A. Summary of the Case (hereinafter as the “Case”)

Mr. Tan worked as a service representative at the Customer Relationship Operation Department of Kunshan Hua A Company (the “Company”). He returned to his dormitory after work at 1:00 AM on December 12th, 2013, and was found dead at 11:00 PM on the same day. It is initially diagnosed by the Kunshan City Huaqiao Medical First-Aid Station that the cause of his death was on-site sudden death.

The court found that Mr. Tan’s medical examination report dated June 29th, 2013 suggested his physical condition was healthy without diseases. The Company’s attendance records from October 1st, 2013 to December 11th, 2013 showed that the Company arranged a shift system for Mr. Tan’s working schedule. Except for 5 working days in which he worked less than 8 hours, Mr. Tan worked 8 hours or more per working day for the rest of that period. For 7 working days, he worked more than 8 hours per day. (The number of working hours stated above does not include the 1-hour lunch time). On December 11th, 2013, the employer had arranged Mr. Tan to work for 9.5 hours.

B. The Court’s Judgment

The court ruled that the Company shall bear 40% of the tort liability for the loss caused by Mr Tan’s death.

C. Comments and Analysis

Typing in search engines “sudden death from overwork”, “karoshi” or similar terms can generate numerous media reports of employees’ sudden deaths from overwork in recent years, indicating that the phenomenon is quite commonplace and has caused widespread concerns. The word “Karoshi” originates from Japan. It is a by-product of social and economic development and the increasingly fierce market competition. If an employee dies suddenly at home after working overtime, the employer should not only try to console his family to prevent conflicts from intensifying, but also consider any legal consequences it shall bear. Combined with the judgment of this Case, this article will analyze hereto from following aspects:

a. Should the Company be responsible for his death due to work-related injuries?

The Article 14 and Article 15 of “Regulations on Work-Related Injuries Insurance” specify the standards to identify work-related injuries and those injuries that will be deemed as work-related injuries, among which there is a relatively similar circumstance, namely “where an employee dies immediately on the job or within 48 hours after emergency treatment for a disease suddenly arising during working hours in the workplace” (“working hours & workplace + 48 hours”). However, as shown in this case, Mr. Tan died after returning to the dormitory after work instead of “immediately or within 48 hours after emergency treatment for a disease suddenly arisen during working hours in the workplace”. It cannot meet the standard of “working hours & workplace + 48 hours” provided by Article 15 of “Regulations on Work-Related Injuries Insurance”. Therefore, in the present statutory frame and judicial practice, it is hard to identify the sudden death of employees as a work-related injury.

b. Is the employer’s arrangement of the employees’ overtime work exceeding statutory limit at fault?

Though the sudden death of an employee is not generally identified as a work-related injury, it doesn’t totally exempt the liabilities of the employer. If the employer’s conduct satisfies the elements provided in the “Tort Law of People’s Republic of China”, the employer shall still bear corresponding legal liabilities.

Article 41 of the “Labor Law of the People's Republic of China” provides that an employer may extend working hours if necessary according to its production or business operation after consultation with the trade union and employees, but the daily extension generally shall not exceed one hour; if such extension is needed for special reasons, under the condition that the health of employees is guaranteed, the extended hours shall not exceed three hours per day. As we can see from this case, the Company arranged extended overtime work for 1.5 hours, which exceeded the statutory standard of 1 hour per day. The court concluded that the Company didn’t provide any proof of its special reason for Mr. Tan working over 1 hour as well as the health guarantee measures provided for Mr. Tan. It can be concluded that the employer had misconducts and subjective false.

c. Is there a causal link under tort law between the employer’s misconduct and the employee’s sudden death?

For the elements of assuming tort liability, not only the misconduct of infringing party, but also a direct causal relationship between misconduct and injuries are required. It is the most difficult part to be proved in demanding the employer to assume tort liabilities.

In this case, the court ruled out the possibility of a criminal offense or murder at first. Though the aggrieved party’s family did not apply for forensic appraisal, the court confirmed the causal link between the sudden death and overtime work. The court concluded that the intensive and frequent overtime work and the unhealthy work schedule might have caused the employee’s death. However, the court clarified in the judgment that the reasons triggering sudden death might be associated with certain factors such as Mr. Tan’s physical condition and his ability to adjust to physical and psychological stress. Such consequence might result from various causes and occur haphazardly. Thus, it cannot be determined that overtime work is the sole reason of sudden death. According to the rule of burden of proof distribution and the principle of fairness and reasonableness, the court finally ruled that the employer assumed 40% of compensation liabilities for the loss caused by Mr. Tan’s death.

In proving a causal link, if there is any palpable factor that weakens the causal link between an act and an injury, the liabilities assumed by the employer might also be affected. In another case of employee’s sudden death, the court found that the employee died suddenly due to heart disease. Before the sudden death he worked overtime intensively, but he did drink alcohol. The specific inducement of his sudden death could not be determined. Both the employer and the employee’s family could not prove the link between the inducement and the participation of fault causing death. Thus, the court determined the employer to assume 15% of fault for liabilities appropriated. In this case, as an extrinsic factor, alcohol consumption intervened and broke the causal relationship between overtime work, which violated the statutory standard, and the sudden death of the employee. The percentage of fault for liabilities assumed by the employer had declined accordingly. We can infer from these cases that proving the relation between the employer’s tortious act and the injury is still an important but difficult factor for allocating liabilities.

d. What shall the employer pay to the employee’s family?

If an employer is found to be liable under tort law, its compensation payable to the victim’s family includes two parts – direct loss and indirect loss. According to the relevant articles of the Interpretation of the Supreme People’s Court of Some Issues concerning the Application of Law for the Trial of Cases on Compensation for Personal Injury, the employer shall bear the expenses, including the compensation for death, the funeral expenses and the necessary expenses paid by the victim’s family, such as traffic expenses, accommodation expenses, appraisal costs and so forth. If the employee has dependents in need of his maintenance and upbringing, the employer shall pay the living expenses of such dependents. Additionally, because the employer commits a tortious act, the aggrieved party can demand a certain amount of compensation for psychological injuries. The specific amount of compensation is determined by courts in pursuant to the extent of the employer’s fault.

Local regulations in some areas (e.g., Guangdong province) provide that in the case of an employee’s death from disease or a non-work-related injury, the employer shall pay a certain amount of funeral grant, remedies and pensions according to the standards of the local regulations. Enterprises shall also pay relevant expenses to the employee’s surviving dependents. This act of employer can meet the legal standard. More importantly, it shows the employer’s care, which is conductive to alleviating the tension between employee and employer as well as the relatives’ emotions.

D. Conclusion and Advice

Though the academia criticize current “working hours & workplace + 48 hours” standard to be deemed as work-related injury, it cannot provide remedies to a karoshi employee’s family through work-related injury insurance in the present statutory frame. It does not mean that the employer can be relieved from legal liabilities. Employers could also bear different extent of tort liability according to the evidence presented in labor arbitration or litigation.

It is advised that employers shall formulate reasonable overtime work policy in daily work, and shall pay attention to the employees’ physical and psychological conditions to avoid occurrences of karoshi tragedy.