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

(Adopted at the 31st Session of the Standing Committee of the 10th National People's Congress on December 29, 2007)

Chapter I: General Provisions

Article 1 The Law is formulated in order to fairly and timely resolve labor disputes, protect the lawful rights and interests of the parties and promote harmonious and stable labor relations.

Article 2 The Law shall apply to the following labor disputes between employing units and laborers within the territory of the People's Republic of China:

1. disputes arising from the confirmation of labor relations;
2. disputes arising from the conclusion, performance, alteration and termination of labor contracts;
3. disputes arising from name removal, dismissal, resignation or vacation of office;
4. disputes arising from working hours, rest days and leave days, social insurance, fringe benefits, training and labor protection;
5. disputes arising from labor remunerations, work injury medical expenses, economic compensation or damages; or
6. other labor disputes prescribed by laws and regulations.

Article 3 The resolution of labor disputes shall be based on facts and follow the principles of lawfulness, fairness, timeliness and mediation-oriented to protect the lawful rights and interests of the parties.

Article 4 Where a labor dispute arises, a laborer may have a consultation with the employing unit or request the labor union or a third party to have a consultation with the employing unit in order to reach a settlement agreement.

Article 5 Where a labor dispute arises, the parties are not willing to have a consultation, the consultation fails or the settlement agreement is reached but not performed, an application for mediation may be made to an mediation institute. Where the parties are not willing to mediate, the mediation fails or the mediation agreement is reached but not performed, an application for arbitration may be made to the labor dispute arbitration commission. Where there is objection to the arbitral award, litigation may be initiated to a people's court unless otherwise specified herein.

Article 6 Where a labor dispute arises, the parties have the responsibility to give evidence for their own claim. Where the evidence relevant to the dispute matter is handled and managed by the employing unit, the employing unit shall give such evidence. Where the employing unit does not give evidence, it shall assume any unfavorable consequences.

Article 7 Where the party in a labor dispute consists of more than 10 laborers, and they have a joint request, they may recommend a representative to participate in mediation, arbitration or litigation activities.

Article 8 The labor administrative department of people's governments at the county level or above together with labor unions and enterprise representatives shall establish a labor relation tripartite mechanism to jointly study and resolve major issues of labor disputes.

Article 9 Where an employing unit violates state provisions and labor remunerations are in arrears or not paid in full, or work injury medical expenses, economic compensation or damages are in arrears, the laborer may make a complaint to the labor administrative department which shall handle the matter in accordance with the law.

Chapter II: Mediation

Article 10 Where a labor dispute arises, the parties may apply for mediation to the following mediation institutes:

1. Enterprise labor dispute mediation commission;
2. Basic-level people's mediation institutes established in accordance with the law;
3. Institutes with labor dispute mediation function established in towns and villages and districts.

The enterprise labor dispute mediation commission shall comprise employee representatives and enterprise representatives. Employee representatives shall be labor union members or recommended by all employees, and enterprise representatives are designated by the responsible person of enterprise. The officer of the enterprise labor dispute mediation commission shall be a labor union member or a person recommended by both parties.

Article 11 The mediators of labor dispute mediation institutes shall be citizens that are impartial, connected with the mass and passionate about mediation work, and have certain legal knowledge, policy level and cultural level.

Article 12 The parties that apply for labor dispute mediation may submit an application in writing or orally. Where it is an oral application, the mediation institute shall record the basic particulars of the applicant, the matter in dispute that requires mediation, the reason and time on the spot.

Article 13 To mediate labor disputes, the facts and reasons of both parties shall be listened and mediation is conducted with patience to assist in reaching an agreement.

Article 14 Where an agreement is reached after mediation, a mediation agreement shall be prepared.

The mediation agreement shall be signed or sealed by both parties, and signed by the mediator as well as sealed by the mediation institute to take effect. It shall be binding on both parties and both parties shall perform the agreement.

The parties may apply for arbitration in accordance with the law if no mediation agreement is reached within 15 days of the receipt of the mediation application by the labor dispute mediation institute.

Article 15 Where the mediation agreement is reached and either party that fails to perform the mediation agreement within the time limit prescribed in the agreement, the other party may apply for arbitration in accordance with the law.

Article 16 Where the mediation agreement is reached in respect of the payment of labor remunerations, work injury medical expenses, economic compensation or damages in arrears and the employing unit fails to perform the agreement within the time limit prescribed in the agreement, the laborer may apply to the people's court for a payment order in accordance with the law on the strength of the mediation agreement. The people's court shall issue the payment order in accordance with the law.

Chapter III: Arbitration

Section 1 General Provisions

Article 17 Labor dispute arbitration commissions shall be set up pursuant to the principles of coordinated planning, rational layout and meeting actual needs. People's governments of provinces and autonomous regions may decide to set up a labor dispute arbitration commission at the municipal and county levels; people's governments of municipalities directly under the central government may decide to set up a labor dispute arbitration commission at district and county levels; and people's governments of cities specifically designated in the state plan and cities with districts may also establish one or several labor dispute arbitration commissions. Labor dispute arbitration commissions are not set up according to administrative areas level by level.

Article 18 The labor administrative department under the State Council shall formulate arbitration rules in accordance with the provisions hereof. The labor administrative department of people's governments of provinces, autonomous regions and municipalities directly under the central government shall provide guidance to labor dispute arbitration work within the administrative area.

Article 19 Labor dispute arbitration commissions shall comprise the representative of the labor administrative department, labor union representative and enterprise representative. The composition of the labor dispute arbitration commissions shall be an odd number.

