Answer: The standard for labor capacity appraisal for employees who suffer illnesses or non-work-related injuries is the same as that applies to the appraisal for employees who suffer work-related injuries or occupational diseases. The conclusions of these appraisals reflect the state of employees¡¯ labor capacities or disability levels.
According to the 1994 Regulations on Medical Care Leave for Enterprise Employees with Illness or Non-work-related Injuries, employers shall handle employment relationships between the two parties in accordance with the results of the employees¡¯ labor capacity appraisal disability level.
The first situation is that the result found no disability. Employees have no right to request the entitlements of disability from the employer. Both parties may continue to perform the employment contract or terminate the contract. If the employer terminates the employment relationship because the employee is health-incompetent for the work after the expiration of the medical care leave, it shall pay economic compensation.
The second circumstance is that the labor capacity appraisal conclusion shows a disability class of one to four. The employer can terminate the medical care leave, arrange the employee to stand down from the job, and then terminate the employment. The employee shall process a medical retirement due to illness or non-work-related injury and begin to receive retirement treatments. Employers do not need to pay economic compensation for the termination of such employment contracts.1Civil Judgment of the Second Instance of the Labor Dispute between Zhao and Zhao Zhigang Civil Judgment of the Intermediate People’s Court of Hefei City, Anhui Province (2019) Wan 01 Min Zhong No.1319. The court held that the employee was completely incapable to work with disability level between Class 1 to 4 and there is no need to pay economic compensation for the medical retirement.
The third circumstance is that the labor capacity appraisal conclusion shows a disability class of five to ten. The employer can terminate the employment contract, pay economic compensation (one year of service equals to a month wage, plus 30-day prior notice or payment for notice in lieu) and medical treatment allowance (not less than 6 months of wages). Please refer to Under what circumstances should our company pay medical treatment allowance to our employees? How to calculate economic compensation?
Of course, if employees or employers are not satisfied with the conclusion of labor capacity appraisal, they have the right to apply to the provincial labor capacity appraisal committee for re-appraisal within 15 days after receiving the conclusion of appraisal.2Article 16 of the Measures for the Administration of Labor Capacity Appraisal of Injured Workers in 2014.
If the employer violates the above obligations to terminate the employment contract of an injured or sick employee, it shall be liable for punitive damages. Please refer to How to calculate punitive damages? If an employer illegally terminated the employment contract of an employee whose labor capacity is assess to be within class 5 to 10, for example, it did not comply with the aforementioned position transfer procedure, it shall also bear the liability of punitive damages and medical treatment allowance.
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- 1Civil Judgment of the Second Instance of the Labor Dispute between Zhao and Zhao Zhigang Civil Judgment of the Intermediate People’s Court of Hefei City, Anhui Province (2019) Wan 01 Min Zhong No.1319. The court held that the employee was completely incapable to work with disability level between Class 1 to 4 and there is no need to pay economic compensation for the medical retirement.
- 2Article 16 of the Measures for the Administration of Labor Capacity Appraisal of Injured Workers in 2014.