Five elderly sanitation workers who are demanding compensation [2] for wages in arrears and years of unpaid overtime, social insurance contributions and other allowances have been told they are not eligible for compensation because they have already exceeded the statutory retirement age.

The Chancheng Labour Dispute Arbitration Committee in the southern city of Foshan ruled on 3 June that, while ten younger co-workers should get 20,000 yuan each in compensation, the five elderly workers would not get a cent [3] because they no longer had a legal “employment relationship” (劳动关系) with their employer.

The committee decided (on the basis of a June 2012 Guangdong High Court ruling on labour dispute cases) that once a worker reaches the statutory retirement age, they should be treated as a “service provider” (劳务关系) and not as a formal employee. And as such, they are not entitled to the benefits formal employees receive.

In the case of 66-year-old Wei Shouyun, who had been working for the same Foshan sanitation company since 2001, the committee ruled that his labour relationship was effectively terminated six years ago on 1 January 2007. Moreover, the time limit for filing an arbitration complaint had already expired.

The aggrieved workers are appealing the ruling. “We think the ruling that these five workers do not have an employment relationship because they have passed the retirement age is both unreasonable and contrary to law,” the workers’ lawyer Luo Yanfei told the Southern Metropolis Daily.

Luo argued that a basic precondition for being considered a “service provider” is that the worker already receives a pension and social security benefits. If, like these five elderly workers, they did not get a pension, they must therefore still be considered as formal employees.

Luo’s argument is backed up by Article 44 of the Labour Contract Law which states that employment contracts shall be terminated when: “the worker starts to receive an old-age pension.”

However, the issue is complicated by the State Council’s Implementing Regulations for the Labour Contract Law, which states in Article 21 that “when a worker reaches the legal retirement age, their employment contract ends.”

The Foshan sanitation workers’ case highlights the complexity and contradictions of China’s labour law but also the highly vulnerable position millions of elderly workers find themselves in today. Just like Wei Shouyun, millions of migrant workers do not have social insurance or a pension and, as such, they have to carry on working after reaching the statutory retirement age just in order to make ends meet.

For more details, see the section on elderly workers in CLB’s study of Employment in China [4].