★Nutshell
A construction company in Shanghai contracted out part of a building construction project to Li. Jia was personally employed by Li as a construction worker. During a construction work, Jia fell off from a high level, which led to a comminuted fracture in the tailbone. Jia claimed that Li should be responsible of paying the compensation for the work injury, yet he was told that Li, being a natural person, is not a legal subject capable of bearing the responsibility of making such a compensation. Afterwards, Jia raised labor arbitration against the construction company, claiming for a retroactive signing of the labor
contract and double salary for the period during which the contract had not yet been signed.
★Issue
Jia believed that the construction project he worked for belonged to the said Shanghai construction company. Since Li was not a law-defined employer, Jia thought that he should have labor relation with the construction company.
The company claimed that it had contracted out part of the project to Li and Jia was personally employed by Li. The company neither supervised Jia nor paid him any salary, and thus there should be no relationship between Jia and the company.
★Judgement
The arbitration commission ruled after the hearing that the construction company should bear the responsibility of making the compensation for work injury, but there was no labor relationship between Jia and the company. The construction company had no other obligations to Jia aside from the occupational injury compensation.
★Comment by Lawyer Tang
This case is a dispute on whether a construction worker had labor relation with the company contracted out a project.
According to Article 4 of Notice on the Determination of Matters Relating to Labor Relations: “When construction or mining companies contract out business or franchise to organizations or natural persons that don’t qualify as legal subjects capable of employment, the companies should take the responsibility as employers to the workers employed by the said organizations or natural persons.”Also according to Article 94 of the Labor Contract Law: “In any case any worker is hired by an individual as a business operation contractor in violation of this Law, if any damage occurs to the worker, the contract-letting organization and the individual business operation contractor shall bear joint and several liability for compensation.”
As a result, there’s a point of view stating that “If a project was contracted out for several tierss to subjects not qualified for legal capability of employment, it should be admitted that labor relationship exists between the actual construction worker and the any of the subcontractors that is a legal subject capable of employment.
We don’t agree with this point of view. We think that the two regulations above merely allow the workers to make the claim, whenever any damage occurs to them, that the contract-letting company as a legal subject capable of employment should be responsible of making the compensation, or in short, to find a employer to “pay” for the damage. However it does not mean that the “paying” employer and the worker has labor relation. Employer responsibility and labor relation are two different legal concepts. Taking employer responsibility does not mean the existence of a labor relation between the employer and the worker.
Whether the worker has labor relation with the employer is decided by the several conditions that constitute a labor relation. These includes whether the worker is under the supervision and direction of the employer, whether the labor the worker provides is a part of the employer’s business, whether the employer provides the worker with basic labor conditions and pays salary, etc. These conditions do not exist between the contract-lettng company and the actual worker. As a result, there’s no labor relation between the two parties.
Article 7 from Opinions of the Ministry of Human Resources and Social Security on Several Issues Concerning the Implementation of the Regulation on Work-Related Injury Insurance states that:“If an employer subcontracts out business to organizations or natural persons unqualified as legal subjects capable of employment, causing occupational injury or death to workers employed by the said organizations or natural persons, the subcontract-letting employer should be responsible of paying the compensation as is ruled by the law.” We can see that this article emphasizes only the subject bearing the compensational responsible for work injury, and it is inappropriate to deduce that such a subject should have any labor relationship with the injured worker.
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