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. | Washington International Law Journal, June 1, 2007 | Go to article overview

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., Washington International Law Journal


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.

This Comment examines the provisions of the Interpretation, its relationship to criticisms of labor dispute resolution, and its implications for the SPC's role in influencing labor policy in a socialist market economy. It argues that the Interpretation successfully responds to a number of concerns with labor dispute resolution and is likely to increase the number and effectiveness of labor disputes. Part II provides background and context for the increasing use of labor dispute resolution in China and the SPC's traditionally limited role in legal interpretation. Part III introduces the contours of the recent Interpretation and analyzes the ways in which it successfully responds to criticisms of Chinese labor dispute resolution. Part IV then argues that the SPC's approach to labor disputes exemplifies the growing role of the court in interpreting law to fill legislative gaps. Though the SPC is an organ of the Communist government, the Interpretation is evidence that the SPC is expanding its interpretive role, much like courts in other parts of the world.

II. THE INTERPRETATION CONTINUES THE HISTORICAL DEVELOPMENT AND USE OF THE LABOR DISPUTE RESOLUTION PROCESS

Recent economic development in China and the formulation of the Labor Law provide context to understand the implications of the SPC Interpretation. Laws and regulations now define Chinese labor dispute resolution, creating a process that continues to draw attention as more and more workers rely on the law. …

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