Ms. Chang was an employee sent by her company to a shopping emporium. Unfortunately, one day she fell and was seriously injured. The complicated legal relationships make it confusing to recognize Ms. Chang’s injury as a work-related injury. This case is related to whether her original unit (Company A), Company B or the Super Emporium should be liable for Ms. Chang’s injury and the related damages.

I. Case Playback

Ms. Chang, after being laid off, was not able to find a steady job and occasionally did some odd-jobs in some units. Afterwards, she was recommended to work as a counter sales promoter in Company A. The company verbally explained to Ms. Chang the accounting methods and the content of her job and dispatched her to the Super Emporium. Neither party signed a written labor contract.
Ms. Chang went to work in the Super Emporium and soon became familiar with another counter sales promoter named Ms. Li stationed nearby. They struck up a friendship rapidly, they helped each other and the work progressed very smoothly. Everything was going well. However, one day, the goods on the shelf near Ms. Li fell off the back of the shelf at Ms. Chang’s station. Ms. Li asked Ms. Chang to help her to pick them up. The well-meaning Ms. Chang, aware that the counter sales promoter must pay if the goods are lost, jumped to the back of her shelf to pick up the goods. Unexpectedly, there was a big hole in the floor behind the shelf. Ms. Chang, losing her balance, fell into a hole that dropped from the second floor to the ground floor. She suffered a spinal bone fracture which resulted in her being paralyzed and ordered to stay in bed.
Afterwards, Ms. Chang heard from the manager of the Super Emporium that Ms. Li had intended to pick the goods up, but she was stopped by the manager of the Super Emporium who told her about the hole behind the shelf. However, neither Ms. Li nor the Super Emporium told Ms. Chang about the dangerous hole.
As a counter sales promoter dispatched to the Super Emporium by Company A, Ms. Chang contended that, although she had no labor relationship with the Super Emporium, she was managed by this emporium and must abide by the rules and regulations of this Emporium. In other words, her job was not limited to sales promotion for Company A, but included other daily activities needed at this Emporium. Obviously, helping a colleague handle the merchandise during working hours in the place of work should be deemed part of her work duties.
It was the hidden danger at this Emporium that led to her injury. The Emporium was aware of this danger, but failed to fix it in time or post any safety warning. The management did not perform its management obligations. Therefore, the injury should be considered a work-related injury, and she should be treated as an employee with a work-related injury.
The Super Emporium contended that Ms. Chang was a sales promoter dispatched by the production company. Although she was working at the Super Emporium, the counter was rented by Company A. Consequently, the labor relationship was established between Ms. Chang and Company A. It had nothing to do with the Emporium. Furthermore, Ms. Chang jumped to the back of the shelf to pick up the goods, ands this action was beyond her normal work scope. She should be partly liable for the accident. Considering the negligence regarding safety management, however, the Emporium would take on part of her treatment costs.     
Company A contended that Ms. Chang should be primarily liable for her injury because she left her station and helped a worker from the other company which was beyond her scope of work for Company A. Thus, she was acting as an individual and should take individual responsibility. Moreover, the Super Emporium did not perform its management obligations to notify staff and fix the danger. These should be considered the objective factors which caused her injury. Furthermore, Company B, where Ms. Li worked, was the real beneficiary of Ms. Chang’s behavior; that should be considered “unjust enrichment.” Therefore, the Super Emporium and Company B should take on secondary liability for this accident. Company A should take on no liability for the expenses of Ms. Chang’s accident.
Company A, Company B and Ms. Chang all had their respective arguments. Ms. Chang brought forward an arbitration application and appealed to the Court afterward to confirm the work-related injury and appeal for damage compensation.

