Apr 11, 2018 By LegalMiner

A country’s labor market is closely related to its domestic economy, which collectively affect the structures and patterns of labor disputes. As one of the most important links in social relations, labor relations account for one of the largest sources of legal disputes. In 2017, the number of trial-level labor dispute case decisions published in China reached 57,385. The issue of how employees and employers fare in these cases is worth special attention. Factors such as geography, industry and legal representation all bear on the case outcomes. Based on an overall analysis of these labor dispute cases, Legal Miner hereby provides a summary of the general situation of Chinese labor disputes in 2017 and the factors affecting the case outcomes.

Focusing on the labor dispute cases that occurred in 2017, this report does not simply present the macro-level data, but rather identifies and compares the factors influencing dispute outcomes and how they interact. The report does not just list statistics but illuminates the big picture of labor relations by focusing on specific issues.

I. General Situation of Labor Dispute Cases in 2017

(I) General Situation

1. Monthly Distribution of Labor Dispute Cases

According to the data published by China Judgments Online, there were 57,385 trial-level labor dispute cases in Chinese courts in 2017.

Note: The data for this report was collected on January 15, 2018. Given that the court judgments in different regions are released at separate times, and that there exists a time lag between when a judicial decision is made and released, certain data may be omitted from the sample.

2. Regional Distribution of Labor Dispute Cases

In terms of the number of published judgments, seven provinces among the 31 provincial regions in China (exclusive of Hong Kong, Macao and Taiwan) published over 3,000 labor dispute cases in 2017: Jiangsu, Sichuan, Guangdong, Jilin, Shandong, Chongqing and Hunan. Jiangsu province has the highest number of published labor dispute decisions, i.e. 5,139.

3. Processing Time of Labor Dispute Cases

Among all the labor dispute cases, 44,536 cases (77.6%) contain definitive processing time. The most time-consuming case took 3,830 days (i.e. 129 months) to process. This case was accepted on November 30, 2006, and the judgment was not issued until May 26, 2017.

Processing Time:

(II) In-depth Interpretation

1. Specific Causes of Action in Labor Dispute Cases

The number of labor dispute cases concerning employment contracts is 54,600, accounting for 95% of all labor dispute cases.

Note: The same case may involve several causes of action.

2. Application of Substantive Legal Rules in Labor Dispute Cases

The substantive legal rules concerning salaries, compensation and compensation consisting of double damages are the most frequently cited in labor dispute cases.

Article 30 of the Labor Contract Law of the People’s Republic of China was cited in 9,978 cases, thereby making it the most cited provision. It stipulates: “An employer shall, under the contractual stipulations and the provisions of the state, timely pay its employees the full amount of remunerations. Where an employer defers paying or fails to pay the full amount of remunerations, the employees may apply to the local people's court for an order of payment. The people's court shall issue an order of payment according to the law.”

Note: More than one rule may be cited in a given case.

3. Damages in Labor Dispute Cases

The largest damage award was for over RMB 7 million, while the lowest was only RMB 2.83. The average damage award was RMB 50,356.50, and the median was RMB 17,303.44. In other words, over half of labor dispute cases have damage awards over RMB 17,000.

II. An Empirical Study on Labor Dispute Cases Reveals the Factors Affecting Success Rates

(I) Employees’ Status as Plaintiff or Defendant

According to the statistics, employees have a higher rate of success (76%) as plaintiffs. When the employee is the defendant, the winning rate is relatively low (65%) but still exceeds 50%.

(II) Legal Representation

Employees have the highest success rate (91%) when they have a legal representative or agent and the employer does not. When the employee lacks any agent but the employer has one, the employee has the lowest success rate – only 67%. Generally, hiring an agent has a positive impact on the result of the case.

(III) Specific Type of Legal Representation

Comparing employees’ success rates with various types of legal representation revealed that employees have the highest success rate when their representative is provided through the legal aid system, whether that individual is a lawyers or non-lawyer. Particularly, non-lawyers provided through the legal aid system have the highest success rate (92%) of any type of representative.

On the other hand, when employers hire lawyers as their legal representative, the success rate for employees is the lowest at 65%.

(IV) Regional Distribution of the Cases

Our analysis of the labor dispute cases published in 2017 revealed great regional variation.

Among all provinces with over 500 published judgments, employees in Guangxi, Jilin, and Shandong have the highest success rates, exceeding 80%. Employees in Shanghai, Xinjiang and Hunan have the lowest success rates. The gap between the highest success rate for employees (Guangxi) and lowest (Hunan) is 22%.

Based on the published labor cases in 2017, it can be inferred that the courts in Guangxi, Jilin and Shandong are relatively friendly to employees.

(V) Industry Distribution

The type of industry exerts a huge impact on the results of labor dispute cases. The success rate gap between different industries can be as high as 56%.

According to the statistics, employees from the mining, agriculture, wholesale and retail, and technology industries have relatively higher success rates, which exceed 80% and are above average for all industries. In the electricity, heating, gas and water production and supply, and financial industries, the success rates of employees are 50% or less. Employees in the financial industry have a success rate of only 29%. In other words, less than one-third of financial industry employees won their labor dispute cases in 2017.

(VI) Specific Causes of Action

According to the statistics, the type of labor dispute may also affect the outcome. Legal Miner analyzed cases concerning social insurance, welfare and benefits, and employment contracts, finding that the employee success rate is the lowest in disputes concerning welfare and benefits. Employees have the highest success rate (82%) in disputes concerning social insurance. It can be inferred that the courts strongly support social insurance for employees, but remain relatively cautious when dealing with the employee remuneration and benefits.

III. Conclusion

Litigation is the last resort when disputes arise between employees and employers. Analyzing this data can contribute to a better understanding of the judgments being issued by courts, and are also an important method for studying the general situation of labor relations.
This study and its findings are limited to some extent by research methodology and sample size. Legal Miner will gradually improve the scope and accuracy of data collection and provide better analysis in the future.

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