wechat ID:
lawinamin
In China, the issue of whether workers who have reached the statutory retirement age can maintain a labor relationship with their employers has sparked debate and led to conflicting interpretations. The controversy arises from the different perspectives presented by the “Implementation Regulations of the Labor Contract Law,” Ministry of Human Resources and Social Security (MOHRSS), and the Supreme People’s Court.
Combined with work permit regulations, this has become a very confusing topic for expats working in China, so I have decided to dive into this matter to provide a clear explanation to what happens after you reach retirement age in China, which is 60 for men, and 50 or 55 for women. In fact, whether the retirement age for women is 50 or 55 is another topic that is highly debated and varies across cities. For example, in Chengdu, the statutory retirement age for female employees in managerial and technical positions is 55 years old and 50 years old for female employees in production, operation, and service positions.
The first perspective regarding the labor relationship of workers reaching retirement age is based on age criteria. This viewpoint aligns with the “Implementation Regulations of the Labor Contract Law” and the MOHRSS’s stance, asserting that once a worker reaches the statutory retirement age, a labor relationship with the employer cannot be established. This criterion does not consider whether the worker enjoys pension insurance benefits or receives a pension. The argument behind this perspective is that reaching the retirement age automatically disqualifies individuals from fulfilling the subject qualification requirements specified in labor laws and regulations.
Provinces and municipalities that follow the age criterion approach include Beijing, Guangdong, Zhejiang, Chongqing, Guizhou, Hebei, Hubei and Shanxi. In these regions, once a worker reaches the statutory retirement age, regardless of their pension insurance benefits or receipt of a pension, a labor relationship with the employer is considered terminated.
On the other hand, the second perspective adopts the retirement benefit criterion, as outlined in the “Labor Contract Law” and supported by the Supreme People’s Court. According to this viewpoint, the establishment of a labor relationship between the employer and workers who have exceeded the statutory retirement age should depend on whether the worker enjoys pension insurance benefits or receives a pension. Workers who have reached the retirement age but have not availed themselves of pension insurance benefits or received a pension can still be regarded as having a labor relationship with the employer.
Areas that adopt this criterion include Jiangsu, Shandong, Jilin, Liaoning, Hunan, Jiangxi, Hainan and Yunnan, which determine the labor relationship based on whether the worker enjoys pension insurance benefits or receives a pension. If workers have reached the retirement age but have not availed themselves of these benefits, they can still maintain a labor relationship with their employers.
The third perspective introduces age criteria with conditions. Under this viewpoint, workers reaching the statutory retirement age are generally deemed ineligible to establish a labor relationship with employers. However, in certain exceptional circumstances, further assessment is required to determine whether the worker enjoys pension insurance benefits or receives a pension. If the worker does not benefit from these provisions, they may still be able to establish a labor relationship with the employer.
This perspective is prevalent in Shanghai, Tianjin, Sichuan, Anhui, Fujian, Henan and Shaanxi. These regions generally assert that workers reaching the statutory retirement age cannot establish a labor relationship with employers. However, in specific circumstances, it becomes necessary to assess whether the worker enjoys pension insurance benefits or receives a pension. An example would be the employer refusing to pay for the employee’s social insurance, causing the employee to be not able to receive pension. If these benefits are not in place, the worker may still maintain a labor relationship with their employer.
The reason why I have to emphasize on whether or not there is a labour relationship established is because this determines whether or not you are entitled to severance pay. If there is no labour relationship, you are classified as an independent consultant under a contractor contract, which means that there is no labour law protection, and hence, no severance pay. To put this plainly, if you are fired illegally, not renewed when your contract ends, your salary is deducted illegally or paid late, you will have no labour law protection and will not be entitled to severance pay.
However, there is good news. Let me introduce you to a regulation called the Interpretation of the Supreme People’s Court on Issues Concerning the Application of Law in the Trial of Labour Dispute Cases that goes in your favour. Article 33 of this law stipulates that foreigners who have obtained the “Foreigner’s Work Permit” can be recognized as having labor relationships. According to this law, any expat that holds a work permit is considered as having a labour relationship, so it is in direct conflict with the three perspectives above.