Is there Labor Relation between Retired Employee and the New Employer?

★Nutshell

Mr Liu is retired from a information technology research center. Mr Liu is granted pension after the center handled the retirement procedure for him. Mr Liu entered into agreement with a private information technology development to provide consulting service after retirement.

Liu goes to work at 9 a.m. and off at 5 p.m. same as other employees in the company. In May, 2016, Liu was sick at home for a whole month. When he went to work in June and asked for his sick leave pay in May, he is told by the human resource department that it is service relation between him and the company. The agreement provides that the company shall not pay his sick leave. Liu insisted the labor relation and raised arbitration to confirm it.

 

★Issue

Is there labor relation between retired employee and the new employer?

Liu thinks he does the same work as other employees and shall enjoy the same benefit which cannot be denied just because he is retired.

The company thinks Liu is retired and no longer has a labor relation but a service relation. They signed service agreement but not labor agreement, which proves it again.

 

★Judgment

The tribunal confirms the service relation not labor relation for Liu is already retired and enjoys the pension.

 

★Lawyer Tang’s Comment

This is a dispute on labor relation between retired employee and new employer.

We think employees who reached the retire age shall be divided into two kinds, one enjoy pension and the other not.

According to Social Insurance Law, Employee who reaches the retire age and has paid social insurance for over 15 years, can enjoy pension after handled the retirement procedure.

Art 7 of Supreme Court Explanation on Several Questions on Law Application on Trials of Labor Dispute III provides that when disputes between employers and the employees they recruited who is retired or enjoys pension is put to trial in court, the court shall consider service relation.

Therefore for those who already enjoyed the retirement treat continue working, they form a service relation with the employer.

For the first kind, the service relation is clear relatively. As to the second type, there is no further regulation or explanation to clarify on the national level. The legal practice verifies from place to place. Beijing High Court Meeting Minutes on Law Application of Labor Case Art 12 provides that it is considered a service relation between employer and employee who is retired, enjoys the pension and reach the retire age.

GuangDong High Court Meeting Minutes on Law Application of Labor Case Art 11 provides that it is considered a service relation between employer and employee who is retired but does not enjoy the pension.

Therefore Beijing and Guangdong take this situation as service relation instead as labor relation.

Shanghai High Court gives a more detailed explanation on the situation. Shanghai High Court Answers to Law Application,2012 provides that for those who reaches the retire age but the employer keeps the employment without handle the retirement procedure, it should be taken as labor relation.; for those who reach the retire age and terminated by the employer, but cannot enjoy the pension because the social insurance paid shorter, they can enjoy the pension after compensate the years according to the Social Insurance Law. The dispute arising from the employer afterwards shall be taken as service relation.

Therefore for those who keep working after retire age cannot simply be defined but requires judgments according to the situation. Meanwhile, we wish the legislation or judicial interpretation on the national level can specify it.