The Process of Labor Arbitration in Shenzhen

Reference Materials

• Labor Contract Law of the People’s Republic of China
  Refer to Articles 30, 47, 48, 85, 87, 88, 90, and 91

• Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Criminal Cases of Refusing to Pay Labor Remuneration

• Rules for Handling Labor and Personnel Dispute Arbitration Cases

• Rules on the Organization of Labor and Personnel Dispute Arbitration

• Provisions of the Supreme People’s Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement

Lookup Websites

• China Judgements Online
• National Court Litigation Activity Notification Platform (currently in trial operation)
• People’s Court Announcement Network
• Judge Reporting Center
• China Enforcement Information Disclosure Network (you can check the progress of your application for enforcement)

Note: If the company you signed the contract with and the company you actually work for are not the same company, and your social insurance is not paid by either of those two companies, then winning such an arbitration is unlikely…

In Shenzhen you can go directly through the WeChat official account: 深圳人社 -> HR and Social Security Services -> Palm Services, where at the very bottom there is an E-Arbitration service. Log in there and fill in the information online (choose based on the registered office address on the company’s business license; Shenzhen regulations require that if the registered capital exceeds 10 million yuan or the company is a Shenzhen group enterprise, you must select a municipal-level arbitration institution). The grounds are generally matters such as claiming labor remuneration, compensation, and so on. After your application succeeds, it will show what materials you need to prepare (proof of social insurance relationship, salary bank statements, etc.) to confirm the labor relationship. Generally the arbitration office will contact you within one working day.

Note: If there are more than ten people, you can apply for collective arbitration, which requires three representatives; later these three representatives will become the main persons in charge.

If they can’t pay wages, mediation is not recommended — the process is very slow. Whenever the wages are paid, then mediate.

Arbitration Materials

• Proof of social insurance enrollment: log in and check at Shenzhen Municipal Human Resources and Social Security Bureau -> Shenzhen Municipal Social Insurance Fund Management Bureau; there is a social insurance certificate inside that you can print. I won’t go into the specifics. (2 copies)
• Bank salary statements — bank salary statements can be printed at a bank’s self-service terminal (2 copies)
• Photocopy of your ID card (2 copies)
• Labor contract (if you have one, photocopy two copies and bring them — do not hand in the original labor contract)

Arbitration Matters

According to Article 33 of the Labor Contract Law of the People’s Republic of China: if an employer changes its name, legal representative, main person in charge, or investors and other such matters, this does not affect the performance of the labor contract. Therefore, whatever happens to the company does not affect the performance of the Labor Contract Law.

Basis for Applying for Arbitration

• Article 40　Under any of the following circumstances, the employer may terminate the labor contract after notifying the worker in writing 30 days in advance, or after paying the worker an additional month’s wages:
  (1) The worker is ill or injured for non-work-related reasons and, after the prescribed medical treatment period expires, is unable to perform the original work, and is also unable to perform other work arranged by the employer;
  (2) The worker is incompetent for the job and, after training or a job reassignment, remains incompetent for the job;
  (3) The objective circumstances on which the labor contract was concluded changed significantly, making it impossible to perform the labor contract, and no agreement on amending the labor contract could be reached after consultation between the employer and the worker.

• Article 46　Under any of the following circumstances, the employer shall pay economic compensation to the worker:
  　 (1) The worker terminates the labor contract in accordance with Article 38 of this Law;
  　 (2) The employer proposes terminating the labor contract in accordance with Article 36 of this Law, and the labor contract is terminated upon reaching consensus with the worker through consultation;
  　 (3) The employer terminates the labor contract in accordance with Article 40 of this Law;
  　 (4) The employer terminates the labor contract in accordance with Article 41, paragraph 1 of this Law;
  　 (5) The fixed-term labor contract is terminated in accordance with Article 44, item 1 of this Law, except where the employer maintains or raises the conditions agreed in the labor contract to renew the labor contract and the worker does not agree to the renewal;
  　 (6) The labor contract is terminated in accordance with Article 44, items 4 and 5 of this Law;
  　 (7) Other circumstances provided for by laws and administrative regulations.

• Article 47　Economic compensation shall be paid to the worker at the rate of one month’s wages for each full year the worker has worked for this employer. For a period of six months or more but less than one year, it shall be counted as one year; for less than six months, the employer shall pay the worker economic compensation of half a month’s wages.

