Does the company need to pay financial compensation if it proposes to terminate the employment contract after the medical treatment period ends?

english.shanghai.gov.cn| August 30, 2024

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If an employee is unable to perform their original job or any other job arranged by the employer after the medical treatment period ends, is the company required to pay financial compensation if it decides to terminate the employment contract?

Yes, it is required.

According to the Labor Contract Law of the People's Republic of China:

If an employee is unable to perform their original job or any other job arranged by the employer after the prescribed medical treatment period due to illness or a non-work-related injury, and the employer proposes to terminate the employment contract, the employer must pay financial compensation to the employee.

(Note: The standard for calculating financial compensation is as follows: for each full year the employee has worked for the company, the employer must pay one month's salary as financial compensation. For periods less than a full year but more than six months, compensation is calculated as a full year. For periods less than six months, the employer must pay half a month's salary as financial compensation.)

After the medical treatment period ends, does the company need to pay any additional fees besides financial compensation?

Yes, additional fees are required.

According to Article 44 of the Regulation of Shanghai Municipality on Labor Contract:

"If an employer terminates the employment contract under the provision of Item 1, Paragraph 1, Article 32 of these regulations, the employer must provide not only financial compensation as prescribed but also pay a medical subsidy fee no less than six months of the employee's salary."

(Note: Item 1, Paragraph 1, Article 32 of the Regulation of Shanghai Municipality on Labor Contract refers to "if an employee is unable to perform their original job or any other job arranged by the employer after the medical treatment period due to illness or a non-work-related injury.")

 

Source: WeChat account of "shrsjwx"