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

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

Table of Contents Chapter I General Provisions

Chapter II Mediation

Chapter III Arbitration

Section 1 General Provisions

Section 2 Application and Acceptance

Section 3 Hearing and Award

Chapter IV Supplementary Provisions

Chapter I: General Provisions Article 1 This Law is formulated to ensure the fair and timely resolution of labor disputes, protect the lawful rights and interests of the parties involved, and promote harmonious and stable labor relations.

Article 2 This Law applies to the following labor disputes arising between employers and workers within the territory of the People's Republic of China:

Disputes arising from the confirmation of labor relations;

Disputes arising from the conclusion, performance, modification, rescission, and termination of labor contracts;

Disputes arising from name removal, dismissal, resignation, or leaving office;

Disputes arising from working hours, rest and vacation, social insurance, welfare, training, and labor protection;

Disputes arising from labor remuneration, medical expenses for work-related injuries, economic compensation, or damages;

Other labor disputes stipulated by laws and regulations.

Article 3 The resolution of labor disputes shall be based on facts and follow the principles of legality, fairness, timeliness, and an emphasis on mediation, so as to protect the lawful rights and interests of the parties according to the law.

Article 4 When a labor dispute arises, the worker may negotiate with the employer, or invite a trade union or a third party to jointly negotiate with the employer to reach a settlement agreement.

Article 5 When a labor dispute arises, if the parties are unwilling to negotiate, negotiation fails, or a settlement agreement is reached but not performed, they may apply to a mediation organization for mediation. If they are unwilling to mediate, mediation fails, or a mediation agreement is reached but not performed, they may apply to a Labor Dispute Arbitration Committee for arbitration. If a party is dissatisfied with the arbitration award, except as otherwise provided by this Law, they may initiate litigation in a People's Court.

Article 6 When a labor dispute arises, the parties are responsible for providing evidence for their respective claims. If evidence relevant to the dispute is managed and controlled by the employer, the employer shall provide it; if the employer fails to provide it, it shall bear the adverse consequences.

Article 7 If a labor dispute involves ten or more workers on one side who have common claims, they may elect representatives to participate in the mediation, arbitration, or litigation activities.

Article 8 Labor administrative departments of people's governments at or above the county level shall, together with trade unions and enterprise representatives, establish a tripartite mechanism for coordinating labor relations to jointly study and resolve major issues concerning labor disputes.

Article 9 If an employer violates national regulations by defaulting on or failing to pay labor remuneration in full, or defaults on medical expenses for work-related injuries, economic compensation, or damages, the worker may file a complaint with the labor administrative department, which shall handle the matter according to the law.

Chapter II: Mediation Article 10 When a labor dispute arises, the parties may apply for mediation to the following mediation organizations:

Enterprise labor dispute mediation committees;

Grassroots people's mediation organizations established according to the law;

Organizations with labor dispute mediation functions established in townships or sub-districts.

An enterprise labor dispute mediation committee shall be composed of worker representatives and enterprise representatives. Worker representatives shall be trade union members or elected by all workers; enterprise representatives shall be designated by the person in charge of the enterprise. The director of the enterprise labor dispute mediation committee shall be a trade union member or a person recommended by both parties.

Article 11 Mediators of labor dispute mediation organizations shall be adult citizens who are fair, decent, connected with the masses, enthusiastic about mediation work, and possess a certain level of legal knowledge, policy understanding, and cultural education.

Article 12 A party may apply for labor dispute mediation in writing or orally. If the application is made orally, the mediation organization shall record on the spot the applicant's basic information, the matters of dispute for mediation, the reasons, and the time.

Article 13 When mediating a labor dispute, the mediator shall fully listen to the statements of facts and reasons by both parties, patiently guide them, and help them reach an agreement.

Article 14 If an agreement is reached through mediation, a mediation agreement shall be drafted. The mediation agreement shall be signed or sealed by both parties, and shall take effect after being signed by the mediator and stamped with the seal of the mediation organization. It is binding on both parties, and the parties shall perform it. If no mediation agreement is reached within fifteen days from the date the labor dispute mediation organization receives the mediation application, the parties may apply for arbitration according to the law.

Article 15 If, after a mediation agreement is reached, one party fails to perform the agreement within the agreed time limit, the other party may apply for arbitration according to the law.

