Responding to the upsurge in workplace disputes in recent years,
the Chinese government has issued new regulations to establish
dispute resolution structures within the companies themselves. The
Ministry of Human Resources and Social Security (MOHRSS), successor
to the former Ministry of Labor, on November 30 promulgated Order
No. 17, the Regulations on the Negotiation and Mediation of
Enterprise Labor Disputes
(企业劳动争议协商调解规定,
the "Regulations"), effective January 1.
The Regulations require large- and medium-sized enterprises without
regard to ownership to establish internal labor dispute mediation
committees comprised of equal numbers of enterprise representatives
and worker representatives to facilitate enterprise-worker
communications, establish a mechanism to negotiate labor disputes,
and enhance negotiations to resolve such disputes. The committees
are to be guided in their work by their local MOHRSS bureau. The
overall purpose is not just to resolve disputes after they arise,
but to prevent issues from becoming disputes leading to the filing
of a case with the local labor dispute arbitration commission or,
although it is unstated, a strike or other mass protest.
The Regulations do not specify who can serve as members of the
labor dispute mediation committees. No provision is made for
selection of worker representatives, but it seems most likely that
they will be selected from among leaders of the enterprise union
or, if a union has not been formed, the workers council. The
committees do not constitute a forum for collective bargaining.
Mediation is voluntary. Workers who have a dispute with the
enterprise may represent themselves or designate the union or a
third party to represent them. A mediation agreement is not binding
unless executed in writing by both parties. Once executed, it will
be subject to verification but will not be reopened unless new
evidence can be presented.
Large- and medium-sized foreign enterprises in China should quickly
move to establish their own labor dispute mediation committees and
formulate strategies for membership and procedural issues. As it is
unclear how well the new structure may help to improve
labor-management relations, enterprises should continue to rely on
their HR policies and other means to manage labor-management
relations proactively and minimize the potential for the occurrence
of disputes.
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