The labour dispute arbitration system in China
| DOI | https://doi.org/10.1108/01425450710776326 |
| Date | 21 August 2007 |
| Published date | 21 August 2007 |
| Pages | 520-539 |
| Author | Jie Shen |
| Subject Matter | HR & organizational behaviour |
The labour dispute arbitration
system in China
Jie Shen
University of South Australia, Adelaide, Australia
Abstract
Purpose – The purpose of the paper is to analyse the character istics, development and
implementation of the Chinese labour arbitration system and its role in settling labour disputes.
Design/methodology/approach – The paper analyses official statistics and the arbitral cases
published on the web sites of government labour and social security departments.
Findings – The paper finds that labour arbitration has become the most important mechanism for
settling labour disputes in China since the middle 1990s. This trend indicates the fading of traditional
political and administrative means due to the decreasing influence of governmental labour
administration and the subordinate status of trade unions, and the emergence of the rule of law in
setting labour terms. The effectiveness and fairness of labour arbitration is to a certain extent
constrained by its limitations and workers’ weak position in employment relations that prohibit it from
fully upholding the Labour Law.
Research limitations – The paper shows that there is a paucity of literature devoted to labour
arbitration in China. Further research is necessary to study labour arbitration, particularly the issues
concerning: the frequency and reasons for workers to compromise in demands when claims, especially
unfair dismissal cases; the process and the way in which arbitrators handle cases and make decisions;
the fairness of arbitration awards; and the ways for improving competency and neutrality of
arbitrators and arbitration committees.
Practical implications – The paper shows that the party-appointed method is necessary to
improve the two parties’ control of arbitration process. The public should be allowed to access to case
and arbitrator related information in order to increase the transparency of arbitration.
Originality/value – This is the first paper that introduces the labour arbitration system in China
and analyzes its role in settling labour disputes and its potential for improvement.
Keywords China, Disputes,Industrial relations, Industrialarbitration, Industrial law
Paper type Research paper
Introduction
Alternative dispute resolution (ADR) is attracting increasing attention in market
economies, such as the USA, as a means of allowing both unionized and non-unionised
employees to discuss their grievances in the presence of outside third parties
(Hagglund and Provis, 2005). Labour arbitration is one major ADR mechanism for
settling conflicts outside labour litigation in court and has been advocated by
practitioners and scholars in the areas of industrial relations and human resource
management. Due to the declining influence of the political and administrative
mechanisms and the complexity of litigation for resolving labour disputes, more
reliance is placed on labour arbitration, an issue which has received almost no attention
in the Chinese industrial relations literature. Research in this area therefore is scarce
and has not yet recognized the reality of labour arbitration in China during the past
three decades. This paper analyses the characteristics of Chinese labour arbitration by
looking at key issues, including:
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/0142-5455.htm
ER
29,5
520
Received October 2006
Revised February 2007
Accepted February 2007
Employee Relations
Vol. 29 No. 5, 2007
pp. 520-539
qEmerald Group Publishing Limited
0142-5455
DOI 10.1108/01425450710776326
.The development and implementation of the labour arbitration system,
.Labour arbitration procedures, recruitment of arbitrators,
.Labour arbitration’s role in settling labour disputes, and
.Limitations of the labour arbitration system.
Industrial relations were never the Chinese Government’s concern during the planned
economy. China’s transformation to a much-lauded “socialist market economy” has
now fundamentally changed the way that China conducts its industrial relations, and
in fact, has ended the harmonious employment relations in the nation for ever. The
changes have resulted in widespread worker rights violations and a high level of
discontent among the workers affected. Labour disputes are caused mainly by job loss,
no payment or delay payment of wages, pension and unemployment compensation and
industry accidents (Shen, 2006). In addition, an undeveloped free labour market and
undeveloped social security system leave many workers in an almost helpless
situation. The Chinese workforce who used to be kept docile under the “iron rice-bowl”
system (Walder, 1986) has started unruly standing up for their own rights in different
ways. Their struggles take many forms, from appealing to unions and local
governments, strike and other more violent collective actions, such as surrounding
government buildings and blocking roads, in the ways that they are not use d to. At the
beginning of the economic reform workers were reluctant to take these actions.
Gradually, they have become more prepared to do so and become more experienced in
selecting which form of action to take.
As Lee (2000, p. 41) observed, labour unrest is considered by the Chinese
Government to be the “biggest threat to social stability” that threatens the ruling of the
Chinese Communist Party (CCP). Therefore, there have been concerted attempts from
the Government at all levels to protect workers’ rights and resolve labour disputes. The
1993 Regulations on the Resolution of Enterprise Labour Disputes and the 1994 Labour
Law (revised in 2001) have been promulgated to regulate legally labour relations.
During the past two decades, a comprehensive labour disputes resolution framework
has been established. The framework includes political and administrative means,
tripartism, labour arbitration and labour litigation (Chen, 2004; Clarke et al., 2004; Fox
et al., 2005; Shen, 2006; Zhu and Warner, 2005).
The political and administrative means involve local governments and trade
unions. Under the planned economy, the Chinese Government was responsible for
production, pricing and human resource management. Labour disputes were rare and
they were resolved effectively through administrative means involving the CCP organs
and local labour bureaux. With the deepening of the economic reform, the enterprises
have been given almost unlimited power over labour relations (Zhu and Warner, 2005)
and under most circumstances, the CCP organs and local labour bureaux have lost
power in deciding labour issues at the enterprise.
In the transition to the socialist market economy the All China Federation of Trade
Unions (ACFTU) has been redefining its role as “representative of workers” to respo nd
to the constituents’ cry for protection. It has been trying to expand its representation in
foreign-invested enterprises (FIEs) and privately-owned enterprises (POEs), assuming
that the lack of union existence is a factor of increasing labour disputes. However, an
intrinsic weakness of China’s trade unions is their traditional subservience to the
Party-State in general and enterprise management in particular as the Chinese
Government resists any attempts to independently organize workers across the
Labour dispute
arbitration
system in China
521
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