China looks to deal with rising number of labor disputes

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State media announced today that China’s top legislature started to read the draft law on labor dispute mediation and arbitration on Sunday amid an increasing number of labor disputes that emerged in the country.

“The draft bill has summed up the experience in solving labor disputes, which also takes new situation and problems into account. It is aimed at strengthening mediation and improving arbitration, so as to solve labor disputes without going to court,” said Xin Chunying, vice Chairman of the Legislative Affairs Commission of the National People’s Congress Standing Committee.

Regulations for handling corporate labor disputes were first promulgated in 1993 and 1994, though the continued economic boom has lead to an increasing gap between rich and poor resulting in increased labor disputes throughout the country. According to NPC statistics, labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases, involving 5.32 million employees from 1987 to the end of 2005 – a growth rate of 27.3percent annually.

The draft bill is meant to strengthen mediation and improve arbitration so as to help solve labor disputes without resorting to the courts and thus safeguard employee’s legitimate rights and promote social harmony, Xin said.

According to Xinhua, under the draft bill, corporations are entitled to establish labor mediation committees to solve labor disputes on a grassroots level that occur within the company. The corporate labor mediation committee should consist of employees and management representatives. Should a labor disputes occur, litigants will be able to turn to the corporate mediation committee the draft bill said. Labor disputes concerning pay, medical fees of job-related injuries, compensation, pensions whose relevant sums do not exceed 12 months of the local minimum monthly wages could be solved by arbitration. The arbitration documents will be legally binding once handed out.