Case Information:

Appellant (plaintiff in the original trial): Yang Laiwei

Appellee (defendant in the original trial): Beijing Sanjie International Steel Structure Co., Ltd.

Court: Higher People’s Court of Beijing Municipality

Case Ref.: (2013) Gaominzhongzi No. 3263

Key Facts:

In July 2003, Yang Laiwei (“Employee”) started his employment with Beijing Sanjie International Steel Structure Co., Ltd. (“Company”). On August 23, 2004, the Employee’s was seriously crushed and injured his right leg during work hours. On December 10, 2004, the work-related injury was identified, with 5th grading of injury/disability.

On February 1, 2005, the Company and the Employee signed an Agreement on the Work-related Injury Compensation, and agreed that the Company paid a lump-sum injury/disability allowance (60% of the local average monthly wage * 16 months), a lump-sum employment allowance for disability and lump-sum medical allowance for the work-related injury (local average monthly wage* 30 months), and fees of auxiliary appliance for disability (RMB 4600*10) to the Employee. The agreement also stipulates that the employment relationship as well as the work-related injury relationship would both end upon the payment of the aforementioned compensation.

In July 2013, the Employee brought a lawsuit to the court, alleging that the Agreement on the Work-related Injury Compensation is signed under gross misunderstanding, fraud, coercion and the Company’s taking advantage of his precarious situation, and claiming that the agreement should be held invalid. The Employee also requested the Company to pay him the artificial limb fee and other fees.

The court of the first instance held that injured employee with 5th grading of injury/disability is entitled to: a lump-sum injury or disability allowance, a lump-sum employment allowance for disability and a lump-sum medical allowance for the work-related injury, along with the fees of auxiliary appliance for disability. The Agreement on the Work-related Injury Compensation in dispute has included these items with their amounts meeting corresponding statutory standards. Regarding the injury or disability allowance, the Employee admitted that he did not report the injury after its occurrence, and the Company still paid him salary until the execution of the Agreement. Therefore, it is justifiable that the injury or disability allowance is not included in the agreement. The Agreement is not contrary to any mandatory provisions of law and regulations and should be effective. The Agreement was executed on February 1, 2005 and the Employee applied for arbitration in 2012, which has been beyond the 1-year limitation. The Employee alleges that there is gross misunderstanding, fraud, coercion and the Company’s taking advantage of his precarious situation, however he fails to provide correspondent evidence. Therefore those assertions of facts are not adopted by the court and his claims are dismissed.

The Employee appealed to the Higher People’s Court of Beijing Municipality.

Judgment:

The court of the second instance dismissed the appeal and sustained the original judgment.

Key Points of the Judgment:

Compensation items and their calculating methods adopted in the Agreement on the Work-related Injury Compensation are in line with governing laws or regulations, thus the Agreement should be effective. The Employee asserts that there is gross misunderstanding, fraud, coercion and the Company’s taking advantage of his precarious situation, but he fails to provide correspondent evidence.

KWM Comments: An employer may sign with the injured employee an agreement stipulating the undertaking of work-related injury insurance liability.  If the agreement is entered into with both parties’ true intention and the agreed compensation amount and calculation standard therein is not below the statutory standard, such agreement should be valid, where this judgment of the Higher People’s Court of Beijing Municipality provides a solid reference.