Revision of work-related injury insurance regulation

Jin Mao PRC Lawyers
Henry Mao and Alex Lin
[email protected]; [email protected]

The State Council has released the Decision on Revising the Work-Related Injury Insurance Regulation (New Regulation) with effect from January 1 2011. In doing so, it has settled the controversy, which lasted for long time, on whether employees who are injured on the way to and from work should be protected by work-related injury insurance. The New Regulation inclines to protect employees in the following four respects:

Expansion of application

According to the Work-Related Injury Insurance Regulation, issued on January 1 2004 (the Former Regulation), those parties entitled to participate in work-related injury insurance were narrowed to enterprises and individual business operators with employees. The scope of this is much more limited than the definition of the employers as stipulated under the PRC Employment Contract Law (中华人民共和国劳动合同法) . Such differences lead to conflicts in practice. For example, staff employed by social institutions fail to enjoy work-related injury insurance despite their employment relationship having been legally established. The New Regulation unifies the policy by expanding the coverage of work-related injury insurance to public institutions (subject to civil servant laws), social institutions, privately-owned non-enterprise entities, foundations, law firms and accounting firms.

Adjustment of scope

The scope of work-related injury is adjusted in two respects under the New Regulation: (a) it does not exclude that the injury occurred on the way to and from work as a kind of work-related injury. Rather, it broadens it to injury caused by motor vehicle, non-motor-vehicle traffic, city rail, passenger ferry and train accidents occurred on the same. However, it sets a new criteria as 'non-prime default principle', which means a staff member or worker will be deprived of the benefit of work-related injury insurance if he/she is primarily liable for his/her injury; and (b) it deletes the provision that the injury shall not be deemed as a kind of work-related injury if it is incurred as a result of a negligent crime or violation of the administration of public security. Meanwhile, it adds the provision that any injury incurred as a result of drug taking b the employee shall not be deemed as a kind of work-related injury.

Simplification of procedures

The complicated and time-consuming procedures for the assessment of work-related injury had always been criticised. The Former Regulation provided that there were four stages to go through. And it was common to take several months or even years to reach a final determination. The New Regulation has made three revisions to simplify the procedures: (a) introduces the administrative summary procedures and provides that any application for determination of work-related injuries involving clear facts and definite obligations and rights, the administrative department of labor security shall make a decision within fifteen days upon the acceptance of such application; (b) specifies that the time limit for re-assessment or review assessment shall be subject to that of the first assessment; and (c) cancels the provision that the judicial review shall not be started before the administrative review and stipulates that in an work-related injury dispute, the relevant entity or individual may either apply for administrative review or judicial review.

Improvement in benefits

The New Regulation eliminates regional differences and unfairness by unifying the payment standard to 20 times the disposable income of state urban residents in the previous year i.e. for the year 2009, payment is approximately RMB340,000. Moreover, the lump sum disable benefit payment has also been increased by one to three months' salary according to the disability level.

The New Regulation strengthens the protection of employee rights and is welcome and applauded. Nevertheless, there remain some practical problems to which one should pay attention. Firstly, in order to enjoy the benefits, employees require confirmation of the employment relationship. However, it is still quite common for employers to be reluctant to sign labour contracts or pay insurance premiums, both of which set obstacles for employees to realize their rights and benefits. Secondly, the New Regulation does not define “the way to and back from work” and adds the “non-prime default principle”, which makes the determination of work-related injury unpredictable. Furthermore, the benchmark of the lump sum benefit payment for death seems too high in underdeveloped regions but lower in developed regions. This may result in another kind of inequality. In conclusion, the New Regulation reflects the pursuant of social fairness and advancement. However, the theory of absolute equality may never be achieved.