Answer: It is a very complicated legal issue when an employer continue to employ an employee who have reached the statutory retirement age.
See Can an employer terminate an employee who has reached retirement age? We will explain different situations as follows.
In the first case, if the employee has started to receive basic pension insurance payment (limited to the employee’s pension insurance, excluding the social pension insurance for urban residents and the new-style rural social pension insurance),1Article 7 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Employment Dispute Cases (III) stipulates that “having received pension insurance benefits in accordance with the law” should be understood as having received pension insurance benefits for employees in accordance with the law, excluding urban residents’ social pension insurance and new-style rural social pension insurance. the employment relationship between the two parties will be automatically converted into a contractor relationship.
The second situation is that if the employee does not receive basic pension insurance payment, due to the different practices of the courts in the place where the employer is located, there are two possibilities: direct conversion to contractor relations and continuation of employment relations. Whether the employer is at fault in the employee’s failure to receive basic pension insurance payment, and whether the employer actively notifies the termination of employment relations, may produce different results.
Different results have potentially significant impacts to both parties¡¯ rights and obligations. If the relationship between the two parties is recognized as a contractor relationship, the employee will not be able to obtain some employment rights under employment law, such as double-wage damages in the absence of a written employment contract, but it should be noted that the employee may still be entitled some rights under employment law such as some work injury entitlements according to the supreme court¡¯s judicial interpretation or special provisions of the law.
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Mr. Dong Wang has been in practice for over 20 years, specializing in business law, including employment law, commercial law, company law, and intellectual property law. Mr. Wang has earned respect and trust from his clients due to his professionalism, fidielty, and kindness.
Email: wangdong@royalaw.com
- 1Article 7 of the Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Employment Dispute Cases (III) stipulates that “having received pension insurance benefits in accordance with the law” should be understood as having received pension insurance benefits for employees in accordance with the law, excluding urban residents’ social pension insurance and new-style rural social pension insurance.