China Takes on Labor Disputes With New Regulations

January 16, 2012
  • Jason Ho

    Former Manager, Advisory Services & CTI, BSR

With ongoing and increasing labor disputes between workers and enterprises in China, the Chinese government has released new regulations on consultation and mediation for labor disputes in business. The hope is that these new regulations will help improve the timeliness and effectiveness of resolving labor disputes as civil courts and arbitration committees have been overwhelmed with labor cases.

BSR's Jason Ho recently sat down with local collective-bargaining expert Duan Yi to discuss the implications of the regulations for future labor-dispute mediation in China.  Yi pointed out that the government’s aim with the new regulations is preventative—to address labor disputes while still small and manageable, before they become a full-fledged strike or protest. This will be achieved by creating employee-employer mediation committees in all large-scale enterprises (and optional for smaller-size enterprises) to assist during the mediation process.

These committees will have broad responsibilities outside of assisting the mediation process, including monitoring the compliance of collective contracts, investigating complaints, publicizing information regarding labor laws, and participating in major enterprise plans that could impact the interests of their employees.

However, Yi noted that these new regulations aren't without challenges. In particular, one main challenge for the long-term success of these mediating mechanisms will be compliance from upper management. In addition, there are questions about whether the committees will be trusted by employees. If the committees do not act in the best interest of employees, then employees will not receive the protection the regulations provide. The hope, however, is that they will be trusted and can lead to a mechanism capable of continuously improving workers’ rights and employee-employer relations in China.

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