etc. during this period, which conform to the present regulation, shall be borne by the employers.
Then, if neither the employer nor the worker filed an application for work injury certification within the time limit, does the employer have any obligation to treat or compensate?
The author believes that work injury determination is not a necessary prerequisite for injured employees to enjoy compensation. The Regulation do not stipulate that workers who have not applied for work injury determination or passed the administrative procedures for work injury determination will lose their right to enjoy benefits. It can also be seen from the vocabulary in the Regulation that the employer’s application for work-related injury determination is “should”, relative to worker which is “can”. Therefore, the author believes that after the one-year time limit workers can still, through arbitration, require employers to pay work-related injury benefits or bear tort liability for work-related injuries or deaths. Of course, workers also need to pay attention to the corresponding statute of limitations. As for how to choose the above two remedies, as there are no laws and regulations that provide clear and unified provisions on the protection of the rights and interests of workers who have been injured or died due to work-related injuries beyond the time limit for application, in practice, the judicial standards or jurisprudence is not consistent.
Looking at the employer’s work-related injury insurance responsibilities and obligations under the above-mentioned normal and abnormal situations, although the establishment of the work-related injury insurance system has added a certain degree of employment costs to the employer, the counter-balance is some coverage of costs for employees who suffered work-related injuries and deaths. China’s work-related injury insurance system fills its purposes, importantly for employers, to share the employment risks. In addition to clarify rights and obligations in work-related injuries, we hope that employers can understand that fulfilling their obligation not only safeguard the rights and interests of workers, but is also risk control and public relations management for their own employment costs and corporate image.

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