Court Rules No Labor Relationship for Eastern China City Worker Death

In a recent labor dispute, a court in Eastern China City ruled that a deceased construction worker did not have a labor relationship with the company where he was working at the time of his death. The plaintiff, a local liquor company, sought a declaratory judgment that no such relationship existed, arguing the worker was employed by an independent contractor. The court agreed, finding insufficient evidence to establish direct employment between the worker and the company. The case highlights the critical distinction between direct employment and subcontracting arrangements in labor law.

The case involved a liquor company that contracted with a third party, Mr. Liu, to expand its workshop facilities in 2011. Mr. Liu hired several workers, including Mr. Liu Yushun, as construction laborers. On September 28, 2011, Mr. Liu Yushun fell ill while working on the expansion and later died due to respiratory failure and cerebral hemorrhage. Following his death, his family members — Ms. Su, Ms. Zhang, Ms. Liu, and Mr. Liu, who are the mother, wife, daughter, and son of the deceased — filed a claim with the local labor arbitration commission, arguing that Mr. Liu Yushun had a labor relationship with the liquor company. The arbitration commission ruled in favor of the family, prompting the company to sue in civil court for a declaration of no labor relationship.

During the court hearing, the defendants presented two written witness statements, one from a person identified as Ms. Wang and another from Mr. Li. The first statement claimed that the deceased had been working at the liquor company as a construction worker since April 2011, earning a monthly wage of approximately CNY 3,600, and that he fell ill on the job. The second statement indicated that the deceased was seen boarding a company transport vehicle on the morning of his death. The plaintiff challenged the authenticity of these statements and noted that neither witness appeared in court to testify, despite having no valid reason for their absence. The court also reviewed the original engineering contract between the company and Mr. Liu, which clearly defined Mr. Liu as an independent contractor responsible for the expansion work.

The court held that the liquor company’s primary business was the production and sale of liquor, along with transportation of its products and raw materials. The court found that the workshop expansion project was not part of the company’s core business operations. According to relevant law, a labor relationship requires that the worker’s labor forms an integral part of the employer’s business. Since construction work was not within the company’s business scope, and the deceased was hired by Mr. Liu, an independent contractor, no direct labor relationship existed. The court further noted that the defendants’ evidence, namely the two written statements, was unreliable because the witnesses did not testify in court, and the company had raised valid objections to their accuracy.

The legal reasoning in this case turned on the definition of a labor relationship under the Labor Contract Law. The court emphasized that a worker must provide labor that is part of the employer’s normal business operations for a labor relationship to be established. Here, the construction work was a one-off project subcontracted to Mr. Liu, who had no business license or construction qualifications. Even though the deceased worked on the company’s premises, the court found this insufficient to create an employment relationship. The lack of direct supervision, payment, or control by the company over the deceased’s daily work also weighed against finding a labor relationship. The court rejected the defendants’ argument that the subcontract was invalid due to the lack of a company seal and alleged mismanagement, as these issues did not transform the deceased into a direct employee.

This case serves as a practical reminder that businesses may avoid direct employment liability by engaging independent contractors for non-core projects, provided the contractual arrangements are clear and properly documented. However, the outcome may differ if the contractor lacks legal capacity or the company exercises significant control over the worker. The court’s decision underscores the importance of examining the actual working relationship, the nature of the work, and the evidence presented. For workers in similar situations, establishing a direct labor relationship often requires proof of direct hiring, supervision, and payment by the company, not merely working on its premises.

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