　　If the worker’s monthly wage is higher than three times the average monthly wage of workers in the region for the previous year as published by the municipal people’s government of the municipality directly under the Central Government or of the city divided into districts where the employer is located, the standard for paying economic compensation to that worker shall be three times the average monthly wage of workers, and the number of years for which economic compensation is paid shall not exceed twelve years.

　　The monthly wage referred to in this Article means the worker’s average wage for the twelve months preceding the termination or ending of the labor contract.

• Article 48　If the employer terminates or ends the labor contract in violation of this Law and the worker requests continued performance of the labor contract, the employer shall continue to perform it; if the worker does not request continued performance of the labor contract, or the labor contract can no longer be performed, the employer shall pay compensation in accordance with Article 87 of this Law.####

• Article 87　If the employer terminates or ends a labor contract in violation of this Law, it shall pay the worker compensation at twice the economic compensation standard provided in Article 47 of this Law.

• Article 85　If an employer falls under any of the following circumstances, the labor administrative department shall order it to pay the labor remuneration, overtime pay, or economic compensation within a specified time limit; if the labor remuneration is lower than the local minimum wage standard, the difference shall be paid; if payment is not made within the time limit, the employer shall be ordered to pay the worker additional compensation at the rate of not less than 50% and not more than 100% of the amount payable:

　　(1) Failing to pay the worker labor remuneration in full and on time as agreed in the labor contract or as provided by state regulations;

　　(2) Paying the worker wages below the local minimum wage standard;

　　(3) Arranging overtime work without paying overtime pay;

　　(4) Terminating or ending a labor contract without paying the worker economic compensation in accordance with this Law.

Generally, whichever of the above articles apply should be written into the arbitration application; you can write the application yourself and print it out. The above legal information is for reference only

Once you’ve confirmed things with the arbitration office, you can prepare the above materials and go to the arbitration committee to take a number and submit the materials directly.

After submitting the materials that day, you will receive a notice of case acceptance in about a week, either by mail or by picking it up from the arbitration committee. After that, in about a month you will receive a notice of hearing, confirming the hearing time. At this stage, if you are confident of winning you don’t need to apply for a free lawyer (a labor lawyer paid for by the state) — either way it takes half a day, and being present yourself is perhaps better.

Lawyer’s assistance You can go to the WeChat mini program 粤省事, search for legal aid, and apply for legal aid at the legal aid office of whichever district the arbitration is in. As for exactly what materials you need to bring, work it out over the phone with the legal aid office.

If your hearing claims include overtime, you need to provide proof of overtime. It can be emails, application slips, or the like — bring anything that counts as evidence, for confrontation in court. During the arbitration process, don’t expect the arbitrator to be biased in your favor; you must present evidence and the basis in labor law according to your own claims.

Final Award After receiving the arbitration award, if you plan to apply for enforcement, photocopy the award four or five times and have the arbitration committee stamp them. Generally after 15 days you can apply to the court for enforcement; you can handle the application for enforcement online at the Guangdong Court Litigation Service Network (online is relatively slow). If you’re in a hurry, just go to the district court early in the morning and take a number and queue.

If they can’t pay wages, mediation is not recommended — the process is very slow. Whenever the wages are paid, then mediate.

Applying for Enforcement

• Original arbitration award (1 copy), photocopies (2 copies)
• Photocopy of the applicant’s ID card (2 copies)
• Information on the respondent (2 copies of the business license)
• Application (note: wages + compensation or damages + doubled interest recovery) (2 copies)
• Applicant’s service address form (2 copies)

• Respondent’s service address form (2 copies)

  When you apply for enforcement at the court, go to the self-service machine on the first floor and write down the phone numbers of the judges in the enforcement bureau (if you don’t note them down, it will be rough later when you file for enforcement and try to proactively communicate with and hurry the judge — even though there are phone numbers, they’re often busy). There are usually two landlines. Register on the China Enforcement Information Disclosure Network and you can check the case’s progress. Take the time to nudge the judge handling your enforcement application, but don’t speak too aggressively. If the judge has already frozen the company’s account and you still haven’t recovered the money: if it’s a branch company, just apply to the judge to add the head office; if the head office is added and there is still no money in the account, go to the case filing hall and apply to add the company’s legal representative and shareholders.

  Adding the Legal Representative and Shareholders

  Adding the legal representative and shareholders requires providing the legal representative’s ID information and information on whether the shareholders’ capital contributions to the company are subscribed capital or paid-in currency. The legal representative’s ID information and the shareholders’ contribution information can be obtained by going to the 深圳市场监督 WeChat official account: Consultation and Reporting -> Archive Query Appointment, to book a time to look up the company’s records. You need to bring your own ID card and the case filing materials notice from the court’s filing window — you collect this at the court filing window (bring the business license of the company where the legal representative works or has served as legal representative). Write down your name, ID card, and the name of the company you’re looking up (look up the legal representative’s companies in advance, and it’s best to write down several of the legal representative’s companies). The company records all contain the legal representative’s ID information, and the shareholders’ contribution information is in the company’s articles of association.

