New Chinese jurisdiction concerning labor law

1. The employer is obligated to reimburse the medical costs if he has not paid the basic medical insurance for his employee duly

According to Article 72 of the Chinese Labor Law and Article 23 of the Chinese Social Insurance Law, the employer shall pay the basic medical insurance for his employee pursuant to the applicable regulations. In case that the insurer does not pay the medical costs in the event of illness of an employee because the employer has not paid the medical insurance for him duly, the employer is obligated to reimburse the medical costs to the employee. However, not the whole costs, but only the parts that are regarded as reasonable costs by the social insurance authority  shall be borne to the official insurer.

2. Pensioners not be protected by the Labor Law; only the Contract Law applies to the legal disputes between those and the enterprise

The Chinese Labor Law shall not apply to Pensioners, who are again working for an enterprise, as they are no longer employees in the legal sense after having reached the retirement age and thus have the entitlement of pension. Therefore they do not benefit from the protection of the Labor Law.

According to paragraph 7 of the explanation 3 of the Supreme People’s Court on the applicable laws considering the trial of labor disputes, there is no employment relationship but only a service relationship between the pensioner and the enterprise which is subject to the Contract Law. As a result, the pensioner and the enterprise can also reach a service agreement orally. In case of a dispute, they can only file a law suit pursuant to the Civil Process Law. The labor arbitration is excluded.

Contact

Raymond Kok, Shanghai