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Interpretation of Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes
 
  

Time: November 5, 2008

On the morning of December 29, 2007, the 31st session of the 10th National People's Congress (NPC) Standing Committee adopted the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes. Li Yuan, director of Administrative Office of Commission of Legislative Affairs of the Standing Committee of the National People's Congress, explained at the succeeding news release conference that great efforts have been made to provide mechanism for timely and legally handling of labor disputes.


Li Yuan said that the
Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes is the third law, in relation to the labor, adopted by the Standing Committee of the National People's Congress in the year, together with the Labor Contract Law adopted in June and Employment Promotion Law adopted in August. The three laws have perfected Chinese legal system of labor.


According to Li Yuan, there are some major problems of labor dispute at present: first, short time
limitation of prosecution, long handling period, and high cost of right-safeguarding; second, some employing units deliberately put off the resolution of labor dispute by taking advantage of current procedure of handling disputes, which damage the legitimate interests of laborers and bring about the intensification of social contradiction. Aiming at solving these problems, the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes has made specific provisions:

Firstly, mediation reinforced: It prescribes that mediation is a basic principle of handling labor disputes, encouraging current various labor mediation organs to take part in handling labor disputes, for instance, enterprise labor dispute mediation commission, basic-level people's mediation organizations established in accordance with the law, institutions with labor dispute mediation function established in towns and villages and districts so as to deal with the contradiction and disputes at the very beginning for a stable and harmonious labor relation;

Secondly, time limitation of prosecution prolonged: The time limitation of prosecution prescribed in the Labor Law was within 60 days from the date when the dispute occurred. The original purpose for legislation was to handle labor disputes as soon as possible. But in practice, it is not good to protect the legal interests of laborers if the time limitation is too short. So the present Law prescribes that the time limitation period for application for arbitration of a labor dispute shall be one year and that the time limitation period for arbitration shall be counted as of the date when the person concerned knows or should know that his/her right has been violated. It also prescribes the time of the interruption and suspension of the time limitation. It makes a special prescription for time limitation for disputes over the recovery of labor remunerations. Where a dispute arises from the delayed payment of labor remunerations during the period of existence of a labor relationship, an employee’s application for arbitration shall not be subject to the time limitation period for arbitration. But if a labor relationship is terminated, an employee shall apply for arbitration within one year as of the date of termination of the labor relationship;

Thirdly, the short period for arbitration: Presently arbitral tribunal shall render an award for each labor dispute case within 74 days as of the date when an application for arbitration is accepted. With the approval, extension may be made, but the period after extension shall not exceed 104 days. According to the provision of Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes, the whole period for arbitration is 50 days. The arbitral tribunal shall render an award for each labor dispute case within 45 days as of the date when an application for arbitration is accepted, plus five days of accepting an application for arbitration. Where a case requires an extension of the above prescribed period of time, extension may be made, but the period after extension shall not exceed 60 days. The period is almost shortened by half;

Fourthly, finality of an arbitral award on labor disputes: Some cases don’t have to go through the whole procedure of labor disputes, thus the case with a final arbitral award is not needed to bring an action in the court. It greatly reduces the handling period of most cases with low amount, bald facts and clear national standard; and

Finally, no fees charged for the labor dispute arbitration: The fund of a labor dispute arbitration commission shall be secured by the finance authority, thus greatly reducing the cost for right-safeguarding of laborers.

Li Yuan said that with the intensified awareness of rights safeguarding of laborers after the Labor Contract Law comes into effect, more labor disputes will be brought forth if the employment units broke the law. He believed that it could prevent large numbers of cases from emerging based on the present principle of timely, fairly handling disputes after the promulgation of the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes.

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