Labour Dispute

Employment Dispute Resolution

Over the past 12 years China has strongly encouraged the use of a formalized arbitration process to resolve, among other conflict areas, labor disputes. Using a formal resolution process is meant to calm labor unrest by giving employees both individual and collective voices in workplace issues. Ultimately, China recognizes that, as did the United States with passage of the National Labor Relations Act, giving employees voice quells potential social revolution and helps business by making use of employee ideas while attracting the best employees.

The parties to a labor dispute are required to resolve the dispute in stages.First, the parties, including the enterprise and the employee, are required to engage in onsultation. If the parties are unable to resolve the matter informally, they are required to apply to the labor dispute mediation committee of the enter prise for voluntary coniliation. Under the labor dispute rules, mediation of a dispute is strongly encouraged. If such efforts fail, the parties may apply to the local labor dispute arbitration commission to initiate an arbitration proceeding. If one party disagrees with the tribunal’s arbitration award, the dispyting party may file a claim in the people’s court. The labor dispyte rules provide that the following matters are subject to the afore-mentioned dispute resolution proedures:
 
 (1)a dispute concerning the dismissal of an employee
 (2)a dispute concerning the resignation or voluntary termination of employment by the employee
 (3)a dispute involving compensation, insurane, welfare, training, or labor protetion
 (4)a dispute concerning the performance or interpretation of a labor contract
 
1.Labor Mediation
 
The labor dispute mediation committee of an enterprise is required to consist of three individuals chosen by and representing the employees, employer, and the trade union. If an enterprise does not have a trade union, the representatives of the employer and the employee have the discretion to either form a two-member committee or appoint an additional person. The mediation committee must complete the conciliation process within 30 days of the date the parties apply. The mediation proccess is based upon consent and voluntary participation, and either party may cease involvement at any time. If an agreement is reached, a written settlement agreement must be prepared and signed by the mediation committee and the parties.
 
2.Labor Arbitration
 
If the parties are unable to mediate a dispute, they may file an application for arbitration with the labor dispute arbitration commission established at the city or county level. A labor arbitration commission consists of representatives of the MOL or other labor authorities, trade union, and the econnomic affairs administrative department designated by the government. In pratice, the MOL or other labor authority is responsible for the administration of arbitration cases.

A party to a labor dispute is required to file a written application for arbitration within six months from the date that the party knew or should have known that there was a violation of rights that triggered the labor dispute. An applicaiton for arbitration is required to speify the names and address of the parties, the legal representatives, the facts and reasoning for the claim, and the names of all potential witnesses. A party to a labor arbitration may be represented by legal counsel. The appliant is also required to submit all supporting douments in favor of its claims. Within seven days of receiving the application, the commission is required to accept or reject the application for arbitration, and thereafter notifies the parties within seven days. The defendant is required to respond to the commission and to file an answer or a statement in defense within fifteen days and include supporting documentation. A failure by the defendant to submit an answer within the prescribed time limit does not affect the proceeding. The commission will appoint the arbitrators to the tribunal, with most cases involving three arbitrators. Individuals that are related to any of the parties or have a personal interest in the labor dispute may not act as arbitrators. Either party may request that a partiular arbitrator withdraw form the tribunal if bias is demonstrated. The tribunal is required to complete the entire arbitration proceeding, including a hearing, within sixty days from the date the tribunal is formed.
 
The commission is required to give the parties at least four days’ notice of the arbitration hearing. By law, the tribunal is required to attempt to resolve a dispute by mediatin prior to the conclusion of the arbitration hearing. If a party fails to attend an arbitration hearing after receiving written notice and fails to attend without a legitimate reason, the party is deemed to be in default and an award may be entered in his or her absence. All personnel information disclosed during the course of a proceeding is confidential and may not be disclosed by the arbitrators or the commission.
 
3.Litigation
 
If a party disagrees with an arbitration tribunal’s award, that party is required to file a complaint with the people’s court within fifteen days of receiving the award notice. If the party fails to institute legal proceedings within the required time, the award becomes final and is not subjet to judicial review. In the event that a party fails to implement either amediation agreement or arbitration award, the injured party may apply to the people’s court for enforcement. The Chinese courts have rarely addressed employment litigation other than cases to confirm of set aside labor arbitration matters. In recent years, Chinese employees have resorted to litigation to redress employment-related claims such as wrongful termination and invasions of privacy.

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