Basis for Adding the Person Subject to Enforcement

Once you’ve looked up the information you can go to the court to file, applying to add the person subject to enforcement. The application to add is based on the Provisions of the Supreme People’s Court on Several Issues Concerning the Change and Addition of Parties in Civil Enforcement:

• Article 7 When a legal person or other organization that is the applicant for enforcement is liquidated or goes bankrupt, and the rights determined by the effective legal instrument are lawfully allocated to a third party, if that third party applies to change or add itself as the applicant for enforcement, the people’s court shall support it.
• 　Article 15 If a branch of a legal person that is the person subject to enforcement cannot pay off the debt determined by the effective legal instrument, and the applicant for enforcement applies to change or add that legal person as the person subject to enforcement, the people’s court shall support it. If the property for which the legal person is directly responsible still cannot pay off the debt, the people’s court may directly enforce against the property of the legal person’s other branches.
  If a legal person that is the person subject to enforcement cannot pay off the debt determined by the effective legal instrument out of the property for which it is directly responsible, the people’s court may directly enforce against the property of that legal person’s branches.
• Article 17 If an enterprise legal person that is the person subject to enforcement has insufficient property to pay off the debt determined by the effective legal instrument, and the applicant for enforcement applies to change or add as the person subject to enforcement a shareholder or capital contributor who has not paid, or has not fully paid, its capital contribution, or a promoter who bears joint and several liability for that contribution under the Company Law, to bear liability according to law within the scope of the capital contribution not yet paid, the people’s court shall support it.
• Article 18 If an enterprise legal person that is the person subject to enforcement has insufficient property to pay off the debt determined by the effective legal instrument, and the applicant for enforcement applies to change or add as the person subject to enforcement a shareholder or capital contributor who withdrew its capital contribution, to bear liability within the scope of the withdrawn capital contribution, the people’s court shall support it.
• Article 19 If a company that is the person subject to enforcement has insufficient property to pay off the debt determined by the effective legal instrument, and its shareholder transferred its equity without lawfully performing its capital contribution obligation, and the applicant for enforcement applies to change or add as the person subject to enforcement that former shareholder, or a promoter who bears joint and several liability for that contribution under the Company Law, to bear liability within the scope of the contribution not lawfully made, the people’s court shall support it.
• Article 21 If a company that is the person subject to enforcement completes deregistration without liquidation, making liquidation of the company impossible, and the applicant for enforcement applies to change or add as the person subject to enforcement the shareholders of a limited liability company, or the directors and controlling shareholders of a joint stock company, to bear joint and several liability for the company’s debts, the people’s court shall support it.

• Article 22 If a legal person or other organization that is the person subject to enforcement is deregistered, or grounds for dissolution such as revocation of its business license, being dissolved, being ordered to close, or suspension of business arise, and its shareholders, capital contributors, or competent department accept its property without compensation, such that the person subject to enforcement has no remaining property or the remaining property is insufficient to pay off the debt, and the applicant for enforcement applies to change or add as the person subject to enforcement that shareholder, capital contributor, or competent department, to bear liability within the scope of the property accepted, the people’s court shall support it. (Add this article if the company has been deregistered)

  The above legal information is for reference only

If they can’t pay wages, mediation is not recommended — the process is very slow. Whenever the wages are paid, then mediate.

Even if you ultimately can’t recover the money, credit reporting is quite well developed now — an individual having a litigation case record will automatically be entered into the credit reporting system, and once you’re on the list of untrustworthy persons it’s not just restrictions on high-end consumption. Furthermore, the Shenzhen labor bureau (I’m not sure about other cities) has a wage fund used to advance wages; if in the end the court cannot recover the money either, you can apply for wage advancement

Don’t be afraid of trouble, and don’t be afraid of how long it takes. Defending your rights is about your own hard-earned money, nothing else. If you’re afraid of hassle, then just don’t apply for arbitration in the first place.

Finally, I wish everyone forced to apply for arbitration to defend their rights a speedy recovery of their hard-earned money.

The above information is for reference only and differs somewhat from actual practice. If anyone uses this information to do anything illegal, they bear the consequences themselves.