China: Wages Of Employees Under Isolation And Emergency Measures

At the beginning of 2020, the sudden pandemic created unprecedented challenges in the field of labor relations. Under the rapid changes of prevention and control trends and the constant emergence of new situations and problems, companies have experienced various troubles in handling labor relations. Some problems are in past, some in the present, and many are in the future where the law and policies are unclear.

For example, how to pay wages according to different requirements from governments, ministries, villages committees, neighborhood committees, and industrial parks when it is difficult for employees to resume work? How to pay wages when employees cannot return due to local traffic restrictions and other reasons? How to pay their wages when Chinese employees cannot resume work due to overseas flight cancellation and other reasons? How to pay wages when Chinese employees outside of the country cannot return after being separated by the local government or relevant agencies or other emergency measures? As such, the continuously updated isolation policy and how to pay the wages of employees under various emergency measures have become particularly problematic for enterprises.

This article aims to explain the crux of the confusing above-mentioned problems through in-depth analysis and interpretation based on legal regulations. This article will clarify as well as provide ideas for enterprises to deal with such problems in the post-epidemic period. We also hope to provide a practical basis for the future improvement of the legislation.

1. Legal analysis

1.1 Legal basis

In response to the above-mentioned problems, on January 24, 2020, the Ministry of Human Resources and Social Security issued the "Notice on Properly Handling Labor Relations During the Prevention and Control of COVID-19 Outbreak" (hereinafter referred to as "Notice") to indicate the direction when dealing with labor relations and wage payment under specific circumstances of the epidemic. The first of article clearly states:

"Where an employee of an enterprise is unable to provide normal work as a result of being isolated and treated or under medical observation because that he/she is a patient with pneumonia, a suspected patient or in close contact with a person with the novel coronavirus infection, or as a result of the government's implementation of isolation measures or other emergency measures, the enterprise shall pay the employee remuneration during such period, and shall not terminate the employment contract with the employee in accordance with Articles 40 and 41 of the Employment Contract Law..."

According to the Notice, strictly speaking, for all employees under medical isolation, government isolation and government emergency measures, the employer shall pay wages to the employees. However, in its specific application, it turns out that the problems in reality are far more complicated than the legal provisions portray. When problems arise, no clear conclusion can be drawn from invoking existing regulations. It is mainly due to the lack of further guidance on how to interpret the relevant concepts in the Notice leading to various understandings. For example: First, how to define "patient with pneumonia, a suspected patient or in close contact with a person with the novel coronavirus infection?" Second, how to define "the government's implementation of isolation measures or other emergency measures"? How to understand the extension of "government", etc.

The author believes that in order to pierce the veil on the questions raised at the beginning of this article, it is necessary to clarify the legal concepts involved in the above provisions in order to clearly define the scope of protection by law and policy.

1.2 Clarification of concepts

Generally speaking, Article 1 of the Notice classifies the situation where an enterprise is obligated to pay employees' wages and remuneration into three categories: First, medical isolation, work stopped for isolation required by medical institutions due to diagnosis, suspicion or close contact. Second, government isolation, work stopped for isolation required by government due to diagnosis, suspicion or close contact. Third, government emergency measures, impossibility to provide normal labor because the government implemented emergency measures. The above three aspects are analyzed one by one below.

1.2.1. Medical isolation

According to Article 39 of the Law on the Prevention and Control of Infectious Diseases¹, a medical institution can impose medical isolation, and three types of situations apply:

① to isolate the patients and pathogen carriers for isolation treatment, and to determine the period of isolation according to the results of medical examination;

② to treat suspected patients, isolation treatment at designated places until a definite diagnosis is made; and

③ to keep the persons in close contact with the patients, pathogen carriers or suspected patients in medical institution under medical observation at designated places and to take other necessary preventive measures.

(emphasis added)

The understanding of medical isolation is relatively clear in practice because of specific terms such as "medical institution" and "isolation in a designated place". However, with the continuous pandemic, some accompanying problems have emerged in practice. Typically, is the isolation of patients after leaving hospital included? For example, the National Health Commission's New Coronary Pneumonia Diagnosis and Treatment Program (Trial Sixth Edition) clearly recommends that patients self-isolate for 14 days after leaving hospital. Many cities also have clear requirements. For example, the Shanghai Health Committee recommended that "patients continue to monitor their own health for 14 days after leaving the hospital, wear masks, live in a well-ventilated single room, reduce close proximity to family members contact, avoid sharing meals, have good hand hygiene, and avoid going out..." For this type of problem, comparing the conditions stipulated in Article 39 of the Law on the Prevention and Control of Infectious Diseases, it is known that it does not fall within the scope of medical isolation, because for such kind of individuals, they are not treated in isolation and not conducted isolation observation in a designated place, so the two requirements of "medical institution" and "isolation in a designated place" were not met.

