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Regulations Governing the Settlement of Labor Disputes in Enterprises in the People's Republic of China - 1993

(Adopted at the Fifth Regular Session of the State Council on June 11, 1993, and promulgated by Decree No 117 of the State Council of the People's Republic of China)



Chapter I General Provisions
Chapter II
Enterprise Mediation
Chapter III
Chapter IV
Chapter V
Supplementary Principles


Chapter I General Provisions


Article 1
These regulations are formulated for the purpose of properly settling labor disputes in enterprises, safeguarding the legitimate rights and interests of enterprises and employees, maintaining normal production and market order, developing a genial labor relationship and promoting smooth development of reform and opening up to the outside world.

Article 2
These regulations apply to the following labor disputes occurring between enterprises and employees within the jurisdiction of the People's Republic of China:

(1) disputes arising from enterprises laying off, dismissing or terminating contract with employees, and/or from employees resigning or leaving job on their own accord;

(2) disputes arising in the course of implementing State regulations relating to wage, insurance, welfare, on-job training and labor protection;

(3) disputes arising during fulfilling labor contracts;

(4) other labor disputes which, according to stipulated legal provisions, should be settled in line with these regulations.

Article 3
Enterprises and employees are the relevant parties in cases of labor dispute.

Article 4
Following principles shall be observed in settling labor disputes:

(1) to seek an early settlement through mediation;

(2) to settle disputes on the basis of fact-finding and according to law; and

(3) that all relevant parties are equal before law.

Article 5
When a group of employees, involved as one party and holding the same claim in a labor dispute, comprise more than three persons, they should elect a representative to attend the mediation or arbitration activities.

Article 6
The relevant parties should seek to solve their labor dispute through consultation. When such consultation has failed or been turned down, the parties can apply to an enterprise labor dispute mediation committee for mediation; and when the mediation has also failed, the parties can apply to the labor dispute arbitration committee for arbitration. The parties involved can also apply to the labor dispute arbitration committee for arbitration from the very beginning. The relevant parties, when failing to agreeing to the arbitration award, can file a lawsuit on the case to the relevant People's Court.

In the course of settling labor disputes, the parties involved should refrain from taking any move that intensifies the existing dispute.



Chapter II Enterprise Mediation


Article 7
Enterprises can establish labor dispute mediation committee (hereinafter referred to as mediation committee). Mediation committees shall be responsible for mediating labor disputes within their own enterprises. A labor dispute mediation committee is composed of the following personnel:

(1) employee representatives

(2) enterprise representatives

(3) trade union representatives

Employee representatives are elected by the congress of employees representatives (hereinafter referred to as the employees' congress); Enterprise representatives are appointed by the enterprise's director (or manager); and the trade union representatives are appointed by the enterprise's trade union committee.

The specific size of a mediation committee shall be put forward by the congress of employee delegates, and decided after consultation with the enterprise's director (or manager). The number of enterprise representatives shall not surpass one third of the mediation committee members.

Article 8
The mediation committee's trade union representative shall serve as the committee chairman.

The mediation committee office shall be set up within the enterprise trade union committee.

Article 9
Where the enterprise does not have a trade union, the establishment and organization of a mediation committee shall be decided after consolation between employee representatives and enterprise representatives.

Article 10
The mediation of labor dispute by the mediation committee shall conclude within 30 days from the date when the application for mediation by the parties involved is received. Where mediation can not conclude within the prescribed time, it shall be considered as to have failed.

Article 11
Mediation committee, while mediating labor disputes, shall abide by the principle that both parties involved have voluntarily applied for mediation. Once an agreement is reached through mediation, a mediation agreement paper shall be drafted and both parties involved shall implement the agreement. Where mediation fails, the parties involved can, within a prescribed period, apply to labor dispute arbitration committee for arbitration.



Chapter III Arbitration


Article 12
County, city and district directly under the administration of a municipal government shall establish a labor dispute arbitration committee (hereinafter referred to as arbitration committee).

Article 13
Arbitration committee is composed of the following personnel:

(1) representatives of labor administrative department;

(2) trade union representatives;

(3) representatives of comprehensive economic management departments as designated by the government.

Arbitration committee members shall be in odd number, and the position of the committee director shall be taken up by the chief of the labor administrative department.

The labor dispute settlement organization of labor administrative department can serve as the arbitration committee's administrator responsible for handling the routine work of arbitration committee.

