Court Awards CNY 74,058 in Construction Injury Dispute

A court in Eastern China City has ruled that a construction company must pay damages to a worker who was injured on the job, despite the company’s argument that the worker was employed by an independent contractor. The decision clarified the boundaries of employer liability in cases where work is subcontracted.

The plaintiff, Eastern China Decoration Engineering Company, had hired a third party, Mr. Zhou, to manage a building renovation project under a construction contract dated April 23, 2010. The contract described the arrangement as a processing and contracting relationship and required Mr. Zhou to bring his own tools. On June 1, 2010, the defendant, Mr. He, began work at the site performing exterior wall putty work. The company did not sign a labor contract with Mr. He. On June 15, 2010, Mr. He fell and was injured while working. He was hospitalized and later diagnosed with a work-related injury by the local labor bureau.

During the hearing, the company presented the construction contract and a safety agreement with Mr. Zhou to argue that Mr. He was not its employee. Mr. He submitted the official injury determination, a medical report, and loan records showing he had borrowed 12,400 yuan from the company after the accident. The labor arbitration commission had previously ruled in favor of Mr. He, ordering the company to pay compensation. The company then challenged that decision in court. All parties, including Mr. Zhou, attended the trial.

The court found that despite the contractual language labeling the arrangement as a processing and contracting relationship, the actual working conditions created an employment relationship between the company and Mr. He. The company provided water, electricity, scaffolding, uniforms, and supervised material usage. Mr. Zhou acted only as a site manager, and the company retained overall control. Therefore, under agency principles, the company was the employer. The injury was properly classified as work-related.

The court held that employers bear responsibility for injuries to workers under their control, even when a subcontractor hires them. The legal analysis focused on the Labor Law and the Regulations on Work-Related Injury Insurance. The court noted that neither party had produced clear wage records, so it adopted the provincial average wage as a fair basis. The calculated compensation included wages for the 15 days before injury, hospitalization meals, paid leave during recovery, and several types of disability benefits.

After deducting the 12,400 yuan already advanced to Mr. He, the court ordered the company to pay a net amount of 74,058 yuan. The judgment also confirmed that the labor relationship was terminated as of the arbitration date. This case serves as a reminder that companies cannot avoid liability simply by labeling workers as independent contractors. Courts will examine the actual degree of control and supervision to determine the true employer.

Disclaimer: This article is for informational purposes only and does not constitute legal advice.