II. Legal Background

In practice, people used to take it for granted that they should receive work-related injury compensation when injured working for the employer's benefit. However, it is not so simple in reality. The work-related injury system is only applied to these who have established a legitimate labor relationship. Eligible laborers must have established a legal labor relationship with enterprises, individual economic organizations, state organs, public institutions, social organizations or private non-enterprise units. However, any worker in a situation beyond the scope of these types of employers cannot legally be confirmed to have a labor relationship, and consequently, the injury cannot be confirmed as a work-related injury.
 In addition, even if there is a legitimate labor relationship, the work-related injury shall not be confirmed unless certain conditions are met. It might be confirmed as a work-related injury only if the injury occurred during working hours at the place of work caused by a work-related reason, as written in the Work-related Injury Insurance Regulation.
How should an injury incurred during work for the benefit of employer by the remaining workers be handled? Generally speaking, the victim will institute a civil tort lawsuit for personal damages according to the relevant law. Article 11 of the Judicial Interpretation of the Supreme Court on Several Problems of Application of Laws on Case Hearing about Personal Damage Indemnity stipulates that employers shall bear compensation liability for the injury of an employee engaging in work on behalf of the unit; “When a third party outside the labor relationship causes personal damage to the employee, the injured employee may require the third party to bear compensating liability, and they are also entitled to require the employer to take on the liability. After taking on the liability, the employer is entitled to seek damages compensation from the third party.” Article 11, Sub-Article 3 further stipulates: “This Article shall not be applied to labor relationships already regulated by the Work-Related Injury Insurance Regulation or those covered by work-related injury insurance.” It is obvious that the civil legislation seeks to protect the interests of those victims who may not enjoy the benefits of work-related injury insurance.
But after all, personal damage compensation and work-related injuries compensation have some differences. In detail, the differences are as follows：
1. A work-related injury is covered by the labor relationship; while personal civil damages are applied to situations which fall outside the labor relationship.
2. A work-related injury occurs during the course of production, while personal damages may be awarded for injuries occurring in the course of daily life.
3. The work-related injury compensation system has a particular social characteristic. It has been planned as a whole by the society and is paid from a special institutional fund. However, the liability for personal civil damages is totally assumed by the employer. Sometimes, although he or she has won the lawsuit, the victim may get no money.
4. A work-related injury is determined by the non-fault liability principal. As long as the injury meets the criteria of a work-related injury, such as occurring during work hours, in the place of work, caused by a working reason, etc., it shall be recognized as a work-related injury. It does not matter whether the staff is objectively at fault, except in cases of intentional self-injury. Although personal civil damages are also determined by the non-fault liability principal, the liability of the employer shall be reduced if the staff was found to be at fault. Article 2 of the Judicial Interpretation of the Supreme Court on Several Problems of Application of Laws on Case Hearing about Personal Damage Indemnity stipulates: “The compensating liability of the defendant may be alleviated or remitted if the cause or expansion of the damage is due to the victim’s intention or negligence.” It is obvious that the tort liability of the employer may be alleviated or remitted because of employee fault.
5. The standards of damage compensation for labor and civil cases are different; for example, tort liability may include mental damages, but a work-related injury claim cannot.
To sum up, work-related injury insurance and personal tort liability are two very different systems.
 
III. Lawyer Debate

The treatment of the work-related injury should be taken on directly by the employing unit.
Lawyer Yang Yangen from Shanghai Bund law office in support of the laborer

The employing units should be liable for the accident. There was an obvious danger - a large hole behind the shelf - at the Super Emporium. The Super Emporium did not fulfill its notification obligation; therefore, it should assume primary liability. Company A should also take on certain liability. Because Ms. Chang was dispatched to the Super Emporium by Company A, helping Ms. Li to pick up goods which fell into her station should be included in Ms. Chang’s scope of work. Her actions were taken while on duty and the units should assume the liability.
Company A should take responsibility for the payment of the work-related injury compensation. According to the Regulation Number 104 of the Labor Bureau from 1996, the original employing unit should be liable for a work-related injury occurring during the period of labor export, appointment employment or temporary transferal. The case of Ms. Chang, who was dispatched to Super Emporium by Company A, meets the circumstances above. Company A should take on the work-related injury compensation. The Super Emporium failed to perform its maintenance and warning notice obligations, so it should take on secondary liability. As the factual beneficiary of the action, Company B should also take on a certain liability for Ms. Chang’s injury.
 
