I stumbled across a recent article which discussed the deteriorating relationship between the employer and employee in China. Employment or Labor disputes are a common sight now and you will find reports of workers putting up with a strike against their employers in Beijing and Shanghai. The article also informs about some of the complaints lodged against the employer who was found mistreating a foreign executive visitor by confining him within the walls of the hotel and how a production manager was locked inside his own factory.
China has already set up a regulatory body and dispute resolution system to handle the employment disputes. Employment Dispute Law has been effective since 1993 and a four stage framework system was set up to resolve matters between the employee and employers. Disputes arising during the course of work are usually settled through consultation and if this fails, the case is then taken to a mediator or arbitrator. If the agreement is not drawn through them, then the dispute can be resolved on the level of court. Each procedure is discussed below:
Consultation
The disputing parties are often expected to sit together and consult with each other and resolve their differences without involving the third party. The Employment Dispute Law (EDL) states that although consultation is not a legal requirement, but if the employment contract states the clause of consultation then it is advisable to talk with each other and come to an understanding.
Mediation
When consultation fails to resolve issues, the parties can move forward to mediation. According to EDL, mediation can occur internally, but if the dispute remains still unresolved then, qualified external mediation organization can be involved. The mediation committee often includes representatives of employees who are often selected by the labor unions and the representative of company management. However, it should be noted that once the case goes to mediation organization, both parties have to honor the mediation agreement.
Arbitration
Labor Dispute Mediation and Arbitration Law 2008 states that if the mediation committee fails to resolve the dispute, then the dispute can be submitted to arbitration commission at the local, county or municipal level. Each party can now hire a lawyer who will represent them in formal arbitration hearings. The appointed arbitrator must try his best to solve the difference and if the parties agree to settle their dispute, a settlement agreement must be drawn. However, if the arbitration tribunal fails to settle the dispute and one of the parties challenge the settlement agreement, then the case must be preceded to hearing in Court.
Court Proceedings
It is often observed that one of the parties is found to be discontent with the arbitral award and refuse to accept the settlement agreement. In that case, the dissatisfied party is allowed by the EDL to file a lawsuit within the 15 days of an arbitral award to the People’s Court. The court will review the evidences and the employment law terms and may refuse to recognize the award on the basis of insufficient evidence. Thus, the court will resolve the matter by giving a verdict which the parties will be bound to abide.
China’s Employment Dispute Laws clearly set a framework to resolve disputes and make sure no one’s rights are violated under any circumstances. The Labor Dispute Law will prevent small confrontation to escalate and turn into full blown crisis, which can hamper the workings of the industry.