1.2.2 Government isolation

Article 41 of the Law on the Prevention and Control of Infectious Diseases stipulates that:

"With respect to the places where there are cases of infectious diseases under Class A or to the persons in the special areas within such places, the local people's governments at or above the county level where the above places are located may carry out isolation measures and, at the same time, report the matter to the people's governments at the next higher level; and upon receiving such report, the people's governments at the higher level shall immediately make a decision on whether to approve the measures or not. Where the people's governments at the higher level decide not to approve the measures, the people's governments that have taken isolation measures shall immediately withdraw such measures."

According to this regulation, the subject which implements government isolation measures should be the local government at or above the county level, and the procedures for reporting to the government at the next higher level must be performed. In other words, if it does not meet the above-mentioned subject and procedural requirements, it is not surely guaranteed by law under the government isolation.

1.2.3. Government emergency measures

According to Articles 42 and 43 of the Law on the Prevention and Control of Infectious Diseases² and Article 41 of the Regulations on Emergency Response to Public Health Emergencies (State Council Order No. 588)³, local governments at or above the county level shall, upon reporting to the government at the next higher level, have the right to take emergency measures including restricting or stopping markets, theater performances or other crowd gatherings, suspending operation and business, closing of places that may cause the spread of infectious diseases, etc. For the affected area under the above emergency measures, the government can carry out sanitation and quarantine on the people, materials and transportation vehicles entering and leaving the epidemic area.

According to the above regulations, the government has the right to take all necessary emergency measures in the event of an infectious disease or epidemic. However, the subject shall still be limited to the government at or above the county level, and it needs to be reported to the higher government for decision.

1.3 Typical Q&A

1.3.1 How to pay wages according to different requirements from governments, ministries, villages committees, neighborhood committees, and industrial parks when it is difficult for employees to resume work?

According to the above analysis, the author believes that the way of paying wages needs to be judged differently according to the factors such as the subject of isolation requirements, whether it is mandatory, etc. First, if the subject of isolation requirement is not the government at or above the county level, it is not recommended to easily identify it as the government isolation we discussed above. For example, in the early stage of the pandemic, when the upper government had not yet issued a document, some industrial parks independently issued notices to personnel who come from or pass through key areas such as Hubei should strictly implement the requirements of centralized isolation or home isolation observation for 14 days after arrival.

Secondly, many provincial and municipal governments require returnees to be isolated at home for 14 days. At this time, although the subject may meet the requirements of the "government at or above the county level", the requirement of isolation is not mandatory and it is self-isolation. As we all know, the second paragraph of Article 41 of the Law on the Prevention and Control of Infectious Diseases stipulates that during the period of isolation, the government implementing the isolation measures shall provide living support for the quarantined persons. According to the meaning of government isolation of the provision, it was found that in the case of 14-day home isolation, the government does not provide living support, and people are still essentially "free", and their activities are relatively free. Thus, this situation should not be recognized as the government isolation we discussed above.

Thirdly, there is a previous stage where many provincial and municipal governments made a distinction between key and non-priority areas. Take the "Notice on Further Strictly Implementing the Prevention and Control Measures for Epidemic Situations" (hereinafter referred to as "Notice of Shanghai") issued by the Shanghai Municipal People's Government on February 11 which stipulates that "persons who come to Shanghai and return to Shanghai from key areas shall strictly implement 14 days of quarantine observation and shall not go out (Notice of Shanghai) Those who refuse to accept preventive and control measures such as isolation observation shall be investigated for legal liability in accordance with the law." The key area at that time was mainly the Hubei area, and the scope was expanded in the later period. However, there is no corresponding explanation for how to define "key areas", "key areas of concern" and subsequent treatment. Regarding how to handle such situations, the author believes that although the "Notice of Shanghai" itself has strict requirements and penalties, only one method would not be appropriate to all circumstances. If people returning to Shanghai from Hubei and other key areas are indeed forced to do centralized or home isolation, the local government/subdistrict office strictly restricts their freedom of movement and provides food and drink, then such home isolation can be considered as an extension of government isolation. However, if the implementation of isolation by personnel returning Shanghai personnel is executed independently, it should not be regarded as government isolation.

In summary, if the government isolation is identified, employees will enjoy the guarantee of wages and remuneration. If not, the employer may negotiate with the employees regarding the labor relationship and payment of wages such as preferential use of annual leaves, work from home, flexible working hours, reducing working hours, comprehensive adjustment of working hours, comprehensive adjustment of rest days, furlough, unpaid leaves, etc. If the negotiation fails, it is necessary to further analyze the necessity and rationality of home isolation case-by-case and employees' subjective faults. It decides whether the relevant employees can be subject to mandatory control or whether the original labor contract shall be conducted, etc. Here we will not go into any further details.

