The outbreak of the Coronavirus (COVID-19), which originated in the Chinese city of Wuhan, has far reaching implications; affecting both society and business. The Coronavirus, which is most severe in China (specifically the Hubei region), has necessitated the implementation of safety procedures, in order to contain the virus and limit its effects. Various rules and guidelines have been set out by local governments as well as the national government of the People’s Republic of China (PRC). Regulations on health and safety, both on a local and national level, place certain obligations on employers. This notification presents an overview of an employer’s obligations as well as the current measures being applied by employers in China.
Obligations of the Employer
In China, there is a general obligation on employers to provide employees with a safe and healthy work environment. This requires employers to implement measures to ensure that the work environment is safe and healthy; and protective gear must be provided if necessary. Failure to meet this obligation may result in government sanctions or an employer being liable to an employee or his/her family members.
The PRC law on the Prevention and Treatment of Communicable Diseases (the “Communicable Diseases Law”) places a legal obligation on employers to prevent and control communicable diseases. Examples of these obligations include:
- Co-operating with the prevention and control measures that have been taken by the relevant medical institutions and the disease prevention and control authority;
- Ensuring transparency by providing truthful information to the relevant medical institutions and the local disease prevention and control authority;
- Reporting any suspected infectious cases promptly to the relevant medical institutions and the disease prevention and control authority;
- Continuing to pay employees their normal salaries during a period of quarantine; and
- Ensuring that any employees who have been confirmed or are suspected of having an infectious disease, are not being discriminated against.
On the 24 January 2020, the Ministry of Human Resources and Social Security (“MOHRSS”) issued a notice which details the appropriate measures to be followed in the handling of employment relationships (specifically in relation to the Coronavirus). Employers are required to abide by the rules outlined in the notice, some examples of these rules include:
- Any employee who is suspected or confirmed of having the Coronavirus, or has been in close contact with another person suspected or confirmed of having the Coronavirus; shall be paid his/her normal pay;
- Any employee who has been absent from work due to being under medical observation, receiving treatment or is subject to quarantine (this is considered a protected period), shall be paid his /her normal pay during the protected period; and
- An employee’s employment cannot be terminated during the protected period, unless there is just cause e.g., serious misconduct.
Local notices have been issued by many provinces and cities, postponing the resumption of work after the Chinese New Year holiday period. This is to prevent the Coronavirus from being spread and to ensure a safe working environment for employees.
The MOHRSS, together with the All-China Federation of Trade Unions and two other departments, issued a notice on the 7 February 2020. The notice provided guidelines and suggestions to employers on the resumption of work after the Chinese New Year holiday period; the guidelines:
- Encouraged employers to consult with employees on alternative working arrangements. These arrangements include working from home or taking annual leave, if the employees are unable to conduct their work as per usual, due to the outbreak of the Coronavirus; and
- Encouraged employers to consult with employees and arrange flexible working schedules, staff rotations or reduced working hours.
Period of Quarantine in China
In terms of the recommendations made by the government of the PRC, any persons travelling from one city to another or those returning from other countries, are required to self-quarantine for a period of 14 days. This recommendation requires people to isolate themselves by staying at home and restricting contact with other people.
As the outbreak of the virus is quite unique in nature, it is important for certain measures, such as working remotely, to be implemented. Such procedures should be established to ensure the safety of employees and compliance with government regulation.
Working from home/working remotely
In order to reduce a congregation of people, the Chinese government is encouraging employers to allow their employees to work from home. It is unclear, in terms of the law, whether an employer can direct an employee to work from home (as opposed to merely making a recommendation).
As it is consistent with the government’s recommendation and with the obligation to ensure employees health and safety, it would be deemed reasonable for employers to unilaterally direct their employees to work from home due to the outbreak of the Coronavirus. If an employer requests employees to work from home, the employees should be paid their salaries as per normal.
Furthermore, if an employee is required to self- quarantine for 14-days, as directed by the government, he/she is still entitled to receive full pay and benefits.
Request for leave
In line with the emergency measures introduced by the Chinese government, employers are encouraged to consult with their employees on the taking of statutory leave in a case where an employee is unable to resume normal operations (e.g. an employee is unable to work from home). Under the ‘national leave regulations’, an employer may request for an employee to take his/her statutory annual leave or provide additional leave, based on overall business considerations and the employees’ willingness to take leave. The recent notice, however, does not lay out strict guidelines on the consultation procedure.
It is recommended that employers request their employees to work from home as a prioritized means, as opposed to requesting them to take annual leave. It will also be deemed reasonable for an employer to request for his employees to take annual leave as a precautionary prevention measure, in light of the outbreak of the Coronavirus.
Restrictions placed on travel
Strict quarantine measures have been imposed by the government on the movement of people. In an effort to contain the outbreak of the Coronavirus, the government has imposed a lockdown on Wuhan and some other cities in Hubei (the province in which the outbreak started). This entails that those who are currently in Wuhan or another city on lockdown are unable to leave that city for the time being.
Subject to the rules that local governments have imposed in each jurisdiction, employers are to restrict any employees who have recently travelled to Hubei, from returning to the city where they work. In certain cities, employers are prohibited from instructing employees to return from a ‘hot-zone’, to the city where they work, before the date of resumption of has been determined by the local government. Any person who has been travelling is required to abide by the quarantine requirements, as set out by the government.
The PRC Immigration Administration issued a notice, which takes effect from the 29th of January 2020, stating that entry and exit administration bureaus nationwide are suspending the acceptance, the examination and approval of permits for mainland China residents to travel to Hong Kong and Macau. This regulation is applicable until further notice.
Employers are encouraged to stay up to date with the travel rules imposed by both the local and national government. Employers are further required to collect their employees travel and health information and report this information to the government if required to do so. Even once businesses have re-opened, travel plans should be carefully reviewed and monitored for a period of time.
Current measures being adopted
Currently, employers are adhering to the recommendations issued by the government in order to deal with the Coronavirus outbreak. Some examples of the measures currently being adhered to:
- Delaying the date employees are set to resume work;
- Taking extra safety precautions such as temperature checks, regular disinfection of the workplace, distributing face masks, providing sanitizers etc.;
- Adapting work schedules, allowing employees to work from home, reducing working hours etc.;
- Collecting travel and health information from employees and reporting it to the relevant local health authority, as directed; and
- Allowing employees to self-quarantine, in accordance with the government-imposed rules.
Due to the severity of the situation, if great difficulty has been caused to the operations of a business, an employer may consult with employees and request for certain measures to be adopted, in order to minimize the risk of laying off employees. These measures include (but are not limited to) having employees work in shifts, shortening working shifts and adjusting salaries.
If, as a result of the Coronavirus outbreak, an employer suspends business operations, he/she is prohibited from placing employees on unpaid leave for a continuous, undefined period of time. As such, the employer is required to pay employees as specified in the work contract (pay as per normal) for the first pay cycle (the first month). For the period after the first pay cycle (after the first month) an employer must:
- Pay a salary no less than the local minimum wage to employees who have performed their work duties; and
- Pay a “living fee” to employees who were unable to fulfil their work duties (the “living fee” amount is determined in accordance with the relevant local regulations).