Legal Regulation of Labor Disputes

Labor disputes arising from statutory or contractual bases are resolved by the governmental labor mediation and arbitration process. The mediation process traditionally occurs within the enterprise and is voluntary. Arbitration is available, but claims must be filed within time limits. The Labor Mediation and Arbitration Law (LMA) became effective on May 1, 2008. It provides increased accessibility for employees and greater finality to the arbitration process. It also clarifies the relationship of arbitration awards to judicial appeal. Certain exceptions to the usual exhaustion requirement are now included where direct access to the court is permitted. The new law seems to have spurred an increased use of arbitration: “Guangdong's courts and arbitrators handled more than twice as many labor disputes this May than a year earlier, after introduction of rules giving workers more rights and making arbitration free.”

The evolving legal regulation of labor arbitration, resulting in the current, primary regulations, began in 1993 with Regulations on Settlement of Labor Disputes in Enterprises, which were followed by the 1994 Labor Law and two Supreme People's Court Judicial Interpretations in 2001 and 2006. The LMA and the Labor Contract Law (LCL) were passed in 2007 and became effective in 2008. On January 1, 2009, new Labor and Personnel Dispute Arbitration Procedure Rules were issued by the MOHRSS. Altogether, the laws make available a three-step process of mediation, arbitration, and litigation.