Compensation for Non Company-Related Deaths

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Op/Ed Commentary: Chris Devonshire-Ellis

Jun. 1 – With the news that a foreign enterprise in China has reached an out of court settlement of RMB10,000 for a candidate who died during a job interview, the specter of non-employment compensation for accidents or injuries again raises its head.

In the case described, the family of the deceased sued the company for causing death by provoking “undue stress,” and although the claim was thrown out of court, the company decided it was in its best PR interests to provide some money to the deceased’s family. Such actions are not uncommon, and HR managers should be aware of the issues.

The matter falls into a gray area of HR, and while sentiments run high due to the loss of a loved one – often a family breadwinner – HR prudence dictates an employer, although not legally bound to do so, would be wise to provide some form of compensation. Cases we have been called in to mediate or advise on in China include the deaths of employees traveling to work, but out of employment hours, or deaths occurring while traveling on business for the company. There have also been occasional claims against an employer when an employee died on holiday.

Although labor law is relatively silent on the situation concerning accident or death caused during traveling to work, the moral onus is partially on the company to admit some responsibility and to make an ex gratia payment. Depending upon the circumstances, the same may also be true when an employee dies while on vacation, or in out of work hours in incidents completely unrelated to company employment. China’s respect for its proletariat workers runs deep, the country went through a revolution to uphold proletarian rights after all, and employers would be wise not to be caught unawares when such unfortunate incidents occur.

HR managers should discuss a contingency for such eventualities, handle such circumstances with tact and be prepared to lend some sensible financial assistance to those left in need. The political and loss of goodwill fall out from not doing so can create more problems than the financial aspect of making such payments.

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