Jolene Chen and Teresa Huang
On February 21, 2022, the Ministry of Human Resources and Social Security and the Supreme People’s Court issued the Opinions (I) on Issues Concerning the Connection between Arbitration and Litigation of Labor and Personnel Disputes (hereinafter, the “Opinions (I)”) to provide clearer regulations on strengthening the connection between the arbitration and litigation of labor disputes and strive to achieve a permanent mechanism for the linkage between arbitration and trial, consistency in the scope of acceptance, and unification of hearing standards.
To begin with, the Opinions (I) combine the scope of the cases in which the arbitration award shall be final and binding under the Law on Mediation and Arbitration of Labor Disputes and the Rules for Handling Arbitration of Labor and Personnel Disputes (2017), and more clearly enumerate the scope of cases in which the arbitration award shall be final and binding. For example, the following cases meet the requirement that the arbitration award shall be final and binding if the single award amount does not exceed the amount of 12 months’ pay based on the local minimum wage standard: the wage of a worker who provides regular labor services during the statutory standard work hours; wages for the period of suspension with pay or for sick leave; work injury medical expenses; and other labor remuneration, economic remedy, or compensation.
Secondly, the Opinions (I) also provide for the issue concerning the connection between litigation and arbitration with respect to the handling of evidence used in the arbitration procedure in litigation. Evidence recognized by the parties in the arbitration proceedings is deemed evidence that has been cross-examined at the instructions of the judge during trial. If a party who has the burden of proof pursuant to law submits evidence not submitted in the arbitration during the litigation, the people’s court shall require the party to explain. In arbitration or litigation proceedings, if a party states a fact to its disadvantage or expressly admits a fact to its disadvantage, the other party need not prove it, except in special circumstances. A party that denies the fact that it admitted in the arbitration proceedings shall not be supported by the people’s court, except with the consent of the other party, or for such admittance made under duress or material misunderstanding.
In addition, the Opinions (I) clearly stipulate that if the employer rescinds a labor contract since the worker violates the principle of good faith by providing false educational certificates, personal history, and other basic information directly related to the conclusion of the labor contract, which constitutes fraud, while the worker claims an economic remedy or compensation for the rescission of the labor contract, such a claim will not be supported by an arbitration commission for the labor or personnel disputes and the people’s court.
With regard to the amendments in the Opinion (1), it should be added that the final award of labor disputes only restricts the employer’s right to further file a lawsuit in court, and does not restrict the worker’s right to file a lawsuit in court out of dissatisfaction with the final award, and the system that the arbitration award shall be final and binding still adheres to the concept of protecting workers in the field of labor law. Of course, as far as the protection of the employer’s rights and interests is concerned, the employer can still apply to the intermediate people’s court in the place where the labor dispute arbitration commission is located to set aside the award in accordance with the Law on Mediation and Arbitration of Labor Disputes for specific matters, and if the arbitration award is set aside by the people’s court, the parties can file a lawsuit in the people’s court for the labor disputes within fifteen days after the decision is received.