Labor Dispute … Got a plan?
Labor Dispute … Got a plan?
You’ll need one.
Before moving forward with any action to resolve a labor dispute with a Chinese employer, you - the foreign worker - need a plan. That is because elements of the dispute interact with each other in complex ways, and your residence permit validity or your ability to get a work permit for your next job are not areas where you want to run into surprises.
Planning for most China labor disputes should cover at least four areas:
1 Money 2 Release Documents 3 Staying in China 4 Sustaining yourselfMany labor disputes are about money, and about money that the worker should have been paid but wasn’t. After all if your boss overpays you, you can always return the extra or donate it to your favorite charity. So here what we are talking about is how to get the employer to pay you money that you are owed.
The first thing is to know how much you are owed and why. This is where a knowledge of laws and administrative regulations comes in handy. (A good way to get this knowledge is by joining Reliant’s China Labor Issues Wechat Groups). Besides pay, in many situations Chinese labor laws entitle workers to severance payments - or damages - when leaving a job. Sometimes just explaining to an employer why you are owed what you are owed in terms of the law can be enough to get payment. But when it is not, you still have options: a labor inspection (劳动监察) complaint or labor arbitration (劳动仲裁) case.
Labor inspection is like the labor police; they conduct investigations of employers and can issue orders and fines. Labor inspection investigations can take up to 90 days in complex cases, though regular cases are supposed to be finished in 60 days. The main advantage of a labor inspection complaint is the inspectors will often call an employer before the complaint is even formally accepted. This can lead many employers to start or restart negotiations quickly.
Labor arbitration is like the labor court. Labor arbitration is more suited to complex situations where a judgement needs to be made. After accepting a case, the labor arbitration committee will schedule a hearing and then render a judgement. This is supposed to happen within 45 days or 60 days for complex cases.
Neither labor arbitration nor labor inspection requires an attorney, but all proceedings are in Chinese, so unless your Chinese is near native-speaker level and you have also mastered formal writing, you will need a translator to file and follow up on your case. And this has to factor into your plan.
If you want to leave your job and move to another job in China, you will almost always need release documents. These come from your prior employer who gives them to you or to your new employer. The new employer, in turn, uses the documents to apply for a new work permit through the Foreign Experts Bureau (FEB 外专局) in the district where the new employer is registered.
The most basic release document is the cancellation letter (外国人来华工作许可注销证明 often abbreviated to 注销单). The cancellation letter is an official document that comes from the FEB in the district where the original employer is registered. To get the cancellation letter the old employer or the old employer’s agent needs to submit a signed (by you) and stamped (with the company chop 公章) cancellation from, a signed and stamped termination agreement, your work permit card, and scan or your passport. Note, these specifics may vary with location and changes in policy and its implementation, and there are ways, both above board and underhanded, that allow employers to submit these documents without your signature.
The receiving FEB may require other release documents beyond the cancellation letter, such as a release letter, a letter of recommendation, or a proof of work letter. While some can even be forms, all these are simply written or filled out by the former employer and then stamped with the company chop. In most cases it is important to have original documents with red stamps and not copies or scans of documents. Though scans are used in the initial stage of the application - and may be all that is needed under special procedures during the pandemic - original will usually be required by the receiving FEB.
Though employers often threaten foreign employees with being put on a blacklist, this is usually nothing more than a hollow scare tactic. Blacklists exist for people who have been deported, committed crimes, or even submitted false information during the work permit and residence permit application processes, but labor disputes do not lead to real blacklisting. What usually happens is that employers abuse their power over the FEB online work permit system. This can involve many techniques, but the most common one is withholding the cancellation letter (and other release documents). This is why part of your plan has to be what you will do to get your release documents.
You may want or need to stay in China to follow up on your labor dispute. It can be expensive to leave China, and during the pandemic it may not be possible to return if you leave. If you are already outside of China it is often possible to appoint someone to act as your agent for either a labor inspection claim or a labor arbitration case. Local rules will vary, some may also require that the complainant or applicant make the initial filing in person, but in most places your appointed agent can do this. In most places the appointed agent does not need to be a lawyer, but often needs to be a Chinese citizen.
One tactic that employers use in labor disputes is to try to force foreign employees to leave the country. If you are in a labor dispute in China, you must have been working legally, as those without legal working status are not protected by labor laws. If you have both a work permit and a residence permit for work, then you are working legally. But the work permit is tied to the employer, and the law requires both you and the employer to report your leaving a job to the Entry Exit Administration (EEA). The decision about what to do with your residence permit is then up to the EEA. Usually the EEA will cancel the residence permit and give you a short term stay permit. However, because cancelling your residence permit isn’t technically up to the employer, you can go to the EEA and prove that you are in a labor dispute, and the EEA will often then allow you to stay in China for the duration of your case. But this is something you need to plan ahead for.
If you are going to be in China to file and follow up on your case, but your employer has not given you the cancellation letter then you cannot get a new work permit and thus also cannot get a new legal job. While some people might take an illegal job in person or online, options that do not comply with legal work requirements cannot really be considered. Thus it is best if you have another source of funds - savings, a partner who is working, loans or other support from friends or family - for the few months it might take to resolve a labor dispute. There is also the potential to apply for advanced execution of the award in labor arbitration if certain conditions exist, but this is not guaranteed.
These potentially harsh realities also make clear that a negotiated settlement is usually the best option. Being willing to give up some moneys one is due, or make other concessions related to time and timing, can often avoid the expense, stress, and hassle of long drawn out labor conflicts. Thus it pays to always keep open to the possibilities of a negotiated settlement. Sometimes filing an arbitration case or making an inspection complaint can be enough to push even recalcitrant employers into meaningful negotiations. These possibilities should also factor into your plan.
Interactions
If you lack a way to sustain yourself, then you may well not be able to stay in China and follow up on your case. If you are unable to file or follow up on your case, you won’t get your release documents. If you do not get your release documents, you may be unable to sustain yourself, and then also unable to stay in China to follow up on getting your money. And if you can’t get your money, then you may again fall into the trap of not being able to sustain yourself or not being able to stay in or return to China. None of these interactions are fun, and it is easy to make missteps when under stress and in an unfamiliar linguistic, cultural, and legal environment.
All that may seem daunting, but your chances of success are actually greater than you might think. Labor law in China heavily favors employees, and many small employers, especially in the education sector, are woefully ignorant of the law. By thinking ahead and making a plan for how to manage your efforts to get your money, get your release documents, stay in China to file and follow up on your case, and sustain yourself the whole time, you can come out ahead. You might not get everything you are owed, but you can usually come away with much more than you thought possible, and with the satisfaction of not having let others exploit you. The key is to have a plan.
We can help you get better results when in a China labor dispute. We offer nationwide strategy consulting, planning, translation, and editing services, as well as work permit processing and consulting, and we can act as an agent for many matters in Beijing.
About ReliantThough we are not lawyers, we know China labor laws and administrative regulations. Reliant’s co-founders are Josh and Lee. Josh is a former Fullbright Scholar educated at Yale and Tsinghua University. He is a native English speaker who has been featured on Chinese language television programs for his Mandarin language abilities, and has lived and worked in China since 1999. A native of Beijing, Lee was educated at Renmin University and holds a Chinese Human Resources Professional certificate.
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