Extending the Reach of the Chinese Labor Law: How Does the Supreme People's Court's 2006 Interpretation Transform Labor Dispute Resolution?

By Monnin, Jill E. | Pacific Rim Law & Policy Journal, June 2007 | Go to article overview
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Extending the Reach of the Chinese Labor Law: How Does the Supreme People's Court's 2006 Interpretation Transform Labor Dispute Resolution?


Monnin, Jill E., Pacific Rim Law & Policy Journal


Abstract: Chinese workers are taking advantage of the dispute resolution tools that legal reform has provided in the past decade, including mediation, arbitration, and litigation. Despite a history of resolving disputes through informal mediation, more and more workers are relying on the new pathways of arbitration and civil suits in local courts. The 1993 Regulations on the Resolution of Enterprise Labor Disputes and the 1994 Labor Law facilitated workers' access to formal legal forums. Then, in 2006, a Supreme People's Court ("SPC") interpretation made a number of important changes to the application of the Labor Law and workers' access to dispute resolution.

The SPC interpretation of the Labor Law expands access to labor dispute resolution by providing a clear standard for determining when labor disputes arise, requiring courts to accept appeals of arbitral decisions involving specific claims, allowing the suspension of the arbitration application period, and permitting certain claims to bypass mandatory arbitration. This Comment argues that the SPC interpretation successfully responds to criticisms of dispute resolution under the Labor Law and will help to ensure that law continues to operate as a tool for China's workers and government. The SPC is likely to continue filling gaps in the law and respond with needed changes in the absence of clear legislative rules. Only the future will tell whether the potential impact of the 2006 interpretation becomes a reality.

I. introduction

China's dramatic economic development since the country's "opening up" in the 1980s brought about important legal changes. As national and international companies turn to China's abundant and cheap labor force to produce and manufacture an entire range of goods, Chinese labor law is undergoing a dynamic rebirth and development. The 1994 Labor Law ("Labor Law"),1 based on provisions of the 1993 Regulations on the Resolution of Enterprise Labor Disputes ("Labor Regulations"),2 is the foundation for labor rights and relationships in China. Beyond coverage of wages, healthcare, insurance, and working hours, the Labor Law also provides for labor dispute resolution.3 This resolution process is at the center of an important shift in Chinese dispute resolution away from forms of mediation towards more adversarial arbitration and litigation offered under the Labor Law.4 The past decade witnessed remarkable increases in the use of formal arbitration and litigation for labor disputes.5 Workers are bringing their grievances through the formal resolution process in greater numbers every year with important implications for China's labor policy.

Impressive statistics illustrate the shift towards formal labor dispute resolution and highlight the potential that workers see in resolving disputes.6 Yet there are a number of weaknesses in the formal system, including lack of finality in judgments, difficulties with enforcement of arbitral awards, and ambiguities in the Labor Law's provisions. Increases in the number of appeals made from labor arbitration to local courts,7 along with attempts to reformulate labor claims as traditional civil claims,8 seem to be symptoms of these weaknesses.

An Interpretation of the Supreme People's Court ("SPC") on Several Issues Concerning Application of Laws in the Trial of Labor Disputes ("Interpretation")9 is a recent attempt to clarify the labor dispute resolution provisions of the Labor Law. While the impact of the SPC's Interpretation has yet to be seen, it successfully addresses a number of concerns with the efficacy of the formal resolution process.

An analysis of the effects of the Interpretation on labor dispute resolution can help to not only understand how the process may change in the future, but also to appreciate the SPC's increasing role in Chinese legal reforms. For workers and employers who use the process, practitioners who represent them, and others who monitor the many legal and political changes underway in China, a close look at the Interpretation will deepen understanding of the country's developing labor laws.

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