Arbitration committee follows the voting principle that minority is subordinate to majority.

Article 14
Arbitration committee, handling labor dispute cases, operates through a system of arbitrators and arbitration chambers.

Article 15
Arbitration committee can enlist the personnel of labor administrative departments or other relevant government departments, trade union workers, specialists and scholars, and lawyers to serve as full-time or part-time arbitrators.

Part-time arbitrators enjoy equal rights with full-time arbitrators in the course of arbitration.

Part-time arbitrators, involved in arbitration activities, shall be given support by their working units.

Article 16
Arbitration committee shall settle labor disputes through arbitration chamber. Arbitration chamber is composed of three arbitrators.

Handling simple labor disputes, arbitration committee can appoint one arbitrator to deal with the cases.

Handling important or difficult labor disputes, arbitration chamber can hand in the cases to arbitration committee for deliberation and decision. Arbitration chamber must implement the decision made by arbitration committee.

Article 17
Arbitration committees of county, city and districts directly under the administration of municipal governments are responsible for the labor disputes arising within their jurisdiction.

The jurisdiction of arbitration committees of the cities divided into districts, and of the districts directly under the administration of municipal government, shall be defined by the governments of provinces and autonomous regions.

Article 18
Where the enterprise and the employee, involved in a labor dispute, are located within the jurisdiction of different arbitration committees, the dispute should be handled by the arbitration committee whose jurisdiction covers the location of payroll and archives of the employees involved.

Article 19
The parties involved can engage one or two lawyers or other representatives to assist them in the arbitration activity. While entrusting others to assist them in the arbitration, a "power-of-attorney" signed or sealed by the entruster shall be handed in to the arbitration committee. The "power-of-attorney" shall make clear specification of delegated power and responsibilities.

Article 20
The employees, who have only limited or no active ability, or who have passed away, can be represented by their legitimate deputies in the arbitration; and where they do not have such legitimate representatives, the arbitration committee shall appoint a representative for them to take part in the arbitration.

Article 21
The parties involved in a labor dispute may seek to reconcile their dispute.

Article 22
The third party, whose interests are closely related with the result of settlement of a labor dispute, can apply to participate in the arbitration, or be asked by the arbitration committee to take part in the arbitration activity.

Article 23
The parties, seeking arbitration of a labor dispute, shall apply in writing to the arbitration committee within six months from the date the parties know or should know that their rights are encroached upon.

When the parties involved in a labor dispute apply for arbitration at a date later than the above-stipulated deadline, because of enforceable or other justifiable reasons, the arbitration committee should accept their application.

Article 24
When the parties involved in a labor dispute apply for arbitration, they should submit to arbitration committee written appeals and copies of such appeals as required by the arbitration committee. The appeals shall contain the following items:

(1) Name, occupation, address and work unit of the employee; name and address of the enterprise; and name and position of the enterprise's legal representative;

(2) Arbitration request and the relevant facts and arguments involved in the dispute; and

(3) Testimony, name and address of the witness

Article 25
Arbitration committee shall make the decision whether or not to accept the case within seven days from the date it receives the appeals for arbitration. Where arbitration committee decides to hear the case, it shall send a copy of the appeal to the appellee and form an arbitration chamber within seven days from the date it makes the decision. Where it decides not to hear the case, the committee shall explain why.

The appellee shall submit a written response along with relevant testimony to the arbitration committee within 15 days from the date it receives the copy of appeal. Whether or not the appellee submits a written response to the arbitration committee within the specified time limit will not affect arbitration of the case.

The Arbitration committee has the rights to demand the parties involved to supply or replenish the necessary testimony.

Article 26
The arbitration committee shall send to the parties involved a written notice on the arbitration's opening time and address, four days prior to the opening of the arbitration chamber. When the parties involved, after having received the notice, refuse appearance at the chamber for no justifiable reason or leave a chamber session without approval, the arbitration committee shall consider the appeallee or appellant involved as withdrawing their appeal, or give an arbitration award by default.

Article 27
The arbitration committee, handling labor disputes, shall first try to mediate, and encourage the parties involved to agree on a settlement on the basis of verified facts. However, the content of such settlement should not violate existing law and regulations.