Labor dispute arbitration commissions shall perform the following functions and duties in accordance with the law:

1. appointment and dismissal of full-time or part-time arbitrators;
2. acceptance of labor dispute cases;
3. discussion of major or complicated labor dispute cases; and
4. supervision of arbitration activities.

Labor dispute arbitration commissions shall set up offices to handle the day-to-day work of the labor dispute arbitration commissions.

Article 20 Labor dispute arbitration commissions shall have an arbitrator register.

Arbitrators shall be impartial and fulfill any of the following requirements:

1. having served as an adjudicator;
2. engaging in legal research or teaching with a designation of middle level or above;
3. having legal knowledge and engaging in human resources management, labor union work or other professional work for five full years; or
4. having legal practice for three full years.

Article 21 Labor dispute arbitration commissions shall be responsible for the labor disputes occurred in the district under their jurisdiction.

Labor disputes shall be handled by the labor dispute arbitration commission at the place where the labor contract is performed or at the place where the employing unit locates. Where both parties apply for arbitration to the labor dispute arbitration commission at the place where the labor contract is performed or the place where the employing unit locates, the labor dispute shall fall within the jurisdiction of the labor dispute arbitration commission at the place where the labor contract is performed.

Article 22 The laborer in a labor dispute and the employing unit are the parties to labor dispute cases.

Where there is a labor dispute between a labor deployment unit and a laborer, the labor deployment unit and the employing unit are the joint parties.

Article 23 The third party that has an interest in the result of the handling of a labor dispute case may apply for participating in arbitration activities or be notified to participate in arbitration activities by the labor dispute arbitration commission.

Article 24 The parties may appoint an agent to participate in arbitration activities. To appoint an agent to participate in arbitration activities, a power of attorney signed or sealed by the appointer shall be submitted to the labor dispute arbitration commission. The power of attorney shall set out the appointment matter and the authority.

Article 25 A laborer that has lost full or partial civil capability shall participate in arbitration activities by his legal representative. Where there is no legal representative, an agent shall be designated by the labor dispute arbitration commission. Where the laborer has died, his close relative or agent shall participate in arbitration activities.

Article 26 The arbitration of labor disputes shall be conducted openly, unless the parties agree not to conduct openly or state secrets, trade secrets or personal privacy is involved.

Section 2 Application and Acceptance

Article 27 The time limit for application for arbitration in labor disputes is one year. The validity of arbitration shall be calculated from the date the parties know or shall have known the infringement of their rights.

The validity of arbitration as prescribed in the previous paragraph shall be interrupted where either party claims its rights against the other party; or the relevant department requests for the right of relief, or the other party agrees to perform its obligations. The validity of arbitration shall be calculated again from the time of interruption.

Where the parties cannot apply for arbitration within the validity of arbitration as prescribed in Paragraph One of this article due to force majeure or other proper reasons, the validity of arbitration is suspended. The validity of arbitration shall resume following the non-existence of the reason for suspension.

Where a dispute arises within the subsistence of labor relations due to labor remunerations in arrears, the laborer that applies for arbitration shall not be restricted by the validity of arbitration prescribed in Paragraph One of this article. However, where the labor relations are terminated, the application for arbitration shall be submitted within one year of the termination of the labor relations.

Article 28 The applicant that applies for arbitration shall submit a written arbitration application and submit duplicates in accordance with the number of the respondents.

The arbitration application shall set out the following matters:

1. Name, gender, age, occupation, working unit and domicile of the laborer; name and domicile of the employing unit and name and duties of the legal representative or person-in-charge;
2. the request for arbitration and the facts and reasons on which such request is based; and
3. evidence and the source thereof, the name and domicile of the witness.

Where the applicant has difficulty in submitting a written arbitration application, an oral application may be made and recorded by the labor dispute arbitration commission which informs the other party.

Article 29 The labor dispute arbitration commission shall, within five days of receipt of the arbitration application, accept the application and inform the applicant if it considers that the acceptance conditions are fulfilled; if the acceptance conditions are not fulfilled, it shall notify the applicant in writing and state the reason. Where the labor dispute arbitration commission does not accept or fails to make a decision within the time limit, the applicant may initiate litigation to the people's court in respect of such labor dispute.

Article 30 The labor dispute arbitration commission shall, after acceptance of the arbitration application, serve a duplicate of the arbitration application on the respondent within five days.

The respondent shall, upon receipt of the duplicate of arbitration application, submit a statement of defense to the labor dispute arbitration commission within 10 days. The labor dispute arbitration commission shall, within five days of receipt of the statement of defense, serve a copy of the defense on the applicant. Where the respondent does not submit a statement of defense, the arbitration proceedings shall not be affected.

Section 3 Hearing and Award

Article 31 The award of labor disputes cases by labor dispute arbitration commissions adopts the arbitral tribunal system. The arbitral tribunal shall comprise three arbitrators and has a chief arbitrator. Simple labor dispute cases may be arbitrated solely by an arbitrator.

Article 32 The labor dispute arbitration commission shall, within five days of acceptance of arbitration application, inform the applicant of the composition of the arbitral tribunal in writing.

Article 33 Where an arbitrator is under any of the following circumstances, he shall withdraw, and the parties also have the right to submit written or oral withdrawal application:

1. he is a party to the case or a close relative of the parties or agents;
2. he has an interest in the case;
3. he has other relations with the parties to the case and their agents which may affect fair award;
4. he has meetings with the parties or agents without authorization or send gifts to the parties or agents.

The labor dispute arbitration commission shall timely make a decision on with