The draft law states that arbitration verdicts are the final verdict for labor disputes when they regard compensation, payment, work injury medical treatment fees when the total amount is below one year's salary at the lowest monthly salary standard; or on working time, work breaks, vacations and insurance and benefits, or on contracts concerning a group of workers.

After conducting studies on arbitration of labor dispute cases in recent years, law drafters believe that the majority of labor disputes can be solved through arbitration without having to go through complicated judicial procedures. But they also believe that the arbitration results of cases that end with arbitration must be open to judicial supervision. That is to say that parties of disputes can apply to the people's court for the cancellation of arbitration or non-execution.

In order to prevent arbitration authorities from refusing workers' requests for arbitration without justified reasons, which makes judicial relief out of the reach of workers, arbitration applicants can file a lawsuit to the people's court within 15 days after receiving a refusal letter from the arbitration authorities.

A recent report by the NPC Standing Committee demonstrates that the majority of cases whose arbitration requests were refused were filed after the deadline of offering arbitration.

The regulation on handling corporate labor disputes that took effect in 1993 stipulated the deadline for applying for arbitration as six months. The Labor Law that came out in 1994 shortened the deadline to 60 days. However, workers suffering from severe damage to their interests, such as delayed payment, forced overtime work and serious work injuries, often cannot apply for arbitration within 60 days. The result for them under the old system is that they cannot go through the arbitration procedures, and thus cannot get any judicial relief.

Therefore, in order to better protect the legal interests of workers, the draft law has extended the arbitration deadline to six months, starting from the day that dispute parties know or should know that their interests have been harmed.

Since the absolute majority of labor dispute cases are on untimely payment, overwork compensation and the rescission of labor contracts, the mediation organization at the grassroots level should be encouraged to play a bigger role. The draft law states that companies can set up labor mediation committees, consisting of both representatives of labor and management, to solve labor disputes within companies.

In order to enhance the efficiency of mediation and arbitration, the draft law stipulates that mediation is considered a failure if an agreement cannot be achieved within 15 days; arbitration adjudication should be delivered within 30 days after the arbitration court is founded. For complicated cases, the deadline can be extended, but by 15 days at maximum. If the arbitration court fails to deliver a verdict within this period of time, dispute parties can file a lawsuit to the people's court.

Moreover, in order to strengthen the authority of mediation results, the draft law regulates that if companies refuse to enforce the mediation agreement with workers on paying salaries, work injury medical treatment or economic compensation, workers can apply for an enforcement order from the people's court. However, after the court receives a written reply from the company, the enforcement order automatically abates. Under such circumstances, workers can apply for arbitration.

For group cases

An expert on labor dispute arbitration said, "The first reading of the draft law should focus on checking the clarity and briefness of the procedures." He thinks alterations to the draft law should be targeted at shortening the circle of mediation and trial.

Zheng Dongliang, a research fellow with the Ministry of Labor and Social Security, said there is still room for improvement on the draft law. He takes staffing for mediation and arbitration committees as an example. He said the current draft law only outlines the basic qualification for mediators and arbitrators, which is not enough. He said the law should set up a qualification scheme for mediators and arbitrators so that labor disputes can be solved by a stable team of professionals.

"The current law is drafted for solving the labor disputes of individual workers rather than those involving a group of workers. But in reality, a lot of labor disputes concern a group of workers," said Professor Chang Kai of the School of Labor Relations and Human Resources of Renmin University of China. He said his studies revealed that the proportion of group labor disputes against all labor disputes has been on the rise. He said the number of group labor disputes in China is increasing at an annual rate of 3 percent, and stands at around 60 percent of all people involved in disputes. However, the labor dispute solution mechanism in the draft law has failed to design a particular scheme to solve group disputes.

Chang said the law should be based on China's realities and give solving group labor disputes a more prominent position. "If the law remains focused on solving individual labor disputes, in 10 years we will have many problems that cannot be solved under the current legal system," Chang said.