1.3.2 How to pay wages when the employee cannot return due to local traffic restrictions?

As mentioned above, the local government at or above the county level has the right to take various necessary emergency measures upon the decision of upper government in the event of an infectious disease outbreak or epidemic. Therefore, if the employee cannot return due to government emergency measures, the employer must pay the employees' wages.

Up to now, the reasons for employees' refusal to return to work are more diverse: some are caused by closures of roads, villages and towns, some are caused by local restriction of public transportation, some are caused by the inability to buy air tickets, and certainly includes Wuhan employees. In practice, the author believes that measures taken by local government at or above the county level such as the lockdown of Wuhan can be regarded as government emergency measures. However, other circumstances such as restricting roads and public transportation, closing villages and towns and failure in buying return tickets, which should not be expanded.

In summary, if the government emergency measures are confirmed, employees shall enjoy the guarantee of wages. If not, same as above, the employer may negotiate with employees regarding the labor relationship performance and wages payment. For example, preferential use of annual leaves, work from home, flexible working hours, reduction of working hours, comprehensive adjustment of working hours, comprehensive adjustment of rest days, furlough, payment for suspension of business and production, etc. When handling such cases, if employees' failure to return lacks objectivity, and even issue fake and exaggerated certification, the employer can manage the employees according to the rules and regulations. Here we will not go into any further details.

1.3.3 How to identify the reasons when Chinese employees cannot resume work overseas due to flight cancellation and other reasons.

The author previously handled such case. A financial manager was on vacation abroad during the peak of the domestic pandemic situation. The company asked the employee to resume work, but the manager said he could not return to work due to flight cancellation. However, the company found that although the country cancelled the route to China, there are still some airlines of other countries and China Eastern Airlines flying normally at a price slightly more expensive than normal. Similar cases are not rare.

To tackle such problems, first of all, according to the above, the subject of flight cancellation is foreign airlines, which means, a non-governmental emergency measures, so it does not belong to government emergency measures which we defined above. In regards to route cancellation, it does not mean that all routes are cancelled. Therefore, this type of situation does not apply to the protected situation under the Notice. The enterprise may put forward clear management requirements for such employees according to the actual situation, and deal with it in accordance with the rules and regulations when it is not followed by employees without a reasonable cause.

1.3.4 How to determine whether the employees cannot return to China due to quarantine by the local government/related agencies or to emergency measures?

According to the above, the subject of government isolation and emergency measures is the people's government at or above the county level. By definition, the People's Government at or above the county level comes from the Constitution of the People's Republic of China (hereinafter referred to as the Constitution). The Constitution stipulates in the preamble that this Constitution affirms the achievements of the struggle of the Chinese people of all nationalities and defines the basic system and basic tasks of the state (the People's Republic of China). Therefore, from a legal point of view, the "People's governments at or above the county level" does not include foreign governments and related agencies. To deal with the salary and treatment of such employees, it is first recommended to fully negotiate with them; if the negotiation fails, it is recommended to judge case-by-case. For example, it may be possible to refer to the failure to perform the labor contract in case of major changes happened in objective situation and to suspend the labor contract.

2. Author's suggestions

For the enterprise, the author does not agree that during the pandemic, all the responsibilities are excessively loaded on the enterprise. To so-called "overcome the difficulties together", only when the enterprise lives can more employees grow within the enterprise. This is also the reason why the author does not recommend excessive interpretation of the protection of employees mentioned in the Notice. However, for enterprises, in order to reduce the compliance risk caused by the protective stance toward employees of judicial trials when labor conflicts appear, it is recommended to use the Labor Law and Labor Contract Law for employers in areas where legislation is unclear. Capitalize on these laws on the employer's right to negotiate, solve the problems through effective communication and negotiation with employees in special periods, so as to find a balance between reducing legal risks, ensuring corporate compliance, solving corporate management needs and maintaining the survival of the enterprise.

For law enforcement, we appeal to the relevant judicial department to leave the market with a certain degree of autonomy as we believe it is not appropriate to further expand the explanation of the original rigorous meaning of the legislation particularly in this unprecedented global disaster. Blindly protecting employees will make the burden of companies heavier. On the contrary, the key to an orderly recovery and stable development of the market is building a stable triangular relationship of epidemic prevention and control, enterprise survival and development, and protection of labor rights.

As far as legislation is concerned, in the face of the various problems emerging from the sudden pandemic, legislation is the first line of defense to anticipate and efficiently respond. It is recommended that the relevant legislatures be able to clarify the vague legal concepts or legislative blank areas highlighted by the pandemic as soon as possible, so that the provisions can be applied with laws and evidence, including for unforeseen circumstances, and strengthen regulations to promote China's legislative process.

In short, in this unprecedented special period, no one can stay out of it, and no part can be ignored. Improve the legislation, strictly enforce the law, protect the rights and interests of laborers, and maintain the stable development of enterprises. Only by gathering all forces can we overcome the difficulties.

Translators: Normand Gauthier, Judy Wei

Footnotes