Two Mistakes in the Management of Sick Leave

Mr. Lee graduated in July 2013, and joined a Beijing Company in September. He asked for sick leave on 20th January 2014 for the first time. Till 19th July, his sick leave was 79 days in whole. In August, he asked for another 31 days sick leave. On the 1st September, the company notified him to dissolve the labor contract for the reason that his had asked for sick leave more than 3 months. Mr. Lee brought the dispute to the labor arbitration committee, finally, the committee made the order which against the company.

In this case, the company has made 2 mistakes in the management of sick leave. Mistake No.1: how to calculate the duration of medical treatment (“DMT”); Mistake No.1: how to dissolve the labor contract upon the expiration of DMT.

For mistake No.1, according to “Provisions on the Duration of Medical Treatment for Enterprise Staff and Workers Due to Illnesses or Non-Work Related Injuries” (“Provision”), DMT shall be calculated based on the employee’s actual work experience and service experience in the unit. For those employees who may ask for sick leave sporadically, the period for the calculation of DMT (especially for how to define the starting time) and the combination of 2 DMTs become the top 2 problems in calculating DMT. According to the relevant laws and regulations, the period for the calculation of DMT shall be the added up sick leave, and the starting time shall be the first time when ask for sick leave in the duration of DMT. Take Mr. Lee’s case for example, he meets the requirements for 3 months DMT, because his actual work experience is less than 10 years, and served the company less than 5 years. His DMT shall be calculated from 20th January to 19th July. When he asked for leave on 1st August, his DMT shall be calculated from zero, which means that a new DMT begins, and this DMT shall not be combined to the previous one. In view of the above analysis, the company has made the mistake in adding the sick leave of August into the first DMT. In practice, in addition to “Provision”, some local regulations may define different regulations on DMT. For example, Shanghai has stipulated that DMT shall be decided only based on the service experience in the unit, which says that the employee shall have 3 month DMT if he/she works for the employer less than one year. One more month DMT will be permitted with the one more year employment. The total DMT is limited within 24 months.

For mistake No.2, the dispute relates to dissolving the labor contract upon the expiration of DMT is very common. According to “Labor Contract Law” and relevant regulations, while DMT has been expired, the labor contract could be dissolved based on specific precondition. However, many companies might ignore such precondition, which says, the employee cannot resume his original position after the expiration of DMT, nor can he assume any other position arranged by the employer. In view of this, if the employer dissolves the labor contract directly without meeting the precondition, such action shall be deemed as violating the relevant laws.

In addition, except the above 2 mistakes in the management of sick leave, the employers shall pay special attention to the examination and approval of sick leave, the sick pay and etc..