Interpretation on Several Issues Concerning the Application of the Law to Trials of Employment Disputes (3)

(Promulgated by the Supreme People's Court on September 13 2010 and effective as of September 14 2010.)

SPC Interpretation [2010] No.12

The following interpretation is rendered pursuant to relevant laws such as the PRC Labour Law, the PRC Employment Contract Law, the PRC Law on the Mediation and Arbitration of Employment Disputes, and the PRC Civil Procedure Law (2nd Revision) , while taking into account civil trial practice in order to correctly try employment disputes.

Article 1: If a worker, on the grounds that he/she is ineligible for social insurance benefits because his/her employer failed to carry out the procedures to enroll him/her in social insurance and the social insurance office could not carry out the procedures retroactively, demands that his/her employer compensate for his/her losses and a dispute arises as a result, the people's court shall accept such case.

Article 2: If a dispute arises in connection with a change in organisational form carried out by an enterprise at its own initiative, the people's court shall accept such case.

Article 3: If a worker institutes a legal action in a people's court pursuant to Article 85 of the Employment Contract Law, demanding that his/her employer pay additional compensation, the people's court shall accept such case.

Article 4: If a dispute arises between a worker and an employer that has not applied for a business licence, has had its business licence revoked or has continued to operate despite the expiration of its term of operation, the employer or its investors shall be named as parties.

Article 5: If an employer that has not applied for a business licence, has had its business licence revoked or has continued to operate despite the expiration of its term of operation, carries on its business on the basis of a business licence borrowed from a third party through an attachment arrangement, etc., the employer and the lender of the business licence shall be named as parties.

Article 6: If a party is dissatisfied with the arbitral award rendered by an employment and public personnel arbitration commission, and institutes a legal action in a people's court in accordance with the law, and upon examination the people's court holds that the arbitral award omitted a party that ought to have been part of the arbitration, it shall add the omitted person as a party to the legal action in accordance with the law.

If the added party is liable, the people's court shall deal with such matter simultaneously.

Article 7: If an employment dispute arises between an employer and an employee it has recruited who is already receiving old-age insurance benefits in accordance with the law or has received retirement benefits and a legal action is instituted in a people's court, the people's court shall handle the same as a service relationship.

Article 8: If an employment dispute arises between a person's new employer and a person whose wage has been halted but remains on an enterprise's role, or who is internally retired but has not reached the statutory retirement age, has been laid off or is on extended leave as the result of his/her enterprise having suspended operations, and a legal action is instituted in a people's court in accordance with the law, the people's court shall handle the same as an employment relationship.

Article 9: If a worker claims overtime pay, he/she shall bear the burden of proof in respect of the existence of the facts of the overtime work. However, if the worker has evidence showing that his/her employer has evidence in its possession showing the existence of the overtime work and it does not provide the same, the employer shall bear the adverse consequences.

Article 10: If the agreement between a worker and his/her employer reached in respect of the carrying out of procedures relating to the termination or ending of his/her employment contract and the payment of his/her wages, overtime pay, severance pay or compensation, etc. does not violate the mandatory provisions of laws or administrative statutes and was not entered into as the result of deception, coercion or a party taking advantage of the difficulties of the other, such agreement shall be held to be valid.

If the agreement specified in the preceding paragraph was the subject of a material misunderstanding or clearly lacks in fairness and a party requests that it be rescinded, the people's court shall uphold such request.

Article 11: If a written mediation statement rendered by an employment and public personnel arbitration commission has become legally effective and a party reneges thereon and institutes a legal action, the people's court shall not accept such case; and if it has accepted the case, it shall render a ruling rejecting the action.

Article 12: If an employment and public personnel arbitration commission fails to punctually render a case acceptance decision or arbitral award, and a party directly institutes a legal action, the people's court shall accept such case, unless any of the following applies to the case for which arbitration was applied for:

(1) a transfer of jurisdiction;

(2) service is currently taking place or has been delayed;

(3) the results of a separate suit or the conclusions of an assessment of disability are being awaited;

(4) the hearings by a labour and personnel affairs arbitration committee are being awaited;

(5) a procedure of forensic analysis has been initiated or another department has been appointed to conduct an investigation and gather evidence; or

(6) there is another legitimate reason.

If a party institutes a legal action on the grounds that the employment and public personnel arbitration commission has failed to punctually render its arbitral award, the notice of case acceptance issued by the employment and public personnel arbitration commission or other document or proof that it accepted the arbitration application shall be submitted.

Article 13: If a worker seeks recovery of employment remuneration, medical expenses for a work-related injury, severance pay or compensation pursuant to Item (1) of Article 47 of the Law on the Mediation and Arbitration of Employment Disputes, and if the arbitral award involves more than one item and the amount determined for each of the items does not exceed an amount equivalent to 12 months of the minimum wage rate in the locality, the case shall be handled as a final award.

Article 14: If an arbitral award rendered by an employment and public personnel arbitration commission contains both items subject to a final award and items subject to a non-final award, and a party that is dissatisfied with such award institutes a legal action with a people's court, such case shall be handled as a non-final award.

Article 15: If a worker institutes a legal action with a basic level people's court pursuant to Article 48 of the Law on the Mediation and Arbitration of Employment Disputes and the employer applies to the intermediate people's court of the place where the employment and public personnel arbitration commission is located for vacation of the arbitral award pursuant to Article 49 of the Law on the Mediation and Arbitration of Employment Disputes, the intermediate people's court shall not accept such case; and if it has accepted the case, it shall render a ruling rejecting the application.

If the worker has his/her suit rejected by the people's court or if he/she withdraws his/her suit, the employer may apply to the intermediate people's court of the place where the employment and public personnel arbitration commission is located for vacation of the arbitral award within 30 days from the date of receipt of the ruling.

Article 16: If an employer applies to an intermediate people's court for the vacation of an arbitral award pursuant to Article 49 of the Law on the Mediation and Arbitration of Employment Disputes, the ruling to reject the application or vacate the arbitral award rendered by the intermediate people's court shall be final.

Article 17: If a worker applies to a people's court for a payment order pursuant to the second paragraph of Article 30 of the Employment Contract Law and Article 16 of the Law on the Mediation and Arbitration of Employment Disputes and such application satisfies the provisions of Part 17, Procedure for the Recovery of Debts, of the Civil Procedure Law, the people's court shall accept such case.

If an application for a payment order is made to a people's court pursuant to the second paragraph of Article 30 of the Employment Contract Law and the worker directly institutes a legal action with the people's court in respect of the disputed matter after the people's court has rendered a ruling terminating the debt recovery procedure, the people's court shall inform him/her to first apply to the employment and public personnel arbitration commission for arbitration.

If an application for a payment order is made to a people's court pursuant to Article 16 of the Law on the Mediation and Arbitration of Employment Disputes and the worker directly institutes a legal action with the people's court pursuant to the written mediation statement after the people's court has rendered a ruling terminating the debt recovery procedure, the people's court shall accept such case.

Article 18: If an employment and public personnel arbitration commission renders a final award, the worker applies to a people's court for enforcement and the employer applies to the intermediate people's court of the place where the employment and public personnel arbitration commission is located for vacation of such award, the people's court shall render a ruling staying enforcement of the award.

If the employer withdraws its application for vacation of the final award or its application is rejected, the people's court shall render a ruling to resume enforcement of the award. If the arbitral award is vacated, the people's court shall render a ruling terminating the enforcement.

If an employer, after its application to the people's court for vacation of an arbitral award is rejected, raises an objection to enforcement on the same grounds during the enforcement procedure, the people's court shall not uphold such objection.