On November 24, 2017, the Ministry of Human Resources and Social Security released the Notice on the Fifth Batch of Declarations of Invalidation and Abolition of Documents (Ren She Bu Fa  No.87). According to the unified deployment of the State Council's document clean-up work, the Ministry of Human Resources and Social Security cleared the regulatory documents related to the reform of the "relief, regulate and service"; some of these documents shall be invalid or annulled due to the fact thate the objective no longer exists, tasks have been completed, the application period has expired, they have been replaced by other regulations, the original legal basis for the documents has been abolished, and etc.; the notice announced the invalidation of 26 documents and the abolition of 76 documents.
The famous Economic Compensation Measures for Breach and Termination of Contracts Procedures (Lao Bu Fa  No. 481, hereinafter referred to as No. 481) is also included in the list of 76 repealed documents in this batch. The reason given by Ministry of Human Resources and Social Security is that it has been "replaced by new regulations". It's not hard to understand that, as a companion document to the Labor Law, No. 481was formally implemented on January 1, 1995, with Labor Law; during its implementation of more than 20 years until the end of 2017 when No. 481 was repealed, many laws and regulations in the field of labor law have come into force, among which the most important one shall be Labor Contract Law implemented on January 1, 2008 - most of the regulations concerning economic compensation in No. 481 have been replaced in practice by the new provisions of the Labor Contract Law. It is no wonder that some lawyers said that "No. 481 should have been repealed long ago."
However, not the entire content of No. 481 has its alternative provision in Labor Contract Law. The most typical is the payment of a medical subsidy. Under what circumstances do employers need to pay for a medical subsidy? What is the standard payment for a medical subsidy? How will the abolition of No.481 affect the payment of medical subsidy?
I.Conditions of Medical Subsidy Payment
The term medical subsidy in the field of labor law originally came from No. 481. Its Article 6 stipulates: "When a laborer falls ill or is injured off duty and the Labor Inspection Committee confirms that he/she is unable to perform his/her original work or other work arranged by the employing work unit, and the labor contract is rescinded, the employing work unit shall pay economic compensation equal to one month's wages for every full year of work, according to term of employment at such work unit, and at the same time shall pay a minimum medical subsidy of 6 months' wages. When a laborer becomes seriously or terminally ill, an additional medical subsidy shall be paid." Clearly, at the beginning of the establishment of the medical subsidy, it was an economic subsidy that was paid by the employment unit when the laborer was discharged due to the expiry of the medical treatment period. Obviously, in accordance with the provisions of No.481 at that time, the employer should pay the laborer medical subsidy when the medical period expired and labor contract rescinded.
Whether the employer should pay the medical subsidy when a laborer falls ill or is injured while off-duty, and the labor contract has been terminated due to its expiration is mentioned in Article 22 of Notice on Several Questions Along Implementation of Labor Contract (Lao Bu Fa  No. 18), "When a laborer falls ill or is injured off duty, and the labor contract terminated due to expiration, the employment unit shall pay a minimum medical subsidy of 6 months' wages". It treats termination of labor contract the same as rescission of labor contract under the condition of the expiration of medical treatment period. On the one hand, it doesn't deal with the two different situations separately, on the other hand, it aggravates the responsibility of the employers to a certain extent. Some districts raised questions about Labor Ministry in practicing this provision. Therefore, the Ministry of Labor issued an interpretation in 1997 specifically for the aforementioned provisions (Lao Ban Fa  No. 18), further clarifying that "when a laborer falls ill or is injured off duty, and the contract terminates upon expiration, the employment unit shall pay a minimum medical subsidy of 6 months' wages" means that when the contract terminates upon expiration, the medical treatment period expires or the laborer is appraised by the Labor Inspection Committee as 5-10 grade upon termination of medical treatment, the employer shall pay a minimum medical subsidy of 6 months' wages. In the event that the laborer has not done the labor ability appraisal, or the laborer's appraisal results show that the laborer has failed to reach the prescribed level, the employer does not have to pay the laborer's medical subsidy when the medical treatment period expires and contract terminates.