Article 28
Once an agreement is reached through mediation, the arbitration committee shall issue a mediation report according to the mediation results. The report will be legally binding from the date it was issued. When the mediation has failed or one of the parties involved goes back on its word, the arbitration committee shall give an arbitration award.

Article 29
Arbitration chamber, while giving an award to labor disputes, shall observe the voting principle that the minority is subordinate to the majority. Different opinions should, however, be written for record.

Once the arbitration chamber makes an award, an arbitration paper shall be issued and sent to the parties involved.

Article 30
If one party involved in the labor dispute disagrees with the arbitration award, it can initiate legal proceedings with a people's court within 15 days from the date it receives the arbitration award paper; If it fails to appeal within the period specified, the arbitration award paper becomes effective.

Article 31
The parties involved in a labor dispute shall implement the legally-binding mediation report and arbitration paper promptly in line with the time set forth thereby. Once a party fails to comply with the report or paper, the other party may apply to the people's court for enforcement by law.

Article 32
An arbitration chamber formed to handle a labor dispute shall be terminated within 60 days from the date it was formed. Where the case is so complicated as to demand an extension of the arbitration chamber's activity, such an extension may be made upon the approval of the arbitration committee. However, the length of extension shall not exceed 30 days.

Article 33
The arbitration committee, in the course of settling labor disputes, has the power to review such archives, data and materials which are related with the case and are kept by relevant work units. It has the power to question the person who knows the case. And the relevant work unit or individuals should co-operate with the arbitration committee in the effort.

One arbitration committee can entrust another one to make the necessary investigation.

The arbitration committee as well as its staff shall keep secret such confidential information and personal privacy found out in the course of investigation.

Article 34
The parties involved in a labor dispute, while applying for arbitration, shall pay arbitration fees in accordance with relevant State regulations.

Arbitration fees include case accepting fee and hearing fee. The rates and forms of such fees shall be prescribed by the State Council labor administrative department, together with State Council finance administrative department and State Council pricing administrative department.

Article 35
When any member of the arbitration committee or any arbitrator is involved in one of the following conditions, he or she should refrain from handling the case in question. And the parties involved in the case have the rights to demand, orally or in writing, that such person stay away from the arbitration process:

(1) that he or she is personally involved in the labor dispute case, or is a relative of the parties involved in the case;

(2) that he or she has close personal interest in the labor dispute;

(3) that he or she is related with the parties involved in the case in such a way that may affect its fair arbitration.

Article 36
The arbitration committee shall make timely decision on an application urging for the absence of one of its members or arbitrators in the handling of a case. It shall notify the parties involved in the labor dispute of its decision orally or in writing.



Chapter IV Penalties


Article 37
If any party involved in a labor dispute and other relevant person was found to have committed one of the following misdeeds, the labor arbitration committee can criticize and educate them, and order them to make correction. Those who were found to have committed serious mistakes shall be dealt with according to the Public Security Penalty Regulations of the People's Republic of China; and those who were found to have committed crimes shall be dealt with according to the Criminal Law:

(1) sabotaging mediation and arbitration activity, or obstructing arbitration workers from performing their duty;

(2) providing false testimony;

(3) refusing to provide relevant documents, data and other materials that may be used as testimony;

(4) taking retaliatory action against arbitration workers, arbitration participants, witnesses and others who have helped implementing an arbitration award.

Article 38
If an arbitration worker, in the course of performing official duty, defrauds for personal gain, takes bribe, abuses power, discloses secret information or violates personal privacy, the work unit or the superior department shall give the violator administrative penalty. If the violator is an arbitrator, he or she should be dismissed from the arbitration committee. Those who were found to have committed crime shall be dealt with according to the Criminal Law.



Chapter V Supplementary Principles


Article 39
Labor disputes arising between a government department, institution, or social organization and their employees, and between an individual proprietor and its apprentice and assistant, shall be solved with reference to these regulations.

Article 40
The organizing and dispute handling guidelines of the arbitration committee shall be decided by the State Council labor administrative department together with other relevant departments.

Article 41
The people's government of province, autonomous region and centrally-governed municipality can decide their own specific rules of implementation in accordance with these regulations.

Article 42
The State Council labor administrative department is responsible for the interpretation of these regulation.

Article 43
These regulations come into effect as of August 1, 1993. The Provisional Regulations of Settling State-owned Enterprises Labor Disputes, promulgated by the State Council on July 31, 1987, should be abolished on the same day, when these regulations become effective.

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