Is there a Labor Relation between Retired Workers and New Employer?

Nutshell

Mr Liu is retired from an information technology research center. After that, the center handled the retirement procedure for him and Mr Liu began to enjoy the pension. To enjoy the retirement life, Mr Liu entered a contract with a privately operated information technology development company to provide consulting service.
Mr Liu go to work at 9 a.m. and off at 5 p.m. like other employees. From May, 2016, Mr Liu rest at home for a month due to health reason. When back to work on June, he asked the company for sick leave payment for May and be told by the human resources department that there is just service relation between him and the company. The contract prescribed that the company wouldn’t pay for sick leave. Mr Liu thinks he is in a labor relation with the company, therefore the company shall pay the sick leave payment. Then he brings up application to the Labor Dispute Arbitration Committee to comfirm the labor relation.

Issue

Is there a labor relation between employees on pension insurance and the new employer?
Mr Liu thinks although he is on pension insurance, his job is exactly with the other works who go to work every day. His labor relation cannot be denied only because of pension.
The employer thinks Mr Liu is on pension insurance. According to the Interpretation on Labor Dispute III, there is service relation between them.

Judgment

The tribunal thinks for those who enjoyed the pension insurance can only establish service relation but not labor relation with the company.

Comment by Lawyer Tang

This is a case on the dispute whether there is labor relation between retired workers and employers.

There are two kinds of employees who reach retirement age divided by pension insurance, employees on pension insurance and not.

According to the Law on Social Insurance, employees who reach the retired age can enjoy pension insurance if he pays 15-year social insurance.

According to the High Court Interpretations on Labor Dispute Trial III, Art 7 that the dispute between the employees on pension insurance or claim pension with the employers, it shall be submitted to the court as service relation.
Therefore for those employees who continue working after retired, there is service relation but not labor relation.

The first kind i clear that it is service relation. The second kind is complicated for current law and interpretation doesn’t give clear solution, therefore practices are different in provinces. Beijing High Court for instances in Meeting Minutes on Labor Dispute Resolution Discussion II, Art 12 provides that for workers enjoy pension insurance, or get pension or reach retired age, their working relation with old or new employer shall be considered as service relation.
Guang Dong Province High Court for another instances in Meeting Minutes on Labor Dispute Resolution Discussion, Art 11 provides that for workers who reach retired age but not enjoy pension insurance, or get pension, their working relation with the employer shall be considered as service relation.
It‘s easy to see that Beijing and Guangdong both considered it service relation between the workers who reach retired age but not enjoy pension insurance but not labor relation.
Shanghai High Court give more delicate interpretation on further two situations. Shanghai High Court Answers on Civil Law Application First Installment, 2012 provides that it is considered labor relation between the employer and workers who reach the retirement age but kept employed by the employer without going through the retirement procedure; for workers who reach the retirement aged and terminated by the employer, they can compensate the social insurance fee according to the Social Insurance Law for the insufficient working years to get pension, the working relation is considered service.

Therefore it is not easy to determine the relation between employees and employers just through retirement age, there are more circumstances shall be considered.