Can Employee Illegally Terminated during Medical Treatment Period Claim Medical Subvention?

Nutshell

Mr Wang was employed by a pharmaceutical company as a salesman on June 1^st,2010, the last labor contract is an open one.

From March 5^th, 2015 on, Mr Wang has been on sick leave after surgery on leg fracture due to a tumble at home, during which he handed in sick leave notice and sickness documentation to the company at regular intervals.

On December 1^st, 2015, the company called Mr Wang back as the medical treatment period due, otherwise he shall be terminated for absenteeism. On December 10^th, the company terminated Mr Wang for material breach of company rules as absent over 3 days.

On Jan, 2016, Mr Wang raised labor arbitration claiming for damage on illegal termination and 6 months medical subvention.

 

Issue

The issue of this case is whether the termination legal and whether the company shall pay medical subvention.

The pharmaceutical company holds that Mr Wang is granted 7-month medical treatment period according to the related regulations in Shanghai. His failure to work after demand is absenteeism. Therefore it is legal for the company to terminate him since absenteeism over 3 days is a material breach of the company rules.

Mr Wang holds although the notice is given, he shall be entitled to the sick leave treatment since he has been handing in sick leave notice. The company shall pay the damage of illegal termination and 6-month medical subvention additionally for terminating him after medical treatment period due.

 

Judgment

The arbitration tribunal holds there is no absenteeism on Mr Wang’s  side, the company shall pay damage on illegal termination. But there is no legal base for 6-month medical subvention.

 

Comment by Lawyer Tang

According to the related clauses in Labor Contract Law, an employer may terminate an employment contract by giving the employee 30 days’prior written notice, or one month’s wage in lieu of notice if after the set period of medical care, the employee can engage neither in his original work nor in other work arranged for him by his employer.

In this case the company asked the employee to back on position right after the medical care period or otherwise take as absenteeism. Absenteeism refers to absent from work for no reason, the employee in this case on the contrary handed in sick leave notice and sickness documentation, therefore he shouldn’t be taken as absenteeism.

The correct method for the company after the set period of medical care is to ask the employee back to his original position, or arrange other work for him is the original one is impossible, under which he still handed in sick leave notice, the company can terminated him on Art 40 of Labor Contract Law, but not on material breach since it is not absenteeism.

As to the medical subvention, according to the Shanghai Ordinances on Labor Contract, on terminating an employment contract if after the set period of medical care, the employee can engage neither in his original work nor in other work arranged for him by his employer, apart from the stipulated economic severance, the employer shall also provide a medical subsidy not lower than 6 months’salary of the employee.

Therefore, only in one termination can the employee be granted medical subsidy that the company terminated the employee legally, and the employee can engage neither in his original work nor in other work arranged for him by his employer.

Even if the termination notice specifies the expiry of medical treatment period, the legal department affirms illegal termination, the medical subvention cannot be supported.