The Interpretation (III) of the Supreme People's Court on Several Issues on the Application of Law in the Trial of Labour Dispute Cases ("Interpretation III"), which was adopted by the Judicial Committee of the Supreme People's Court on 12 July 2010, came into effect on 14 September 2010. The salient points of the Interpretation III are summarised below.

Firstly, Interpretation III instructs courts to accept three kinds of cases: 1. cases where an employee demands damages from an employer because the employee cannot obtain social insurance benefi ts due to the employer's failure to undertake relevant social insurance formalities, 2. cases concerning disputes arising out of the restructuring of enterprises and 3. cases demanding additional damages arising out of situations such as an enterprise's failure to pay for overtime.

Secondly, Interpretation III recognises the employment service relationship between an employer and an employee who is already entitled to pension insurance benefi ts or is drawing a pension. Where there is any employment dispute arising and then a lawsuit thereabout is brought to the court, the court shall address such lawsuit as a dispute on employment relationship.

In addition, Interpretation III assigns the burden of proof for demon strating an entitlement to overtime pay. An employee who claims overtime pay must submit evidence to prove overtime work. However, if an employee can demonstrate that their employer possesses evidence of overtime work but has failed to provide it, the employer will be adversely affected.

Moreover, according to existing legal provisions, if an arbitral award is made where an employee requests compensation for lost salary and medical expenses for a work-related injury, or economic indemnity or compensation in a small amount, it is considered a fi nal judgment. Interpretation III now specifi es this "small amount" as being no more than one year of the local minimum wage.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.