China: The Sichuan Provincial Labour and Personnel Dispute Arbitration Commission Issued the Minutes of the Meeting on Issues Related to the Trial of Labour and Personnel Dispute Cases (I)

On 10 March 2025, the Sichuan Provincial Labour and Personnel Dispute Arbitration Commission issued “the Minutes of the Meeting on Issues Related to the Trial of Labour and Personnel Dispute Cases (I)” (the “Minutes”).  The Minutes proposed ten new arbitration rules for issues such as compensation for work-related injury and employment relationships in new employment forms.

With regard to the treatment of work-related injury, the Minutes clarifies that even if the injured worker does not have an employment relationship with the employer, the worker may still request the payment of a one-time medical subsidy for work-related injury and a one-time employment subsidy for disability after a labour capacity assessment. The payment standards are calculated based on the average monthly wage of all employed personnel in urban employers across the province in the previous year when the work-related injury occurred.

Employers should also note that according to the instructions of the Minutes, the treatment of injured employees during the period of leave without pay belongs to the treatment of work-related injury insurance.  If an employee who has been injured at work unilaterally terminates the employment relationship on the grounds that the employer has not paid the full amount of the leave without pay entitlement and demands that the employer to pay severance, this will not be supported.

Additionally, if an injured worker claims compensation differential for work-related injury insurance benefits on the grounds that the employer underpaid the insurance premiums and provides relevant evidence, such a claim will be supported.

With regard to the employment in new forms, the Minutes stipulate that in the event of an irregular working condition during the performance of the employment contract, the monthly salary for the severance pay for the termination of the employment relationship shall be calculated in accordance with the employee’s average monthly salary over the 12 months preceding termination. If the amount falls below the local minimum salary standard, it shall be calculated in accordance with the local minimum salary standard.

Key Action Points

The Sichuan Provincial Labour and Personnel Arbitration Commission, in its circular issuing the Minutes, stated that it required labour and personnel arbitration commissions at all levels in the province to refer to the arbitration rules contained in the Minutes when arbitration. By refining the arbitration standards, it not only provides employers with clear compliance guidelines but also imposes higher demands for refined management practices. For employers, the arbitration standards clarified in the Minutes reflect the importance of legally providing work injury insurance for employees.