China Arbitration & Regulation: Glossary of Concepts

This page has a glossary of concepts for Chinese law in dispute resolution and regulation.

You can learn more about this subject at CBL’s China employment & labor law FAQ here.

Arbitration

Labor Arbitration Tribunal

See full article here.

Employment Dispute

In Chinese labor law, an employment dispute arises from failure of one party to perform the employment contract. Employment disputes in China often arise over the termination of the contract, discharge of the employee, work hours and overtime, or social security contributions.

In this context “employee” refers to someone who has signed a full-time employment contract with an employer. An employer must be a registered business organization that has a contract with the employee, therefore individuals and certain organizations cannot be employers and therefore cannot be party to an employment dispute.

Learn more about social security obligations in China here.

Limitations Period

In Chinese arbitration law, the limitations period is a statute of limitations that sets a time limit on making a claim, after which the claimant’s rights will be lost. Under China Civil Code Section 198, if the law does not set a statute of limitations for a certain type of arbitration, then the litigation limitations period applies.

Mediated Settlement Agreement

In Chinese dispute resolution law, a mediated settlement agreement is a legal instrument affirmed by a court that establishes a settlement between the parties. A mediated settlement agreement is enforceable by the court on petition by a party against a party in breach. A court in China may encourage the parties to engage in mediation as an alternative to litigation, and assign a mediator to a case. The agreement becomes effective only when signed by the parties.

Mediator

In Chinese dispute resolution law, mediators are members of the government’s Mediation Committee, and are responsible for mediating civil disputes. A mediation can be initiated at the party’s request or due to intervention by the mediation committee. A government agency may also initiate a mediation. However, if a party does not want to mediate the dispute, the mediator must withdraw and advise of the right to file a lawsuit, or they may request regulatory intervention.

A mediator who believes that the mediation involves a volatile conflict should refer the matter to the appropriate government agency.  In China, it is the mediator who must perform an investigation and interview all relevant parties to fully understand the nature of the case before starting. Then, the mediator will inform the parties of their rights and obligations during a mediation.

During a mediation, the mediator’s goal is to provide guidance and persuasion to the parties so they can reach a Mediated Settlement Agreement through compromise. If the parties cannot agree on a compromise, the mediator should recommend reasonable terms to include in the Mediated Settlement Agreement that treat both parties in a fair and equal manner.

The Mediated Settlement Agreement needs judicial recognition; if a party refuses to obtain it, the mediator should recommend filing a lawsuit. The mediator will supervise the performance of the Mediated Settlement Agreement, and if one party fails to perform their obligations, they must recommend the other party seek judicial enforcement of their rights. Mediators in China maintain archives of past mediations.

Request for Arbitration

In Chinese law, a request for arbitration is submitted to an arbitral committee to initiate the arbitration process.

Regulators

Administrative Oversight of Social Security

In Chinese employment law, administrative oversight of social security refers to refers to an additional layer of governmental oversight on the administration of social security funds.

Learn more about social security obligations in China here.

Labor Regulator

See full article here.

Unions

Collective Bargaining Agreement

In Chinese labor law, a collective bargaining agreement is a kind of agreement made between the employees collectively and the employer. However, bargaining capability is limited in China because the government believes that its legal regime for labor law, occupational health and safety, and emergency management already effectively meet the needs of workers. Nonetheless, the China Labor Unions Act provides for a collective bargaining process, where management and labor have equally bargaining power as to wage payments, which culminate in a collective bargaining agreement.

This right is enshrined because of the weaker position of labor in these negotiations. Chinese labor theory believes that management has superior bargaining power to labor because of their close organization and high level of skill, which allows them to achieve unfair bargains with disorganized workers with poor negotiating skills. The collective bargaining process was instituted into China’s statutes to remedy this imbalance.

Collective Bargaining Representative

In Chinese employment law, a collective bargaining representative is a person empowered to negotiate on behalf of employees, and is equal in number to the number of negotiating representatives presented by the other side.

Labor Union President

In Chinese labor law, the labor union president is the person who leads a labor union, and can refer to the leader of the national union or one of the local component unions. The local trade union presidents are elected, whereas the national union president is selected by delegates from the local component unions. A labor union president in China is simultaneously obligated to defend the interests of the entire population and to defend the interests of their union members.

The labor union president is empowered to request government intervention for violation of workers’ labor law rights such as for working conditions or unlawful termination.

Meeting of All the Employees

In Chinese labor law, the meeting of all the employees is a Marxist concept rooted in a traditional belief that the great masses of the workers are the true masters of productive enterprise, and prior to market reform constituted a meeting of everyone employed at a particular enterprise under the leadership of Communist Party officers.

The meeting of all the employees concept was revised in the Chinese Communist Party’s September 15, 1986, Rules on the Organization of a Meeting of All the Employees at Industrial Enterprises. The current rules is empowered to participate in the management of all aspects of industrial operations, from wages, work hours, working conditions, and safety.