Worker's lawsuit challenges inadequacies of China's compensation system - updated

27 June 2019
A 21-year-old migrant worker from Hunan, who lost a hand in a work-related accident last year, is challenging legal provisions that limit the amount of compensation workers can receive, irrespective of the employer’s culpability in the accident.

In July 2009, Ruan Libing, a newly recruited employee at Elec-Tech in Zhuhai, had his left hand crushed whist operating machinery at the plant. His hand was amputated in a subsequent hospital operation. Even though his working life was effectively over, Ruan received just the statutory compensation payment from Elect-Tech of approximately 90,000 yuan. In addition to the 21,000 he had received from the governments work-related injury insurance fund.

Ruan felt that the compensation award was far from adequate, especially given his age and the company’s failure to ensure his safety at work. With the help of China Labour Bulletin, Ruan sued Elec-Tech for additional compensation on the basis of Article 48 of China’s Production Safety Law, which stipulates:

Employees who suffer injuries in production safety accidents shall be entitled to claim compensation against the entity concerned if, according to the civil laws, they have the right to do so apart from enjoying the employment injury insurances according to law.

The lawsuit was accepted by the district court in Zhuhai in July 2010, making it the first time that a Chinese worker had brought a civil lawsuit against an employer after receiving compensation for a work-related injury.

During the case, Ruan’s lawyer argued that:
  • The company failed to provide Ruan with adequate training to ensure the safe operation of machinery.
  • The equipment itself was obsolete and prone to mechanical malfunction.
  • The company was grossly negligent in providing Ruan with prompt emergency medical care after the accident.
An investigation by the Hong Kong NGO Students and Scholars Against Corporate Misbehaviour (SACOM) this summer showed that during a one-year period at Elec-Tech, almost 60 workers were injured in industrial accidents, a considerable number of which led to the loss of workers’ fingers or even entire hands.

Although Ruan lost the initial lawsuit, he now plans to appeal and CLB will continue to support his case. We believe that the case is important not only because Ruan deserves to be properly compensated but also because it challenges two major deficiencies in China’s Work Injury Insurance Regulations, namely:

  • The regulations do not distinguish between situations in which the employer is at fault and when it is not at fault.
  • The regulations fail to take into account of the age of the victim in work-related injuries. 
At the end of October, Ruan accepted an out of court settlement in which the company agreed to pay him an additional 130,000 yuan in compensation on condition that he drop the lawsuit.
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