Article 16 If a mediation agreement is reached regarding the payment of defaulted labor remuneration, medical expenses for work-related injuries, economic compensation, or damages, and the employer fails to perform it within the agreed time limit, the worker may hold the mediation agreement and apply to a People's Court for a payment order according to the law. The People's Court shall issue a payment order according to the law.

Chapter III: Arbitration Section 1: General Provisions Article 17 Labor Dispute Arbitration Committees shall be established according to the principles of overall planning, rational layout, and meeting practical needs. People's governments of provinces and autonomous regions may decide to establish them in cities and counties; people's governments of municipalities directly under the Central Government may decide to establish them in districts and counties. Municipalities directly under the Central Government and cities divided into districts may also establish one or several Labor Dispute Arbitration Committees. Labor Dispute Arbitration Committees are not set up level-by-level corresponding to administrative divisions.

Article 18 The labor administrative department of the State Council shall formulate arbitration rules in accordance with the relevant provisions of this Law. Labor administrative departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government shall provide guidance for labor dispute arbitration work within their administrative areas.

Article 19 A Labor Dispute Arbitration Committee shall be composed of representatives from the labor administrative department, trade unions, and enterprises. The number of personnel composing the Committee shall be an odd number. The Labor Dispute Arbitration Committee shall perform the following duties according to the law:

Appoint or dismiss full-time or part-time arbitrators;

Accept labor dispute cases;

Discuss major or complex labor dispute cases;

Supervise arbitration activities.

A Labor Dispute Arbitration Committee shall set up a working body to handle its daily work.

Article 20 A Labor Dispute Arbitration Committee shall maintain a roster of arbitrators. Arbitrators shall be fair and decent and meet one of the following conditions:

Have served as a judge;

Be engaged in legal research or teaching and hold an intermediate or higher professional title;

Possess legal knowledge and have engaged in professional work such as human resources management or trade union work for at least five years;

Have practiced as a lawyer for at least three years.

Article 21 A Labor Dispute Arbitration Committee is responsible for exercising jurisdiction over labor disputes arising within its jurisdiction. A labor dispute falls under the jurisdiction of the Labor Dispute Arbitration Committee at the place where the labor contract is performed or where the employer is located. If the two parties separately apply for arbitration to the committees at the place of contract performance and the employer's location, the committee at the place of contract performance shall have jurisdiction.

Article 22 The worker and the employer involved in a labor dispute are the parties to the labor dispute arbitration case. If a labor dispute arises between a labor dispatching unit or the receiving employer and a worker, the labor dispatching unit and the receiving employer shall be joint parties.

Article 23 A third party who has a legal interest in the outcome of a labor dispute case may apply to participate in the arbitration activities, or be notified by the Labor Dispute Arbitration Committee to participate.

Article 24 Parties may entrust an agent to participate in arbitration activities. To entrust another person, a power of attorney signed or sealed by the principal must be submitted to the Labor Dispute Arbitration Committee, specifying the entrusted matters and scope of authority.

Article 25 For workers who have lost or partially lost civil capacity, their statutory agents shall participate in arbitration on their behalf; if there is no statutory agent, the Labor Dispute Arbitration Committee shall designate an agent for them. If a worker is deceased, their close relatives or agent shall participate in the arbitration.

Article 26 Labor dispute arbitration shall be conducted openly, except where the parties agree to a closed hearing or where state secrets, commercial secrets, or personal privacy are involved.

Section 2: Application and Acceptance Article 27 The limitation period for applying for labor dispute arbitration is one year. The arbitration limitation period is calculated from the date the party knows or should have known that their rights were infringed. The limitation period prescribed in the preceding paragraph is interrupted if one party claims rights against the other, requests rights relief from relevant departments, or if the other party agrees to perform its obligations. The limitation period shall be recalculated from the time of interruption. If a party cannot apply for arbitration within the limitation period prescribed in the first paragraph of this Article due to force majeure or other justified reasons, the limitation period is suspended. The limitation period shall resume from the date the cause of suspension is eliminated. During the subsistence of the labor relations, if a dispute arises over delayed payment of labor remuneration, the worker's application for arbitration is not subject to the limitation period prescribed in the first paragraph of this Article; however, if the labor relations are terminated, the application shall be made within one year from the date of termination.

Article 28 An applicant applying for arbitration shall submit a written arbitration application, along with copies matching the number of respondents. The arbitration application shall specify the following matters:

The worker's name, gender, age, occupation, work unit, and address; the employer's name, address, and the name and title of its legal representative or main person in charge;

The arbitration requests and the facts and reasons upon which they are based;

Evidence and its sources, and the names and addresses of witnesses.

