New rules instruct enterprises to address rights and interests of workers

New rules instruct enterprises to address rights and interests of workers

The Ministry of Human Resources and Social Security published on 30 November 2011 the The Negotiation and Mediation of Labour Disputes in Enterprises Provisions which came into force on 1 January.

The provisions were enacted pursuant to China’s Labour Dispute Mediation and Arbitration Law, and relate to various issues such as ensuring workers have channels to voice their opinions to the company, strengthening of the structure of mediation agreements, and the creation of a labour dispute mediation committee.

In-house communication

Article 4 of the provisions states that a channel for dialogue should be established between employers and employees in order to facilitate the communication of workers’ opinions. If a worker believes an enterprise is acting improperly in performing an employment contract or enforcing labour laws, he or she may make a request to a labour dispute mediation committee, which should promptly follow up the request and solve the problem. The mediation committee should also promptly convey to the enterprise workers’ other reasonable requests.

Negotiating period

If one party makes a request to negotiate, the other party must respond within five days, failing which he or she will be deemed reluctant to negotiate. The negotiating period must be agreed in writing by both parties. If the parties cannot completely resolve negotiations within the agreed period, they may agree in writing to extend the period.

Reconciliation agreement

According to Article 11, a reconciliation agreement entered into by the parties following successful negotiations is legally binding upon both parties.

Furthermore, the reconciliation agreement can also serve as a basis for arbitration. If the process and particulars of the reconciliation are lawful and valid, they may be used as evidence by an arbitral tribunal. However, if one party agrees a set of disputed facts in order to reach a compromise with the other party for the purposes of arriving at a reconciliation, that may not be used as evidence against that party in any subsequent arbitration.

Establishment of mediation committee

Under Article 13, large and medium-sized enterprises are required to set up a mediation committee. Enterprises with branch offices or branch companies may set up mediation committees in their branches as needed. The mediation committee at the headquarters should guide mediation committees at the branches in preventing and mediating labour disputes.

Article 14 provides that small and micro enterprises are permitted to set up mediation committees. Both the enterprise and workers may also jointly elect officers to perform mediation.

Composition of mediation committee

In accordance with Article 15, the number of employer and employee representatives on the mediation committee must be identical from the time when the committee is formed.

Workers’ representatives should be members of the trade-union committee or be elected by all workers. Employer representatives should be designated by the person in charge of the enterprise. The director of a mediation committee should be a trade union committee member or a person elected by both parties.

Duties of mediation committee

In accordance with Article 16, mediation committees should discharge the following major functions: mediate labour disputes within enterprises; supervise the performance of reconciliation and mediation agreements; participate in the coordination of problems arising from the performance of labour contracts and collective contracts; participate in the study of major proposals involving workers’ vital interests; and assist enterprises in establishing an early warning mechanism for the prevention of labour disputes.