Legal risks of old work injuries to former workers

The work injury insurance system protects employees from physical injuries and economic burden, and employers from undue liabilities. However, in complicated cases, the system may have a hard time balancing interests

The work injury insurance system, according to related regulations, is set up “with a view to guaranteeing the workers who are injured from accidents arising from work, or who suffer from occupational diseases, to obtain medical care and economic compensation, promoting the prevention and occupational recovery from work-related injuries, and dispersing the work-related injury risks of employing entities”.

EXISTING REGULATIONS

Taking Beijing as an example, labourers are protected under the Social Insurance Law and the Regulation on Work-Related Injury Insurances, as well as policies on payments from the Beijing Work Injury Insurance Fund. Under the current work-related injury insurance system, the bulk of expenses incurred by a work-injured employee is borne by the insurance fund.

Expenses from work-related injuries comprise medical and rehabilitation costs, inpatient meals, transportation and accommodation expenses for medical treatment outside the designated area, living care expenses, assistive devices, allowances for disabilities graded one to four, and one-off medical and benefits.

Costs and items to be covered by employers are limited to work stoppage wages, allowances for disabilities graded five or six, medical expenses beyond the work injury insurance fund, and a one-time allowance for injured employees when leaving the company.

Successful implementation of the work injury insurance system ideally consists of three essential elements:

• • Quick completion of an employee’s medical treatment;
  • Prompt determination of the work-related injury by the relevant body; and
  • Continuous payment of social insurance by the employer while during medical treatment, and the ongoing recognition of the work-related injury.

However, in practice, work injury recognition and classification are not always quickly wrapped up. Medical treatment, which may have to be repeated, involves more uncontrollable and unpredictable elements. In some cases, employees terminated their relationship with their employers before their injuries were recognised as work-related, and before the medical treatment was completed. In such cases, challenging issues tend to follow.

A RARE CASE

A case the author handled was plagued by slow recognition of the work-related injury, repeated medical treatments, and departure by the employee before either the recognition or the treatment was completed. This led to more confusion than any of the parties expected.

In this case, the employee suffered a minor ankle injury not long after joining the company, and returned to work after an initial treatment. Social insurance covered 80% of expenses, and the employee herself covered the remaining 20%.

While injured, the employee took various types of leave, including sick leave at the standard sick leave rate. Afterwards, the district human security bureau decided not to recognise her injury as “work-related”. The employee then left the company after entering a separation agreement.

Subsequently, the employee applied to the municipal human security bureau for an administrative review of its determination. When that failed, she filed an administrative lawsuit with the district people’s court, which overturned the decision of both bureaus and determined her injury to be a level-10 work-related injury. The employer took part in none of the proceedings.

Meanwhile, the employee undertook a second conservative treatment and then a minimally invasive surgery with rehabilitation, all unknown by the employer. Since the employee had by then long departed from the company, these new medical expenses could not be reimbursed from the work injury insurance fund. The employer also refused payment on the grounds that a separation agreement was executed.

The questions that emerged were:

• • Should the separation agreement be revoked, and the labour relationship resumed?
  • Should the employer continue to pay salary?
  • Who should pay the 20% in the initial treatment, and subsequent treatments?
  • Should the employer make up the difference between sick leave salary and contractually agreed salary?
  • What should be done with used annual leave and the three one-off compensations?

To resolve the conundrum, the employee filed three labour arbitrations. One proceeded to labour litigation, while the other two were resolved after appeals and retrials. In the end, the ankle injury led to 10 judicial procedures lasting five years.

COURT’S STANCE

Although there are differences between the decisions and judgments, their general opinions are as follows:

(1) Termination of the labour relationship was irrevocable, with no fraudulent or unfair circumstances in the separation;
(2) Even if the employer had fully paid work injury insurance at the time of the injury, when the insurance fund cannot reimburse medical expenses the employer should still bear the full amount of medical and other expenses, within the amount audited by the local medical insurance affairs centre; and
(3) The employer should compensate for any deducted sick leave salaries during medical treatment, which demonstrates a tendency to uphold leave without pay.

The position of adjudicators is understandable, given the skewed protection of workers within the labour law framework. However, the protection of workers’ interests, and dispersing the employer’s risk of work-related injuries, are both core missions of the injury insurance system.

If an employer, having paid the full amount of the work injury insurance, is still required to pay all or most of the medical and other expenses of an injured employee, it would seem a serious departure from the original goal of the work injury insurance system.

Employers must not be careless when an employee suffers injury or illness. Even with the slightest chance of work-related injury, they should get a determination as soon as possible and follow through the entire treatment process. In this way, they will not be caught off guard if the employee decides to initiate a legal action.

Tim Meng is the managing partner at GoldenGate Lawyers. He can be contacted on +86 10 8589 6931 or by email at tmeng@goldengatelawyers.com

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