New China Labor Law II

In addition to the New Labor Law, China just passed a law "clarifying and modifying" the mandatory arbitration provisions for labor disputes. Here is what the Chinese newspapers have to say about it.

"To solve labor disputes fairly and in a timely way, the law has strengthened the role of grassroots mediation institutions, improved the arbitration system, and clearly stated that labor dispute arbitration is free of charge," said Wu Bangguo, the NPC Standing Committee chairman, who presided over the closing session.

"It will shorten the cycle of labor dispute settlement, lower the cost for laborers to safeguard their lawful rights, and is conducive to the development of a harmonious relations between employees and employers."

We've had several experiences with arbitration, and they were eye-opening. In once case an employee was engaging in the Chinese habit of competing directly with his current employer. Taking money from the employer and using it for competing purposes. Slam dunk, huh?

Nope. We hired local counsel who was well known in the field and well known to the arbitration panel. This was of great assistance because there are no rules against ex parte communications, so a member of the arbitration panel could call our attorney and tell her where our case was weak and how we needed to beef it up.

While that worked in our favor, the fact that company executives couldn't testify because we could not prove the veracity of their statements wasn't so helpful. It was also not helpful that we could not submit files from his computer as evidence since we could tamper with them, but we could submit emails from his computer and hard copies of documents we put in his employment file with the company because we couldn't tamper with them.

Basically, take all your evidence and throw it in the air and whatever hits the ground first is admissable and the rest isn't. And this case was just outside of Shanghai along the eastern seaboard. I can't imagine what the rules are a bit inland.

My point is that there is a lot of room for improvement. I haven't read the changes, but it appears they are employee driven and as usual will be unsparingly implemented against foreign companies and used when the purpose serves against all others.