7 February 2020
In dealing with the outbreak and spread of the new coronavirus, the Chinese authorities, at both the national level and local level, have recently issued a series of notices in relation to employment law (eg the Notice issued by China’s Ministry of Human Resources and Social Security). We have summarised some of the most important employment law issues below:
Pursuant to the General Office’s Notice of the State Council dated 26 January 2020, the last day of the Lunar New Year Holidays shall be postponed from 30 January 2020 to 2 February 2020. Various local governments have also issued respective local rules concerning holiday extension or postponement of work resumption. For instance, in Shanghai, the general return to work date shall not be earlier than midnight on 9 February 2020.
In relation to the overtime work done by an employee under the standard working hours system during the adjusted and extended holidays (eg in Shanghai), other than the statutory holidays, the employer may arrange for such employee to take compensation leave at first. If no compensation leave is feasible, these employees should be paid at a rate of 200% of their regular wages during this period. For the overtime work done by an employee during the statutory holidays, such employees should be paid at a rate of 300% of his/her regular wages during this period and compensation leave will not generally be an option.
However, in many provinces and cities, the postponement of work resumption is not deemed holiday extension but a work stoppage due to government measures. In such cases, only the normal salary (ie no overtime pay or compensation leave) is required for work done during the relevant period.
If an employee is a patient infected by the new coronavirus, or if it is suspected that he/she has become infected, or if he/she has come into close contact with such patient(s) or suspected patient(s), or if he/she is unable to work due to the relevant governmental measures, the employer must pay the employee his/her regular remuneration during the isolation treatment period, medical observation period or the period of no work caused by the governmental measures.
If operations are suspended during a payment cycle (eg 30 days) through no fault of the employee (eg by the governmental measures against the coronavirus infections), the employer has to pay regular wages according to the employment contract. Should the work stoppage last longer than one payment cycle and if the employee has been providing normal work, the local minimum wage standard must be complied with. In cases where no normal work has been provided during the prolonged work stoppage, the employer shall pay the local living fees to the employee.
Except in cases of termination for cause and mutual termination, an employer may not unilaterally terminate the employment contract with their employee during his/her isolation treatment period, medical observation period or the period of no work caused by the governmental measures.
Additionally, if an employee’s contract expires during the above-mentioned periods, it shall be automatically extended until the end of such periods.
Companies should try to avoid mass layoff due to virus-related difficulties. After consultation and agreement with their employees, the employers may reduce wages and working hours as well as adjust work positions and leave arrangements. They may also apply for governmental subsidies under certain conditions.
Unless the applicable legal provisions for controlling spread of disease provide for otherwise, an employee should not be discriminated against in the course of employment on the basis of facts that he/she is/was a patient infected by the new coronavirus, or it is suspected that he/she has become infected, or he/she has come into close contact with such patient(s) or suspected patient(s), or he/she is from the region affected by the new coronavirus.
Employers shall currently try to avoid assigning their employees to work in the regions affected by the coronavirus in order to avoid work-related injury.
Employers shall strictly comply with all statutory requirements under the Work Safety Law and the Communicable Diseases Law as well as other national and local rules. They should carefully follow the legal updates, fully cooperate with healthy and security authorities, consciously take prevention measures, and immediately report infectious cases and suspected cases.
Should an employer or an employee be unable to apply for labour arbitration in time, as a result of the outbreak and spread of the coronavirus, the relevant statute of limitations shall be suspended and will only continue to run again when the cause of suspension is eliminated.
As with the outbreak of SARS in the early noughties, the risks of coronavirus raise some interesting questions for inbound employers outside China about their obligations, and deciding on the ‘right thing’ to do. Here’s an overview of some of the key points:
This could be triggered in a number of scenarios, including employees being required to travel to China on business, those in China at the time of the outbreak for either business or personal reasons and needing to return, and those stationed back in the UK and Europe who have gone nowhere near the affected area.
In the current circumstances, it would be advisable to adhere to government guidance (for example, see UK government guidance here) and to avoid sending employees to China on business until the travel and medical advice suggests otherwise.
For employees who are in China:
On return, ensure employees are told to comply with national quarantine rules, such as the 14 day disembarkation rules. You owe local staff a duty of care, including avoiding causing them anxiety, so you can ask a returner to see a doctor and provide medical evidence of their health. If you do this, you will usually need to pay them. You should be careful with your messaging to avoid stigmatising employees of Chinese origin.
Check what corporate insurance you have, for example repatriation insurance. Ask travelling employees to check their personal insurance.
Consider the issue holistically. There are a number of 'head and heart decisions' to make, and quite a lot of legal and contractual nuances.