Collective labour disputes involving strikes

By Yvonne Lu, MHP Law Firm
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The Standing Committee of the National People’s Congress approved the International Covenant on Economic, Social and Cultural Rights in February 2001. The fourth item of paragraph 1 of article 8 of the covenant above provides that employees have the right to strike, and such right must be performed pursuant to the laws of each country.

陆怡红 Yvonne Lu 君悦律师事务所 顾问 Counsel MHP Law Firm
Yvonne Lu
MHP Law Firm

However, articles in the international covenants cannot be directly applied in China. Judicial authorities are not able to judge the lawfulness of strikes according to article 27 of the Trade Union Law either. It could be deemed that there are no laws or regulations regarding rights to strike in China.

Strike is one of the employees’ action models in collective labour disputes. Collective labour disputes refer to the generic term of occurrent collective rights and interests disputes. According to statistics from researchers, employees’ five action models during collective labour disputes are as follows: petition letters and visits; strikes; blocking the roads; blocking the factories and gathering; whistle-blowing or complaints.

The main methods for dealing with collective labour disputes involving strikes are negotiation, mediation, labour arbitration and litigation. Generally speaking, employees will negotiate and mediate with employers while strikes are ongoing. Labour administrative departments and trade unions, if any, will participate, and police departments at all levels will provide positive co-operation to negotiations and mediation.

The employees and the employer will endeavour to reach an agreement, or the employees will waive their rights or withdraw their interest claims and return to work voluntarily. If the mediation between the employees and the employer fails during the non-litigation stage, it is highly likely that the employees will file a labour arbitration. The party that is not satisfied with the labour arbitration award can further appeal to the court.

Different results of the employers in the following collective labour dispute cases involving strikes are representative.

The employer terminates the employment relationship with all the employees participating in the strike. In one labour dispute arbitration that the author and a colleague represented as attorneys at the Shanghai Representative Office of an overseas-listed company’s subsidiary, we provided sufficient proof regarding the fact of a strike and the company’s policies. We showed that the employees’ behaviour regarding striking severely violated the employer’s policies and professional ethics. The employer terminated the employment contracts with all the employees accordingly.

In the end, the labour dispute arbitration committee in a district in Shanghai affirmed the fact of the strike and, according to article 3 of the Labour Law, denied seven applicants’ requests that included resuming their employment relationship and continuing to perform their employment contracts, based on the reason that the employees must comply with labour disciplines and professional ethics. We gained a complete victory on behalf of our client and saved the overseas listed company’s commercial goodwill.

The employer only terminates the employment relationship with strike leaders. In another case, the court ascertained that, according to the employer’s management regulations, the company can terminate the employee(s) inciting sabotage or strikes immediately as a penalty (without any severance or compensation).

The employees had already signed and accepted the above-mentioned regulations. The court admitted the evidence provided by the employer, which proved that one employee did violate the disciplines by participating in the strike and playing a leading role, and, therefore, according to item 2 of article 39 of the Labour Contract Law, denied the employee’s claim requesting the employer to pay severance for wrongful dismissal.

The employers lose the lawsuits. In a case presided by Suzhou Intermediate People’s Court in Jiangsu province, although the attendance management policy was in favour of the employer, the court did not admit the fact of the strike, which led to the employer losing the lawsuit.

In a case presided by Dongguan Intermediate People’s Court in Guangdong province, the court affirmed the fact that the employees participated in the strike for two days, which was not sufficient to prove that the employees had violated the employer’s policies, such as actively participating in the strikes, sabotage and demonstrations blocking the streets. Therefore the employees did not severely violate the disciplines, and the employer lost the lawsuit.

Regular patterns

For Chinese employees, striking is a common method to collectively safeguard their legal rights. In China, there is no legal basis to protect the right to strike, and no detailed specification regarding the exercise of such a right. Therefore, there is a legal risk for employees to organize, incite and participate in a strike, and the risk is uncertain.

For employers, the following regular patterns can be found based on the
above precedents.

In the event of strikes, employers usually claim that the striking employees violate the company policies, and take item 2 of article 39 of the Labour Contract Law as a legal basis to unilaterally terminate the contract relationship with the employees.

Employers have the burden of proof for labour disputes arising out of decisions regarding termination of employment contracts. Employers must prove: (1) which company policies regulate the circumstances of severely violating employer policies; and (2) the fact that the employees have severely violated the above-mentioned policies.

When the employees challenge the lawfulness of company policies, the employers must further prove: (1) from the perspective of legal process, whether they made the policies through appropriate procedures; and (2) from the perspective of substantial law, whether the policies violate any laws or regulations.

Whether strikes violate Chinese laws or regulations from the perspective of substantial law returns to the subtle circumstance of the right to strike referred to at the beginning of this article. Only inciting strikes and enforcing strikes by violence are recognized as severely violating the disciplines by the employers in the above-mentioned cases. For many companies, there is no such provision regulated in their company policies.

Yvonne Lu is a counsel at MHP Law Firm

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