Simon Says: Does Injury at Work Insurance Apply to the Self-Employed in China?
Published08/02/2017 by Simon Choi
This is the twenty-third in a weekly series of legal advice provided in a short and entertaining story format.
Keywords: Social Security Insurance, Injury at Work Insurance, Work Injury, Compensation
Does Injury at Work Insurance apply to the Self-Employed in China?
Jack was the owner of a small factory in Qingdao. Recently, business hasn’t been going well and he was losing money. Half of the factory workers were laid off, and the new robotic arms he bought last year had not been used at all.
Jack had no choice but to receive a toy order from which he wouldn’t benefit much. He would only be paid a few millions, and that wasn’t even enough to cover the outstanding payment of the robotic arms. Labour costs were also rising, and the factory workers would not work for less than 3,000 Yuan a month.
As a smart person, Jack came up with an idea. He changed the contract conditions to workers being self-employed, and he would give them a dormitory to live in, and food to eat at charge basis. As a result, workers could be paid only two-thirds the original costs.
The plan went all well until one of the workers, Alex, got injured while operating the robotic arms. Alex, losing the function of his right arm, demanded Jack to pay him compensation.
“You didn’t teach us how to operate the robotic arms properly, and as a result, I now have to pay hospital bills. Pay me a a year’s compensation, and my hospital bills” Alex demanded.
“It’s your own fault. If the robotic arms were so dangerous, you wouldn’t be the only one injured.” Jack replied.
“Please boss, I have been your worker for ten years. I have a wife and three kids to feed. I have work insurance.” Alex pleaded.
“Work insurance? You are self-employed. I shall not give you a penny.” Jack dismissed Alex away.
“I shall go to the cops then.” Alex stormed away.
Will the court sue Jack for not paying the compensation?
Prof Simon Says:
No, there are no statutory obligations to Alex as he is a self-employed and he has to pay his own medical bills in this case.
As the new contract classifies Alex as a self-employed, he is no longer subject to social security programme which is mandatory for employer and employee relationship. Any injuries incurred during Alex’s work are his own liability to cover such loss, and Jack does not have to compensate him at all. Alex has to insure his risks by commercial insurance instead.
For more about this or to contact Professor Simon Choi at www.acmeardent.com, email@example.com, +86 13823677853 or by WeChat: simonhkchoi.
"This article was originally written in Chinese by Mr Huanyu Li and rewritten into English by Simon Choi."
About the Author: Professor Simon Choi
Prof Simon Choi, solicitor and linguist, is an international lawyer, qualified to practise law in England & Wales and in Hong Kong, China. Simon graduated from law schools of the Peking University, the University of London and the University of Hong Kong respectively, with an in-depth knowledge of Chinese laws and common laws and with more than 20 years experience in China practice and international trade, investment, finance, merger & acquisition. He is an adjunct professor of laws at the Zhongnan University of Economics and Law. Simon is the founding partner of Acme Ardent and can be reached at firstname.lastname@example.org or +86 13823677853.
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