The accident was a personal action and should be covered as civil tort liability
Lawyer Zhu Hui from Shanghai Fu Xuanjie law office in support of the employer

Ms. Chang’s actions should be considered personal behavior. On one hand, Ms. Chang’s actions went beyond the scope of her arrangement with Company A. On the other hand, it was not part of her work to help Ms. Li when she picked up the goods for Company B. Ms. Chang actions brought benefits to Ms. Li, which should be regarded as “unjust enrichment” of Ms. Li. Thus, Ms. Chang should require Ms. Li to bear tort liability.
This case should be filed as a civil tort liability claim rather than work-related injury compensation claim. Ms. Chang was dispatched to the Super Emporium by Company A, therefore, she had no labor relationship with the Super Emporium or Company B. According to the law on work-related injuries, the laborer is only able to require the employing unit with whom there is a labor relationship to assume the work-related injury liability. Consequently, Ms. Chang had no right to order the Super Emporium or Company B to bear any liability. Furthermore, the liability for a work-related injury not only requires the existence of a labor relationship, but also requires that the injury occurred because of a work-related reason. Ms. Chang went beyond her arrangement with Company A, thus, she has no right to require Company A to be liable for the injury. She should file a lawsuit to ask the Super Emporium for damage compensation for her injury.
In this case, although Ms. Chang had a labor relationship with Company A, her behavior was not for Company A’s benefit, therefore, it does not constitute a work-related injury. Ms. Chang should simply require the Super Emporium to assume liability for the damage.

IV. Final Judgment

   The Labor Dispute Arbitration Committee ruled the following: the Super Emporium shall pay 70% of Ms. Chang’s expenses; Company B shall pay 20% and Company A shall pay 10%.
After the Court trial of this case, the Court ruled that although Ms. Chang had not signed a labor contract with Company A, she was dispatched to the Super Emporium as a counter sales promoter by Company A; they had established a de facto labor relationship. Company A, as the employing unit of Ms. Chang, should be responsible for the work-related injury compensation. Although the Super Emporium and Company B are liable for the accident, they had no labor relationship with Ms. Chang. Therefore, they should not pay the work-related injury compensation directly. Company A, after paying the compensation, shall be entitled to require the Super Emporium and Company B to assume their respective liability. That was going beyond the scope of this case. The Court ruled that Company A shall pay Ms. Chang wages, nursing expenses, dietary allowance, transportation expenses, and medical expenses. The Super Emporium and Company B did not have any direct liability to pay any of Ms. Chang’s expenses. 

V. Expert Evaluation
 
Injury caused at work for a work-related reason should always be considered a work-related injury.
Professor Dong Baohua from East China University of Political Science and Law

