Labour Dispute

China’s top legislature started to read the draft law on labor dispute mediation and arbitration amid an increasing number of labor disputes that emerged in the country. The draft law was submitted Sunday to the seven-day 29th session of the Standing Committee of the National People’s Congress (NPC), or China’s top legislature, for the first reading. Arbitration in labor dispute cases will be important because in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.

Xin Chunying, vice Chairman of the Legislative Affairs Commission of the NPC Standing Committee said on the legislative session that excepting the increasing number of labor disputes, other problems also exist. For instance, the personnel in arbitration organizations are not professional and thus lack credibility and the process of arbitrating labor disputes is long, making the cost of arbitration high.

China resumed the labor dispute arbitration system in 1987 and formed the procedures for coping with labor disputes as “mediation, arbitration and trial” after the regulation on handling corporate labor dispute and Labor Law were promulgated in 1993 and 1994. The procedure and practice for dealing with labor disputes have been widely accepted by the public.

The draft bill is for strengthening mediation and improving arbitration so as to help fairly solve labor disputes without going to court and thus safeguard employee’s legitimate rights and promote social harmony. The draft bill said corporate itself is entitled to establish labor mediation committee to solve the labor disputes occurred in its own corporate so as to solve disputes at grassroots level. The corporate labor mediation committee should consist of employees and representatives of managerial level. When labor disputes occur, litigants can turn to the corporate mediation committee, or grassroots people’s labor disputes mediation organization, the draft bill said.

The draft bill said labor disputes concerning pay, medical fee of job-related injuries, compensation, pension whose relevant sum do not exceed 12 months of local minimum monthly wages could be solved by arbitration. The arbitration documents have legal effects upon being handed out. Labor disputes on working time, holidays, social insurance and collective contracts could also be solved by arbitration with legal effects, said the draft bill.

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