Along with the abolition of No. 481 in 2017, does the employer still have the pay the medical subsidy to the workers when their medical treatment period expires? To answer this question, a comprehensive examining on reasons for termination of the labor contract and the conclusion on the evaluation of labor capacity of the worker is needed. In the case of expiry of the medical treatment period and termination of the labor contract, the payment of the medical subsidy is not influenced by the abolition No. 481, since it is not regulated in the No.481, it is stipulated otherwise. As for the case of the rescission of the labor contract after the medical treatment period expires, whether the employer needs to pay the medical subsidy is divided into three steps:
Step one, local regulations. After the implementation of No. 481, some provinces and municipalities have made corresponding provisions in local laws and regulations regarding issues such as the payment of medical subsidies. For instance, Article 44 of Regulations of Shanghai Municipality on the Labor Contract states that an employing unit, if dissolving a labor contract when medical treatment period expires, shall not only make economic compensation for the laborer concerned but also grant medical care subsidies to the laborer of not less than the laborer's six-month wage earnings. Also, in Labor Contract Regulations of Jiangsu Province, Article 34 mentions that where a worker is unable to take up his/her original job position after medical treatment for an illness or a non-work injury, and is also unable to take up the appropriate job position arranged by his/her employer, the employer may rescind or terminate his/her labor contract pursuant to the law and make economic compensation. Where the worker is certified by the labor capacity appraisal committee to have lost labor capacity wholly or partially, the employer shall also pay a medical subsidy of not less than six month's wage to the worker. At this time, if the employee fits the conditions of local regulations, the employer shall pay the medical subsidy in terms of dissolving the labor contract.
Step two, agreements in labor contracts and collective contracts, or provisions in employment rules. Many enterprises will refer to the current provisions of the laws and regulations when drafting labor contract templates and revise their employment rules. If the labor contract, collective contract, and the employment rules - signed by the employee - have some relevant stipulations or provisions stating that the employer must pay the medical subsidy when the medical term expires, the employer shall follow the relevant agreements and regulations and pay the medical subsidy.
Step three, the conclusion on the evaluation of the labor capacity of the worker. Where a worker who sustained a labor capacity is certified grade 5 to 10, the employer shall pay medical subsidy upon expiration of medical term and termination of the labor contract, to make things worse, the employer shall shoulder more responsibility when the labor contract dissolved and exert a greater impact on employees. In addition, other current valid documents released by Labor Ministry, such as Article 36 of Opinions on Implementation of Labor Law of People's Republic of China (Lao Bu Fa  No. 309) states that where laborer be sustained a labor capacity as grade 5 to 10, the employer shall pay medical subsidy upon dissolving the labor contract.
II.Standard Payment of Medial Subsidy
Except for stipulating conditions of medical subsidy payment while rescission, No. 481 also makes it clear on the situation and the standard for additional payment, that is "When a laborer becomes seriously or terminally ill, an additional medical subsidy shall be paid. The minimum additional amount for a serious illness shall be 50% of the medical subsidy. The minimum additional amount for a terminal disease shall be 100% of the medical subsidy." Along with the repeal of No. 481, courts from different districts hold varied opinions on whether additional medical subsidy applicable to serious or terminal illness: Jiangsu court in case (2017) Su 12 Min Zhong No.2401 holds that worker suffering from systemic lupus erythematosus was seriously ill, and supports the request of employee that the employer pay an additional 50% of the medical subsidy according to the standards of serious illness, however, the court in Shanghai (2017) Hu 01 Min Zhong No. 12046 holds against the laborer for no legal basis.
In solving this confliction, on the one hand, further interpretation needs to be provided by relevant departments, on the other hand, we suggest that employers pay 50% to 1000% additional medical subsidy at their discretion to employees who are truly seriously or terminally ill from the perspective of legal risk and humanistic care.
With Ministry of Human Resources and Social Security's announcement at the end of last year, the abolition of No. 481 caused a large wave of discussion in the labor law practice circle. Among extensive explorations, the author found that some local courts did not even support workers' requests for a medical subsidy. The reason was that the economic compensation and medical subsidy stipulated in Economic Compensation Measures for Breach and Termination of Contracts Procedures Article 6 has been covered by the current economic compensation system of the Labor Contract Law and the medical insurance system under the Social Insurance Law. It is understandable that as early as 1995 when the medical subsidy system was born, the social insurance payment system in our country was only implemented for two years. The medical insurance system was still in its initial stage, and the medical subsidy system was timely and effective. However, with the full implementation of the Labor Contract Law in 2008 and the Social Insurance Law in 2011, the payment of social insurance to workers has long become the statutory obligation of the employer. Employers, after paying such a high social security fee, are still required to "pay the bill" again for the laborer's medical expenses. It's worthwhile to consider whether this requirement is still reasonable.
After the topic fever cooled down, it's not hard to discover that the abolition of article 481 is far less stunting than one might imagine in practice. As the Beijing Labor Arbitration in January 17, 2018 issued the Opinions on Several Issues upon the Repeal of Economic Compensation Measures for Breach and Termination of Contracts Procedures (Lao Bu Fa  No. 481) states that "practice shall be as before"-- this is also the suggestion that we offer to employers regarding the medical subsidy payment issue at this current stage.