The Employment and Management of Retirees
In accordance with relevant laws and regulations, retirees mean the person whom terminates the labor contract with the employer when he/she meets the criteria of age, type of work the work ability and the endowment insurance. Nowadays, some High-tech retirees are rehired by the enterprises in the relevant fields.
The relationship between retirees and the enterprises should be deemed as the service relation between equal entities (“Ministry of Labor on Several Issues Related to Implementation of Labor Contract”,” Reply Letter of the General Office of the Ministry of Labor on Answering to the Request for Several Issues Related to Implementation of Labor Contract”), in order to reduce the legal risks, the enterprises should set special regulations on the employment and administration of retirees.
On the employment of retirees, the enterprises should at least set special provisions on the following aspects:
Firstly, the current laws and regulations have not stipulated the comprehensive provisions on the service contract. In order to reduce the possibility of disputes, we suggest that the enterprises and retirees shall enter into a written service contract which stipulate the injury, working time, overtime treatment, additional benefits (such as tourism, etc.), termination requirements and etc.
Secondly, issues related to the application of working standards. Retirees who are rehired by the enterprises (“Rehired Retirees”) belong to the scope of special employees who shall not be regulated by “Labor Contract Law”, and there are no nationwide regulations stipulating whether the relevant provisions such as working time, working protection, and the minimum wage and etc. are applicable to the rehired employees, s. However, some local authorities have released regulations on such issues, e.g. Shanghai has stipulated that working time, working protection, and the minimum wage and other working standards regulated by “Labor Law”, “Labor Contract Law” shall be applied to Rehired Retirees.
Thirdly, issues related to work-related injury. Since there are no nationwide regulations on whether “Regulation on Work-Related Injury Insurances” shall be applied to Rehired Retirees, and the local authorities have released different regulations on this issue, many disputes have been raised in practice. In the judicial practice, currently the decisions requiring the enterprises to undertake the compensation relevant to work-related injury are more than those rejecting Rehired Retirees’ appeals. Therefore, the enterprises shall make agreement on the occupational injuries with Rehired Retirees in accordance with the local regulations. In addition, if the enterprise can purchase the personal accident insurance for Rehired Retirees to reduce the risk if permitted by budget.
On the management of Rehired Retirees, the enterprises shall focus on the following 2 aspects:
On one hand, the enterprises shall review the obligations between Rehired Retirees and his/her original employers. Some Rehired Retirees may know the leading technology in the specific industry, and have agreed with the original employers on the obligation of non-competition and confidentially of trade secrets. In order to minimize the risk of the enterprises, we suggest that the enterprises shall check the background of Rehired Retirees, whether Rehired Retirees have agreed with the original employers on special liabilities, and stipulate that such liabilities shall be undertaken by Rehired Retirees in service contract.
On the other hand, the enterprises shall manage the application of the company regulations to Rehired Retirees. There are no regulations on whether the company regulations shall be applied to Rehired Retirees. Since the relationship between Rehired Retirees and the enterprises shall be deemed as the contract relation between equal civil subject, when the enterprises have not make an agreement with Rehired Retirees on whether the company regulations shall be applied, disputes would be arisen from the management. Therefore, in order to manage Rehired Retirees more sufficiently, we suggest the enterprises shall make the 2 basic rules, (a) to stipulate the application of the company regulations to Rehired Retirees in the service contract; (b) to notify or tell Rehired Retirees about the company regulations by a reasonable method, and get his/her signature on confirmation of knowing such regulations.