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Labor Arbitration When Business Licenses Are Involved

Introduction Labor arbitration is a quasi-judicial proceeding in which a neutral third party (arbitrator) resolves disputes between employees and employers. In China, labor arbitration is mandatory for most employment disputes, including those involving business licenses. This article discusses the procedures and legal framework surrounding labor arbitration in the context of business licenses.

Legal Framework The Labor Dispute Mediation and Arbitration Law of the People's Republic of China (the "Arbitration Law") governs labor arbitration. According to the Arbitration Law:

All labor disputes must be submitted to the local labor arbitration committee for conciliation. If conciliation fails, the dispute may be submitted to labor arbitration. Labor arbitration is final and binding on both parties, except in limited circumstances.

Regarding business licenses, the Law on Administrative Licensing of the People's Republic of China provides that:

Business licenses are granted by the relevant government agencies. Any dispute regarding the issuance or revocation of a business license may be submitted to administrative litigation.

Procedures Conciliation: Before filing an arbitration claim, employees must first attempt conciliation with their employer at the local labor arbitration committee. The committee will appoint a conciliator to facilitate negotiations. If conciliation fails within 30 days, the employee may file an arbitration claim.

Arbitration: The arbitration claim must be filed with the local labor arbitration committee within 60 days of the dispute arising. The committee will then form an arbitration panel, typically consisting of one arbitrator appointed by the employee, one appointed by the employer, and a chairperson appointed by the committee.

The arbitration panel will hold hearings and examine evidence presented by both parties. The parties may be represented by legal counsel. The panel will issue an arbitration award within 45 days of the hearing.

Legal Issues Business Licenses as Evidence: In labor arbitration, business licenses may be relevant evidence to support claims or defenses. For example:

An employee may argue that their employer does not have a valid business license and therefore cannot lawfully employ them. An employer may argue that an employee's labor contract is invalid because it was signed before the employer obtained a business license.

Arbitrability of Business License Disputes: While labor arbitration is generally mandatory for employment disputes, disputes involving business licenses may also be subject to administrative litigation. Under certain circumstances, a party may choose to pursue either labor arbitration or administrative litigation, depending on the specific facts and legal issues involved.

Enforcement of Arbitration Awards: Once issued, labor arbitration awards are final and binding. However, a party may file a petition to the People's Court to have the award set aside if:

The award was issued by an illegal means. The award exceeds the arbitrator's authority. The award is based on a mistake of fact.

Conclusion Labor arbitration plays a crucial role in resolving employment disputes in China. When business licenses are involved, both employees and employers should be aware of the legal framework and procedures governing labor arbitration. Understanding the arbitrability of business license disputes and the potential for enforcement through the People's Court can help parties navigate the arbitration process effectively. By utilizing arbitration and administrative litigation mechanisms, parties can seek fair and timely resolutions to employment disputes involving business licenses.