If writing an arbitration application is genuinely difficult, an oral application may be made, which shall be recorded by the Labor Dispute Arbitration Committee and notified to the other party.

Article 29 Within five days from the date of receiving the arbitration application, if the Labor Dispute Arbitration Committee finds that the acceptance conditions are met, it shall accept the case and notify the applicant; if it finds the conditions are not met, it shall notify the applicant in writing of its refusal to accept the case and state the reasons. If the committee refuses acceptance or fails to make a decision within the time limit, the applicant may initiate litigation in a People's Court regarding the dispute.

Article 30 After accepting the arbitration application, the Labor Dispute Arbitration Committee shall serve a copy of the application on the respondent within five days. Upon receiving the copy, the respondent shall submit a statement of defense to the committee within ten days. The committee shall serve a copy of the defense on the applicant within five days of receipt. The respondent's failure to submit a defense does not affect the progress of the arbitration proceedings.

Section 3: Hearing and Award Article 31 The Labor Dispute Arbitration Committee handles labor dispute cases through an arbitral tribunal system. The arbitral tribunal is composed of three arbitrators, with one acting as the chief arbitrator. Simple labor dispute cases may be arbitrated by a single arbitrator.

Article 32 The Labor Dispute Arbitration Committee shall notify the parties in writing of the composition of the arbitral tribunal within five days from the date of accepting the application.

Article 33 An arbitrator shall recuse themselves, and the parties also have the right to request their withdrawal orally or in writing, under any of the following circumstances:

The arbitrator is a party to the case, or a close relative of a party or agent;

The arbitrator has a legal interest in the case;

The arbitrator has other relations with a party or agent that may affect a fair award;

The arbitrator privately meets with a party or agent, or accepts invitations or gifts from a party or agent.

The Labor Dispute Arbitration Committee shall make a prompt decision on the withdrawal request and notify the parties orally or in writing.

Article 34 If an arbitrator falls under circumstance (4) of Article 33 of this Law, or engages in soliciting or accepting bribes, favoritism, malpractices, or perverting the law in making an award, they shall bear legal liability according to the law. The Labor Dispute Arbitration Committee shall dismiss them.

Article 35 The arbitral tribunal shall notify both parties in writing of the date and place of the hearing five days before the hearing. A party with justified reasons may request a postponement of the hearing three days before it begins. Whether to grant the postponement is decided by the Labor Dispute Arbitration Committee.

Article 36 If an applicant, having received written notice, fails to appear at the hearing without justified reasons or leaves the hearing midway without the tribunal's consent, it may be deemed a withdrawal of the arbitration application. If a respondent, having received written notice, fails to appear without justified reasons or leaves the hearing midway without the tribunal's consent, a default award may be made.

Article 37 If the arbitral tribunal deems that specialized issues require appraisal, it may hand them over to an appraisal institution agreed upon by the parties; if there is no agreement or an agreement cannot be reached, an appraisal institution designated by the arbitral tribunal shall conduct the appraisal. Upon the request of the parties or the tribunal, the appraisal institution shall send an appraiser to participate in the hearing. With the tribunal's permission, the parties may question the appraiser.

Article 38 During the arbitration process, the parties have the right to cross-examine and debate. When cross-examination and debate conclude, the chief arbitrator or sole arbitrator shall ask the parties for their final statements.

Article 39 Evidence provided by a party that is verified as true shall be used by the arbitral tribunal as the basis for ascertaining facts. If a worker is unable to provide evidence relevant to the arbitration claim that is managed and controlled by the employer, the arbitral tribunal may require the employer to provide it within a specified period. If the employer fails to provide it within the time limit, it shall bear adverse consequences.

Article 40 The arbitral tribunal shall record the hearing proceedings in a transcript. If the parties or other arbitration participants believe there are omissions or errors in the record of their statements, they have the right to request corrections. If corrections are not made, the request shall be recorded. The transcript shall be signed or sealed by the arbitrators, recorders, parties, and other arbitration participants.

Article 41 After applying for labor dispute arbitration, the parties may settle on their own. If a settlement agreement is reached, the arbitration application may be withdrawn.

