Labor Arbitration for Foreign Employees in China

Foreign employees in China have the right to labor arbitration for employment disputes. This guide covers the arbitration process, common claims, and strategies for successful resolution.

Understanding Labor Arbitration

What is Labor Arbitration?

• Mandatory first step for employment disputes
• Free government-provided dispute resolution
• Binding decisions on both parties
• Alternative to court litigation

Legal Framework

• Labor Contract Law
• Labor Dispute Mediation and Arbitration Law
• Labor Law
• Social Insurance Law

Common Labor Disputes

Wage and Compensation Issues

• Unpaid wages or overtime
• Bonus and commission disputes
• Salary reduction without consent
• Delayed payment of wages

Contract Termination Disputes

• Illegal termination claims
• Severance pay disputes
• Notice period violations
• Constructive dismissal

Social Insurance Disputes

• Failure to pay social insurance
• Incorrect contribution base
• Housing fund disputes
• Medical insurance claims

Eligibility and Jurisdiction

Who Can File

• Foreign employees with work permits
• Employees of Chinese companies
• Workers in foreign-invested enterprises
• Representative offices employees (limited)

Jurisdiction Rules

• Location of employer's registration
• Place where labor contract performed
• Employee's domicile (in some cases)
• Specific arbitration commission rules

Time Limitations

Statute of Limitations

• General rule: 1 year from dispute arising
• Wage disputes: No limitation during employment
• Social insurance: 1 year from knowledge of violation
• Termination disputes: 1 year from termination

Calculation of Time Limits

• When employee knew or should have known of rights violation
• Interruption and suspension of limitations
• Continuing violations doctrine
• Force majeure exceptions

Filing Procedures

Required Documents

• Arbitration application form
• Copy of ID/passport
• Employment contract
• Evidence supporting claims
• Employer's business license copy

Application Content

• Parties' basic information
• Arbitration claims and facts
• Legal basis for claims
• Evidence list
• Specific relief sought

Evidence Collection

Types of Evidence

• Employment contracts and amendments
• Wage payment records
• Work attendance records
• Email and message communications
• Witness testimony

Evidence Preservation

• Document all workplace incidents
• Keep copies of important documents
• Screenshot electronic communications
• Obtain witness contact information
• Notarize key evidence if necessary

Arbitration Process

Case Acceptance

1. Submit application to arbitration commission
2. Commission reviews within 5 days
3. Accept case or issue rejection notice
4. Serve copy of application to employer
5. Employer files defense within 10 days

Hearing Procedures

1. Arbitration panel formation (1 or 3 arbitrators)
2. Hearing notice (5 days advance)
3. Opening statements by both parties
4. Evidence presentation and cross-examination
5. Final arguments and closing statements

Mediation Opportunities

Pre-arbitration Mediation

• Company internal grievance procedures
• Trade union mediation
• People's mediation committees
• Professional mediation organizations

Arbitration Mediation

• Arbitrator-led settlement discussions
• Voluntary participation
• Confidential negotiations
• Binding mediation agreements

Arbitration Awards

Types of Awards

• Final awards (non-appealable cases)
• Partial awards (interim decisions)
• Default awards (non-appearance)
• Consent awards (settlement agreements)

Award Content

• Factual findings
• Legal analysis
• Specific remedies ordered
• Cost allocation
• Enforcement instructions

Appeal Rights

Cases Subject to Appeal

• Claims exceeding local wage standards
• Working time and rest period disputes
• Safety and health violations
• Most contract termination cases

Non-appealable Cases

• Small wage claims (below threshold)
• Working time disputes under 12 months
• Certain social insurance disputes
• Specific statutory violations

Enforcement of Awards

Voluntary Compliance

• 15-day compliance period
• Payment verification procedures
• Compliance monitoring
• Receipt and acknowledgment

Court Enforcement

• Application to people's court
• Asset seizure and freezing
• Wage garnishment
• Business license restrictions

Special Considerations for Foreigners

Language Issues

• Right to interpreter services
• Document translation requirements
• Bilingual legal representation
• Cultural communication barriers

Visa and Work Permit Issues

• Impact on visa status during proceedings
• Work permit renewal considerations
• Exit restrictions during disputes
• Employer retaliation risks

Costs and Fees

Arbitration Costs

• No filing fees for employees
• Free arbitration services
• Translation costs (if needed)
• Legal representation fees

Cost Recovery

• Limited cost shifting
• Attorney fees generally not recoverable
• Exceptional circumstances exceptions
• Settlement negotiation leverage

Strategic Considerations

• Timing of claim filing
• Settlement vs. arbitration decision
• Evidence strength assessment
• Employer's financial condition
• Career and visa implications