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Still Applicable: Arbitration in Labor Relations in China

Introduction

Labor arbitration is an important mechanism for resolving disputes between employers and employees in China. It provides a quick, efficient, and cost-effective alternative to litigation. However, recent legal developments have raised questions about the continued applicability of arbitration in labor relations.

Legal Framework

The Labor Law of the People's Republic of China (Labor Law) and the Arbitration Law of the People's Republic of China (Arbitration Law) govern labor arbitration. The Labor Law provides that labor disputes can be resolved through arbitration, mediation, or litigation. The Arbitration Law provides a framework for the conduct of arbitration proceedings.

Scope of Arbitration

Article 77 of the Labor Law states that the following labor disputes can be submitted to arbitration:

Disputes over the establishment, alteration, or termination of labor relations Disputes over wages, working hours, rest periods, and other benefits Disputes over labor discipline Disputes over employment termination Other labor disputes

Exceptions to Arbitration

Article 78 of the Labor Law provides two exceptions to the requirement to arbitrate labor disputes:

Disputes involving personal injury or death Disputes that involve the rights or interests of minors

Recent Legal Developments

In recent years, there have been several legal developments that have affected the applicability of arbitration in labor relations.

Supreme People's Court Interpretation No. 1 (2018): This interpretation clarified that arbitration agreements with employees must be voluntary and informed. Otherwise, the arbitration agreement is invalid, and the dispute must be resolved through litigation. Supreme People's Court Interpretation No. 2 (2019): This interpretation further emphasized the voluntary nature of arbitration agreements. It also provided that employers cannot force employees to waive their right to litigate.

Implications

The recent legal developments have made it more difficult for employers to compel employees to arbitrate labor disputes. However, arbitration remains a valid and applicable mechanism for resolving labor disputes in China.

Advantages of Arbitration

Arbitration offers several advantages over litigation, including:

Speed: Arbitration proceedings are typically quicker than litigation. Efficiency: Arbitration is less formal than litigation, which allows for a more streamlined process. Confidentiality: Arbitration proceedings are private, which can be beneficial for protecting sensitive information. Cost-effectiveness: Arbitration is generally less expensive than litigation.

Recommendations

To ensure the continued effectiveness of arbitration in labor relations, the following recommendations are made:

Employers should ensure that arbitration agreements with employees are voluntary and informed. Employers should not force employees to waive their right to litigate. Employees should carefully review arbitration agreements before signing them. Employees should be aware of their rights and options for resolving labor disputes.

Conclusion

Arbitration remains a valid and applicable mechanism for resolving labor disputes in China. However, employers must adhere to the legal requirements for the formation and validity of arbitration agreements. Employees should be aware of their rights and options before entering into arbitration agreements. By following these recommendations, arbitration can continue to play an important role in the resolution of labor disputes in China.