On December 1, 2014, significant amendments to the PRC Work Safety Law ("Work Safety Law") came into effect. Like in Europe, the broad subject of work safety is dealt with in numerous regulations which concern the different sectors and different dangers. However, the basis is provided in the Work Safety Law.
After the amendment, the standard of the Work Safety Law is further improved and is now comparable to the standard of the respective national laws and European Union directives in Europe. However, the big issue is how the laws are implemented and enforced in practice.
The amendments mainly focus on companies' responsibilities, safety management and supervision of the implementation of safety measures.
1. In the past, a company was required to establish and improve a work safety responsibility system. However, no clear guidelines were provided. With the amendments of the Work Safety Law, the obligations companies have are now clearer.
- According to the newly amended Article 19, when setting up a work safety responsibility system, a company shall specify the persons in charge and determine their duties and assessment standards. Such personal responsibility – which may lead to personal liability in turn – aim to ensure that safety issues are really assessed and dealt with. Companies shall also establish a supervision and evaluation system to ensure the implementation of the work safety responsibility system
- In the past, the Work Safety Law only generally required that a company shall ensure sufficient investment in the prescribed work safety conditions. Under the amended Article 20, companies are now required to actually allocate a certain amount for work safety expenses and use such funds solely to improve work safety conditions.
- For certain industries, such as companies engaged in mining, metal smelting, building construction or road transportation as well as all companies which have to deal with hazardous substances, the Work Safety Law requires the establishment of a work safety management department or the engagement of full-time work safety personnel. In the past, such requirements applied to companies with business other than the above mentioned industries only if they had more than 300 employees. With the amendment of Article 21, this threshold has now been reduced to 100 employees.
The duties and responsibilities of the work safety management department and the work safety management personnel are specified by the new provisions in Article 22. They include developing safety policies and rescue plans, organizing work safety trainings, supervising the implementation of safety measures, conducting emergency rehearsals, inspections and screening for hidden risks as well as implementing measures and corrective actions.
In addition, companies engaged in mining, metal smelting or manufacturing or storing of hazardous substances shall employ certified safety engineers to conduct the work safety management.
- In practice, work safety issues sometimes arise merely because existing safety mechanisms are not applied or not used in the correct way. Therefore, the government now aims to make sure that all employees are provided with work safety education and training. The newly amended Article 25 makes it a point that such obligation shall apply not only to regular employees, but also to seconded employees and interns. Files shall be kept to record such trainings.
- Further, according to the new Article 38, companies are required to set up rules for the screening and elimination of potential work accident risks. Again, files shall be kept to record the implementation of such rules. At the same time, the competent local authorities shall establish procedures to supervise the screening and elimination of hidden risks in companies.
2. The amended law also enforces the supervision of the government over work safety in companies.
In addition to the approval and acceptance check on matters involving work safety in accordance with the law, as required by the amended Article 59, the competent authority is required to prepare annual supervision and inspection plans in accordance with the requirements on different categories and ratings, and to conduct supervision and inspection in accordance with the plan. According to the new Article 75, the government shall set up a database of violations and shall disclose serious violations to the public and other relevant authorities. Based on the new Article 67, the authorities may also interfere directly by suspending production, business or construction, seizing or impounding facilities and equipment or hazardous substances which are not properly produced, stored or used in a company. In extreme cases, the authority even has the right to order utility providers to cut a company's electricity supply.
3. Further, the administrative fines for companies and responsible persons who infringed work safety provisions have been increased.
- According to the new Article 109, in severe cases, companies may be fined up to 20 million RMB. The minimum fine is RMB 200.000. The amount of the fine shall be determined according to the severity of the accident, taking into account the number of deaths and severe injuries as well as the amount of economic losses. However, it seems cynical that the definition of the least severe category of accidents with a maximum fine of RMB 500.000 already allows for up to three deaths. In practice, it will have to be seen how the competent authorities make use of the range.
- The fines applicable to individual persons in charge are significantly increased compared with the old law. In the past, such fines were limited to only RMB 200,000 at the maximum. According to the newly amended Article 92, now such fines are calculated as percentage of the individual person's annual income with a range from 30% to 80%. Same as the fine for companies, the exact amount of the penalty imposed on the person in charge shall depend on the severity of the accident.
Work safety is not practiced for its own sake, but to achieve healthy business environment for healthy employees to create profits in the end.
If they have not already done it, latest after the amendments to the Work Safety Law came into effect, companies should now set up a work safety management system and clearly define the responsibilities within the company. Further, rules for the screening and elimination of hidden risks shall be set up and implemented. Companies are well advised to review their existing work safety policies and their implementation in the light of the amended Work Safety Law.