Article 42 Before making an award, the arbitral tribunal shall attempt mediation first. If an agreement is reached through mediation, the tribunal shall prepare a mediation statement. The mediation statement shall state the arbitration claims and the results agreed upon by the parties. It shall be signed by the arbitrators, stamped with the seal of the Labor Dispute Arbitration Committee, and served on both parties. The mediation statement takes legal effect upon being signed for receipt by both parties. If mediation fails, or if a party reneges before the mediation statement is served, the arbitral tribunal shall make an award promptly.

Article 43 An arbitral tribunal's award for a labor dispute case shall be concluded within forty-five days from the date the Labor Dispute Arbitration Committee accepts the application. If an extension is required due to the complexity of the case, it may be extended with the approval of the director of the committee, and the parties shall be notified in writing; however, the extension period shall not exceed fifteen days. If an arbitration award is not made within the time limit, the parties may initiate litigation in a People's Court regarding the dispute. If some facts of the case are already clear, the arbitral tribunal may make a partial award on those clear facts first.

Article 44 In cases seeking labor remuneration, medical expenses for work-related injuries, economic compensation, or damages, the arbitral tribunal may, upon the applicant's request, rule for advance execution and transfer it to a People's Court for execution. An arbitral tribunal's ruling for advance execution must meet the following conditions:

The rights and obligations between the parties are clear;

Failure to execute in advance will severely affect the applicant's livelihood.

A worker applying for advance execution is not required to provide a guarantee.

Article 45 An award shall be made according to the opinion of the majority of the arbitrators, and the dissenting opinions of the minority shall be recorded in the transcript. If the tribunal cannot form a majority opinion, the award shall be made according to the chief arbitrator's opinion.

Article 46 The award statement shall specify the arbitration claims, disputed facts, reasons for the award, award results, and the date of the award. The award statement shall be signed by the arbitrators and stamped with the seal of the Labor Dispute Arbitration Committee. Arbitrators with dissenting opinions may choose whether to sign it or not.

Article 47 Except as otherwise provided by this Law, arbitration awards for the following labor disputes are final awards, and the award statement takes legal effect from the date it is made:

Disputes involving the recovery of labor remuneration, medical expenses for work-related injuries, economic compensation, or damages, where the amount does not exceed twelve months of the local monthly minimum wage standard;

Disputes arising over working hours, rest and vacation, social insurance, etc., resulting from the implementation of national labor standards.

Article 48 If a worker is dissatisfied with an arbitration award specified in Article 47 of this Law, they may initiate litigation in a People's Court within fifteen days from the date of receiving the award statement.

Article 49 If an employer has evidence proving that an arbitration award specified in Article 47 of this Law falls under any of the following circumstances, it may apply to the Intermediate People's Court at the location of the Labor Dispute Arbitration Committee to set aside the award within thirty days of receiving the award statement:

There is a definite error in the application of laws and regulations;

The Labor Dispute Arbitration Committee has no jurisdiction;

There is a violation of statutory procedures;

The evidence upon which the award is based is forged;

The other party has concealed evidence sufficient to affect a fair award;

The arbitrator engaged in soliciting or accepting bribes, favoritism, malpractices, or perverting the law while arbitrating the case.

If the People's Court, after organizing a collegial panel to review and verify the case, finds that one of the circumstances in the preceding paragraph exists, it shall rule to set aside the award. If an arbitration award is set aside by a People's Court ruling, the parties may initiate litigation in a People's Court regarding the dispute within fifteen days from the date of receiving the ruling statement.

Article 50 If a party is dissatisfied with an arbitration award for a labor dispute case other than those specified in Article 47 of this Law, they may initiate litigation in a People's Court within fifteen days from the date of receiving the award statement; if no litigation is initiated upon the expiration of the period, the award statement shall take legal effect.

Article 51 Parties must perform legally effective mediation statements or award statements within the prescribed time limits. If one party fails to perform within the time limit, the other party may apply to a People's Court for execution in accordance with relevant provisions of the Civil Procedure Law. The People's Court accepting the application shall execute it according to the law.

Chapter IV: Supplementary Provisions Article 52 Labor disputes arising between staff members operating under an employment contract system in public institutions and their respective units shall be handled in accordance with this Law; if laws, administrative regulations, or the State Council stipulate otherwise, those provisions shall apply.

Article 53 Labor dispute arbitration is free of charge. The funding for Labor Dispute Arbitration Committees shall be guaranteed by public finance.

Article 54 This Law shall come into effect on May 1, 2008.