 The legal relationships involved in this case are extremely complex, and the dispute lies in the confirmation of the work-related injury. To confirm it as a work-related injury, it must agree with the following two conditions: (1) “one precondition”, that is, the existence of a labor relationship; and (2) “three elements”, that is, accidental injury occurring “during work hours, in the work place and caused by work-related reasons”. In this case, Ms. Chang, as a staff of Company A, was dispatched to do sales promotion in the Super Emporium. In the process of work, she suffered from an injury when going to the back of her shelf to pick up Ms. Li’s merchandise. This accords with the “one precondition” and two of the “three elements,” namely “during work hours in the work place.” Consequently, whether Ms. Chang’s injury can be considered a work-related injury or not rests on the third element; was picking up the merchandise work-related?
     In this case, we may consider the problem this way; if picking up the merchandise is confirmed to be “an action while on duty”, then it should be classified as a work-related reason; if not, it shall not qualify as a work-related reason and there would be no work-related injury. In this case, the nature of picking up the merchandise can be judged according to the following two actions: (1) Ms. Li asked Ms Chang to help pick up the merchandise, and (2) Ms. Chang accepted the request and picked up merchandise. If Ms. Li and Ms. Chang’s conduct were all personal actions, Ms. Chang’s accidental injury shall not be exclusively a work-related injury. If both actions are considered conduct while on duty, Ms. Chang’s accidental injury shall be a work-related injury without doubt. If one action is personal conduct and the other is conduct while on duty, confirmation of a work-related injury depends on the details.    
 Regarding the nature of Ms. Li’s conduct, it is obvious that Ms. Li’s conduct - asking for Ms. Chang’s help - occurred while she was on duty, namely it was an action to save Company B’s property from damage. When the merchandise fell behind Ms. Chang’s shelf, Ms. Li was both aware of and afraid of the dangerous hole behind the shelf. This is the reason she asked Ms. Chang to help her to pick up the fallen goods. Although Ms. Li’s action displayed an element of infringement upon the rights of Ms. Chang, she did it for benefit of Company B. She asked for Ms. Chang’s help as an employee of Company B, therefore, the primary responsible party shall be Company B.
 As for the legal consequences, they shall be distributed based upon the allocation of responsibility to the employer. This can be defined so as the employer shall be liable for the damages to the third party caused by the employee in the process of doing business. The damage was caused by the employee of Company B in order to fulfill her obligations under the command, supervision and management of the employer. Therefore, Company B shall be liable for this damage. Thus, Ms. Li’s conduct shall be considered conduct while on duty. 
 Regarding the nature of Ms. Chang’s conduct, in this case whether Ms. Chang’s helping to pick up the merchandise is conduct while on duty is a matter of debate. Company A contended that Ms. Chang should be individually liable for her injury. She left her station without permission to serve the needs of the other company. That went beyond the scope of her arrangement with Company A.
 But, in my opinion, although it appears there was no arrangement with Company A, Ms. Chang’s actions were taken in order to facilitate her work. Her job was to promote sales, but she was not alone in the Super Emporium. To carry out the work smoothly, she had to obtain the help of others. When going to the washroom, she needed others to step in and take care of the merchandise. When dining, she needed to have collegial arrangements with other employees. These efforts to assist and help each other basically become an integral part of the work of a counter sales promoter. Assuming that Ms. Chang did not get along well with other staff, her work would be more difficult and the company would suffer losses.
 Ms. Chang’s actions supporting the work of her surrounding colleagues evolved out of the nature of sales promotion work, namely the friendly conduct of Company A to help Company B save goods from damage. So, Ms. Chang’s conduct was also conduct while on duty. Under the circumstance that both Ms. Li and Ms. Chang’s actions are conduct while on duty, we may conclude that the accident is a work-related injury because Ms. Chang suffered from the injury while on duty.
Now that it is considered a work-related injury, we come to the issue of how to deal with the compensation. In this case, the Arbitration Committee and the Court gave us two scenarios to consider.
 The Arbitration Committee chose a scheme that many sides would agree on, that is, Super Emporium takes on 70% of all the expenses, Company B takes on 20%, and Company A 10%. In this case, three parties shall be liable for the accident. As for the Super Emporium, the working place had a hidden danger, and the manager did not fulfill his obligation to notify even though he was aware of the problem. It should be liable for the injury. Company B, as Ms. Li’s work unit, is responsible for Ms. Li’s conduct while on duty which was the direct cause of this accident. Moreover, Ms. Li had also known of the hidden danger. Company B should first bear the liability, but then it may force Ms. Li to take responsibility according the rules and regulations of the company. Company A, as the party with the labor relationship with Ms. Chang, should be liable for the injury caused by an employee’s conduct while on duty.
    On the contrary, the Court gives a two-layer resolution scenario. First, the Court contends that Ms. Chang’s injury is a work-related injury and Company A should bear all the responsibility. Second, after paying the compensation, Company A may force Company B and the Super Emporium to compensate Ms. Chang according their respective liabilities.
 In my opinion, the ruling of the Court is correct. According to the law in China, the work-related injury system is a liability distribution system based on the foundation of the labor relationship. The party liable for the work-related injury is the one who has the labor relationship with the laborer, namely Company A in this case. The reason that the law is designed this way is to protect the disadvantaged, to help them obtain timely compensation, and to avoid laborers being bogged down in the trouble of seeking compensation from several different parties.
 This case absolutely proves the following point: all three units escaped their responsibility in the Arbitration Committee ruling which lead them all finally to the Court. In the trial, the judge exquisitely found the logical contradiction of the arbitration ruling and correctly judged Company A to be the liable party. Of course, after paying the compensation to Ms Chang, Company A is still entitled to demand the other two parties compensate for the relevant damages. In this way, the interests of the laborer are adequately protected and, at the same time, attention is given to the employing unit’s right to demand compensation from the parties responsible for the accident.

From LexisNexis