NPC Expands Scope and Increases Sanctions under Amended Work Safety Law

The amended Law of the People’s Republic of China on Work Safety 2014 (“Work Safety Law”) took effect on 1 December 2014. The Work Safety Law applies to all entities engaged in production and business operations in China and signals the Chinese government’s increased attention to hazardous workplaces. “The recent changes in the law, in particular the heavier fines, have been prompted by a public outcry over a spate of recently publicised cases of worker deaths caused by unsafe working conditions” says Jonathan Isaacs of Baker McKenzie. “The government needs to show that they are taking this issue seriously”.

Any business with 100 or more employees, and any business engaged in mining, construction, road transportation, metals smelting, or the production, sales or storage of hazardous substances, must create a distinct administrative body (or designate a full-time employee) to supervise workplace safety, and is prohibited from retaliating against such personnel for acts related to their supervisory role. Businesses must provide training on safe production rules, policies and procedures to dispatched personnel and student interns as well as employees, and maintain accurate records of all training activities. The administrative body or designated employee, management personnel and investors must ensure that the business’s work safety programme is properly funded. The Work Safety Law also calls for the State Council to draft measures related to the use, supervision and control of such funds. Finally, the Work Safety Law imposes significantly larger fines and penalties against businesses and their management personnel for workplace safety violations.

Unsafe Workplaces a Greater Business Risk

Taken together the new rules make unsafe and borderline workplaces into a substantially greater business risk for employers. General Counsel for affected businesses should take the new law as a cue to review their existing workplace safety arrangements in China. The review should include ensuring that safety training is rigorous, mandatory and adequately funded. Qualifying companies should also designate their workplace safety committees or supervisors as soon as practicable.