Another indication of the soft economy is the growing number of labor disputes. The Supreme People’s Court (SPC) has released selected national statistics (chart from linked source), indicating a significant increase in labor disputes. Unfortunately, the SPC did not release a provincial breakdown and the searches necessary to set out such data are relatively time-consuming.
The statistics are divided into labor disputes (劳动) and labor service (劳务) disputes. Labor disputes are disputes which arise because the employee is or should have been employed under the Labor Contract Law.
Labor service disputes
Labor service disputes, which totalled 162,920, an increase of 38.69%. relate to an “independent contractor,” but more often a quasi-employment relationship, governed by the Contract Law and General Principles of Civil Law, under which the laborer has minimal protections. Although an attempt had been made to set forth better legal infrastructure (and protections) for this category of workers, “for a variety of reasons,” more comprehensive legislation has not yet been promulgated. Local courts have identified the following categories of litigants to labor service disputes:
- Migrant construction workers, often hired (without a written contract) by construction contractors or sub-contractors who lack the proper qualifications to be in business, often occurring when the worker has been injured or has not been paid.
- Older workers, who are beyond retirement age. According to a Guangdong court, many small companies hire these workers to reduce their labor costs.
Labor contract disputes
New labor contract disputes accepted by the Chinese courts totalled 483,311 labor dispute cases, up 25.02 percent.For certain categories of labor disputes, the dispute must be first heard by labor arbitration. In an indication of the view of the SPC, its official newspaper, the People’s Court News, has published an article by a judge in a Nanjing court, suggesting that if the employer is in bankruptcy, the employee can sue in court, without resorting to labor arbitration.
Some provincial courts have reported an increase in large scale labor disputes. The Xinjiang High Court, for example, reported retrials of at least 10 labor disputes involving 600 or more persons.
Some lawyers and judges in China have done a further “big data” analysis of labor cases. One of the more relevant and detailed was done by the Guangdong Moreking Law Firm), which in 2015 published a series of charts along with their analysis (but relating to 2014, based on a search of the SPC’s case database). A selection of those charts are set out below (©remains with them).
In 2014, the Guangdong courts accepted 13,168 cases, 80% of which arose in the Pearl River Delta cities of Guangzhou, Shenzhen, Dongguan, Foshan, Zhongshan and Zhuhai (10178).
Comparing Zhongshan (red) and Zhuhai (blue), most cases were in the manufacturing sector, followed by service, transportation, construction, and other inddustries.
In Zhuhai (on left) and Zhongshan (on right), the majority of disputes arose in privately owned companies, followed by foreign invested companies. The authors noted that foreign invested companies tended to have more compliant labor management, with those company represented by lawyers in most cases.
Comparing Zhuhai (blue) and Zhongshan (red), in each location three quarters of litigants were men. Similarly, the Panyu district court (part of Guangzhou), noted the same phenomenon.
Most cases related to termination, followed by payment, with failure to sign a labor contract, social insurance and other reasons far behind.
On disputes over payment, the greatest reason is wage arrears (35%), followed by overtime pay (22%). The Guangdong High Court issued guidance in 2015 enabling lower courts to impose a criminal sentence for wage arrears if certain minimum thresholds are met.
A more comprehensive survey is needed by province, as well as an analysis of the underlying reasons. From the statistics above, and from earlier comments by senior leaders of the SPC, it is clear that labor abuses of migrant construction workers by unscrupulous contractors are widespread, and it is difficult for the legal system to deal with them. The private sector has a far greater incidence of labor disputes, and women are more willing to tolerate ill-treatment at work. Finance Minister Lou Jiwei criticized the Labor Contract Law during this year’s National People’s Congress session, but the numbers reveal significant issues with labor relations in China.