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New Interpretation of the Supreme People's Court on the Application of Law in the Trial of Labor Disputes

2021-01-19

On December 29, 2020, the Supreme People’s Court announced the Decision on Abolishing Certain Judicial Interpretations and Related Normative Documents (Fa Shi [2020] No. 16) and decided to implement the Civil Code on January 1, 2021. On the same day, 116 judicial interpretations and related normative documents including the Interpretation of the Supreme People’s Court of Several Issues on the Application of Law in the Trial of Labor Dispute Cases (I to IV) (the Original Interpretations) were abolished. With the abolition of the Original Interpretations, the Supreme People’s Court also officially announced on December 29, 2020 the Interpretation of the Supreme People's Court on Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (I) (Fa Shi [2020] No. 26) (the New Interpretation) to replace the Original Interpretations and become the new criterion for the people’s courts for labor dispute cases. What are the changes and highlights of the New Interpretation compared with the original ones? This article aims to bring a quick understanding of some main points for the readers.
 
1. Clarifies the role of Civil Code in labor disputes
The biggest highlight of the New Interpretation comes from its legislative purpose. The Supreme People’s Court introduce this New Interpretation with the following statement:
In order to correctly try labor dispute cases, this Interpretation is formulated in accordance with the Civil Code of the People's Republic of China, the Labor Law of the People's Republic of China, the Labor Contract Law of the People's Republic of China, the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes, the Civil Procedure Law of the People's Republic of China and other relevant laws and in light of trial practice."
Compared with the provisions of the Original Interpretation, the New Interpretation clearly list the Civil Code as the legal basis for the People's Courts to hear labor dispute cases which ends the discussion between the theoretical and practical circles of labor law experts on whether the Civil Code is applicable to labor cases.
 
2. Compiles the Original Interpretations
The new interpretation contains a total of 54 articles. Except article 54 which states the effective date, the remaining 53 are basically a compilation of the articles from the Original Interpretations (which are now nullified). This four-in-one compilation has a similar style to the Civil Code which compiles many civil laws and regulations; however, it does not simultaneously sort and modify . The content is the integration of the Original Interpretations as follow: The New Interpretation contains all article of the Original Interpretations III and IV, and integrates most of the provisions of the Original Interpretations I and II. Article 3 of the Original Interpretations I and articles 1, 2, 9, 10, 12, 13 of the Original Interpretations II were not included since they been modified by the Mediation and Arbitration Law.
 
3. Adjusts legal terms and cited laws and regulations
The New Interpretation has adjusted and standardized the legal terms used in the Original Interpretations. For example:
  • "labor dispute arbitration commission (劳动争议仲裁委员会)" is adjusted to "labor dispute arbitration agency (劳动争议仲裁机构)";
  • "or ()" is adjusted to "or (或者)";* (the difference can only be seen in the official Mandarin version))
  • "bring an action in the people's court (向人民法院起诉)" and “file and propose a lawsuit (提出起诉)” are unified into "file a lawsuit (提起诉讼)"
  •  “labor dispute mediation commission (劳动争议调解委员会)” was adjusted to “mediation organization stipulated in Article 10 of the Mediation and Arbitration Law (调解仲裁法第十条规定的调解组织)”.
 
The New Interpretation has also adjusted the names and provisions of the cited laws and regulations in the Original Interpretations. For example, the provisions of an open-term labor contract were adjusted from Article 20 of the Labor Law to Article 14 of the Labor Contract Law; Another example, the provisions of the employer’s rules and regulations have been adjusted from Article 4 of the Labor Law to Article 4 of the Labor Contract Law.
 
4. Restores the application of Original Interpretations
Original Interpretation (I) article 16 Paragraph 1 stipulates: "If a worker still works for his former employer after expiry of labor contract, and the employer does not present any objection, it shall be regarded that both parties consent to continuously perform the labor contract in light of former conditions. If either party requests the termination of labor relationship, the people's court shall support the request." The clause gave both parties, especially the employer, the right to unilaterally terminate the labor relationship. However, with the implementation of the Labor Contract Law in 2008, Article 44 clarifies the statutory circumstances under which the employer can terminate the labor contract, which does not include the circumstances specified in Article 16 of the Original Interpretation (I). This has led to judges applying the Labor Contract Law in trial practice instead of the Original Interpretation (I). In the New Interpretation, the first paragraph of Article 34 retained the first paragraph of Article 16 of the Original Interpretation (I), and therefore the application of this provision in court trials was restored. This implies that, in the circumstances specified in article 34 first paragraph, the employer also has the right to propose the termination of the labor relationship.
 
Click here for the modification comparison between the Original Interpretations and the New Interpretation (in Mandarin).

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