international employment law firm alliance L&E Global

China: Pilot innovation on foreign-related labor dispute handling system in Hainan Province

Foreign-related labor disputed in this Opinion referred to labor disputes in Hainan Province in which the parties are foreigners, employees assigned to work abroad, foreign-invested enterprises (especially those invested by foreign investors), and other situations that could be recognized as foreign-related labor disputes in accordance with laws, regulations and judicial interpretations. In terms of its content, the Opinion mainly includes the following three aspects:

Establishing the foreign-related labor dispute mediation mechanism.  A one-stop model for resolving disputes will be formed by promoting the linkage of multiple mediation centers. In addition, a joint mediation mechanism involving mediation organizations, arbitration institutions, people’s courts, administrative departments and industry authorities as well as the online mediation model will be promoted to improve the efficiency of foreign-related labor dispute handling.

Innovating the foreign-related labor dispute arbitration mechanism.  The first step is to establish a centralized jurisdiction mechanism for foreign-related labor disputes, with the provincial-level and Haikou and Sanya Labor Dispute Arbitration Commissions exercising centralized jurisdiction over foreign-related labor disputes in the province on a trial basis. Also, it is the trend to handle arbitration cases online, such as online application, mediation, case hearing and electronic service of document, etc. to facilitate the parties involved in disputes.  Thirdly, the mechanism of the connection between arbitration and litigation of labor and personnel disputes will be further improved and the standards and scales of legal application of adjudication and trial of foreign-related labor disputes will be gradually unified.

Improving the foreign-related labor dispute prevention mechanism.  Specifically, preventing foreign-related labor disputes at the source through multi-departmental work linkage, guide employers with foreign-related employment to fully implement electronic labor contracts and improve the internal mediation mechanism of enterprises.

According to the Opinion, the institutional mechanism for handling foreign-related labor disputes will be basically established by 2024, to promote specialization and convenience in handling foreign-related labor disputes.

Key Action Points

Employers should ensure the legality and standardization of relevant employment procedures for foreign employees during the employment management. The legal practices of different places should be fully considered when agreeing on termination conditions and severance compensation, etc. in the employment contract.  At the same time, employers should also pay attention to the legislative developments related to foreign employees to prevent possible legal risks.