The short answer: arbitration first, then litigation. Labor disputes in China are resolved through a faster, more administrative route than US-style litigation — arbitration is a mandatory precondition to going to court.
Legal basis
- Article 5 of the Labor Dispute Mediation and Arbitration Law: disputes go first to the labor dispute arbitration committee; a party unhappy with the award may sue, unless the law says otherwise.
- Article 47: disputes over wages or severance not exceeding 12 months of the local minimum wage, and disputes over applying national labor standards, are final upon the award.
- Article 50: a party unhappy with a non-final award may file suit within 15 days of receiving the written award.
Key points
- You must apply for labor arbitration before you can sue — a mandatory precondition.
- Some small-value disputes are final upon the award.
- For non-final awards, you have 15 days to file suit.
- If neither side sues, the written award takes legal effect.
Practical tips
- Mind the arbitration time limit (generally one year) and assert rights in time.
- Keep contracts, attendance, payslips, and company rules as routine evidence.
Note for foreign employers
- Settlement is possible at mediation, arbitration, and litigation stages — a written settlement binds more firmly.
Note for foreign employers
- Keep proof of delivery to avoid disputes over interrupted time limits.
- Labor arbitration is free (Article 53 of the Labor Dispute Mediation and Arbitration Law) and court filing costs just RMB 10 per case — low explicit cost, but high time and evidence demands, so keep records.
Understanding the dispute path helps foreign employers assess employment risk and preserve evidence in advance. Need compliance and dispute-prevention support? Contact CRBPO.
About CRBPO
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