Announcement of the Supreme People's Court

The Interpretation of the Supreme People's Court on Some Issues concerning the Application of Laws for the Trial of Labor Dispute Cases (II), which has been adopted at the 1393rd session of the Judicial Committee of the Supreme People's Court on July 10, 2006, is hereby promulgated and shall go into force as of October 1, 2006.

The Supreme People's Court

August 14, 2006

Judicial Interpretation [2006] No. 6

For the purpose of correctly trying labor dispute cases , according to the Labor Law of the People's Republic of China, the Civil Procedure Law of the People's Republic of China and the provisions of other relevant laws , in combination with the civil trial practice, a supplementary interpretation on some issues concerning the application of laws for the trial of labor dispute cases by the people's court is made as follows,:

Article 1 Any of the following circumstances shall be regarded as the "date when the labor dispute arises" as stipulated in Article 82 of the Labor Law when the people's court tries a labor dispute case:

1. In the case of a wage payment dispute arising during the existence of labor relationship, if the employer can prove that it has delivered a written notice on refusing to pay the wage to the laborer, the date when the labor dispute arise shall be the date when the written notice is served s; otherwise, it shall be the date when the laborer claims for his rights;
2. In the case of a dispute arising due to the dissolving or termination of labor relationship, if the employer can not prove the time when the laborer receives a written notice on dissolving or terminating the labor relationship, the date when the labor dispute arises shall be the date when the laborer claims for his rights; and
3. In the case of a dispute over the payment of wages, economic compensations or welfare treatments, etc. arising after the labor relationship is dissolved or terminated, if the laborer can prove the time when the employer promises to make payment is any concrete date after the labor relationship is dissolved or terminated, the date when the labor dispute arises shall be the date when the employer promises to make payment; otherwise, it shall be the date when the labor relationship is dissolved or terminated .

Article 2 With respect to a dispute over the default on wages, if the labor relationship still continues when the laborer applies for arbitration, and the employer claims not to make payment for the reason that it has been over 60 days when the laborer applies for the arbitration, the people's court shall not support the claim, unless the employer can prove that the laborer has received a written notice on refusing to pay the wage.

Article 3 If a laborer, by using a wage IOU issued by the employer as the evidence, directly file a suit at the people's court, and the claims are not concerned with any other dispute over labor relationship, it shall be regarded as a dispute over the default on labor remunerations and shall be accepted as a common civil dispute.

Article 4 With respect to a dispute between an employer and any of its laborers over whether or not the labor relationship has been dissolved or terminated or whether the economic compensation should be paid for the dissolving or termination of labor relationship, if either party concerned files a suit in accordance with law upon an arbitration of the labor dispute arbitration commission, the people's court shall accept it.

Article 5 With respect to a dispute arising when a laborer requests his employer to return the earnest money, caution money, mortgage money or guaranties for the labor contract collected by the latter or when the laborer transacts the formalities for transferring personnel archives or social insurance relations, etc. after the dissolving or termination of the labor contract between them, if either party concerned files a suit in accordance with law after the labor dispute arbitration commission makes an arbitration award , the people's court shall accept it.

Article 6 With respect to a dispute arising when a laborer requests his employer to grant the treatment of the insurance against the work-related injury due to a work-related injury or occupational disease, if either party concerned files a suit in accordance with law after the labor dispute arbitration commission makes an arbitration award, the people's court shall accept it.

Article 7 The following disputes shall not be regarded as labor disputes:

1. a dispute arising when a laborer requests for the social insurance handling institution to grant social insurance money;
2. a dispute over the transfer of public-owned houses between a laborer and his employer due to the housing system reform;
3. a dispute arising when a laborer make an objection to the injury grade appraisal conclusion made by the labor capacity appraisal committee or to the occupational disease appraisal conclusion made by the occupational disease diagnosis and appraisal committee;
4. a dispute between a family or individual and a housekeeping service provider;
5. a dispute between a private craftsman and his helper or apprentice; and
6. a dispute over a contracting farm household and his employees.

Article 8 If any party concerned is not satisfied with the arbitration award made by the labor dispute arbitration commission on the advanced payment of part of wages or medical expenses to the laborer and files a suit at the people's court, the people's court shall not accept it.

If the employer fails to perform the obligation of payment mentioned in the aforesaid arbitration, and the laborer thus applies with the people's court for compulsory execution according to law, the people's court shall accept it.

Article 9 With respect to a labor dispute case arising between a laborer and an self-employed household with a business name, the people's court shall take the business name registered in the business license as the party concerned, and simultaneously, shall clearly indicate the natural conditions of the owner of the said business name.

Article 10 In case a laborer files a suit due to the performance of a labor force dispatching contract, the dispatching unit shall be the defendant; and in the case that the dispute concerns the recipient unit, the dispatching unit and the recipient unit shall be codefendants.

Article 11 Where both the laborer and the employer are dissatisfied with the same arbitration award made by the labor dispute arbitration commission and files suits at the same people's court, the people's court shall handle it as a single case, and both parties are the plaintiff and the defendant of each other. During the course of litigation, if one party concerned withdraws the action, the people's court shall continue to try the case in light of the other party's claims.

Article 12 In case either party concerned can prove that it is unable to apply for the arbitration due to force majeure or any other objective reason during the course of the arbitration application, the arbitration application term shall be cognized to be suspended by the people's court, and shall continue to be calculated after the day when the reason for the said suspension is removed.

Article 13 If either party concerned can, within the arbitration application term, prove any of the following circumstances, the people's court shall cognize the discontinuity of the arbitration application term:

1. Claiming rights against the other party;
2. Requesting to the relevant department for right relief; or
3. The other party being consent to perform its obligation.

If the arbitration application term discontinues, the arbitration application term shall be recalculated from the date when the other party clearly refuses to perform its obligation, or the relevant department makes a disposal decision or shows clearly that it will not handle it.

Article 14 In case a laborer files an application to the people's court for taking measures for property preservation during the course of litigation, if it finds upon examination that the applicant really has economic difficulties or there are evidences showing that the employer may abscond with default of wages, the people's court shall alleviate or exempt the laborer from the obligation to provide guaranty and timely take measures for property preservation.

Article 15 The people's court shall notify the party concerned to file an application for compulsory execution within 3 months after the arbitration award of the labor arbitration organ or the judgment of the people's court comes into force in the property preservation ruling it rendered. If the party concerned fails to apply for compulsory execution within the time limit, the people's court shall render a ruling to cancel the preservation measures.

Article 16 Where the internal rules and system formulated by an employer differ from the contents stipulated in the collective contract or labor contract, and the laborer requests that stipulations in the contract shall be applied with priority, the people's court shall support it.

Article 17 An intercession agreement reached under the presiding of the labor dispute intercession commission with contents of labor rights and obligations has the binding force of a labor contract and can be the basis for the people's court's judgment.

Where the parties concerned only reach an intercession agreement on labor reward under the presiding of the labor dispute intercession commission, if the employer fails to perform the payment obligation stipulated in the intercession agreement and the laborer directly files a suit at the people's court, the people's court can accept it as a common civil dispute.

Article 18 The present Interpretation shall go into force as of October 1, 2006. If any relevant judicial interpretations promulgated by this court before the present Interpretation is implemented differ from the provisions of the present Interpretation, the latter shall prevail.

After the present Interpretation is implemented, the cases at the first or second instance that have not been settled by the people's court shall be governed by the present Interpretation. The cases that have been settled before the implementation of the present Interpretation shall not be retried in light of the present Interpretation.