As both the national and the local labourauthorities promulgate laws and regulations that govern labour relations between enterprises and their employees, the substantive rules are consistent in principle but vary in details and in implementa¬tion due to the regional discrep¬ancies in economic and social de¬velopment. The following labour dispute arbitration procedures, on the other hand, are more or less governed by a set of laws and regulations uniformly applied throughout the country, namely, the Labour Law of 1994, the Rules on the Handling of Enter¬prise Labour Disputes of 1993, the Case Hearing Rules and the Organization and Working Rules of the Labour Dispute Arbitration Committees, both promulgated in October 1993.

General Legal Principles
In general, the parties involved in a labour dispute should first re¬sort to consultation with each other. A standard labour contract will also cover conciliation at the labour dispute conciliation com¬mittee within the enterprise, though in most enterprises it is the trade union that plays the role of the conciliation committee. If the dispute survives the consultation and conciliation, an application for arbitration can be filed with the labour dispute arbitration commit¬tee (Arbitration committee*).

However, consultation and con-ciliationarenotprerequisiteforthe arbitration proceedings. Unlike
 
commercial arbitrations which are initiated by mutual consent, either party to a labour dispute may ini¬tiate the labour arbitration pro¬ceedings by filing a unilateral ap¬plication for arbitration with the arbitration committee. The invol¬untary party has to go through the arbitration proceeding and if it stays unhappy with the award, it may file an action to reverse that award at the people's courts.

Characteristics of Chinese Labour Arbitration
1. The labour arbitration is
compulsory in that no action re¬
lated to labour disputes may be
initiated at the people's court un¬
less the case has been adjudicated
by a competent labour dispute
arbitration committee; and

2. The labour arbitration pro¬
ceeding is not final in that the court
may review and reverse an erro¬
neous arbitration award rendered
by a labour dispute arbitration
committee.

Arbitration Committee and Arbitration Tribunal
Under the Organization and Working Rules of the Labour Dis¬pute Arbitration Committees, an arbitration committee is formed by representatives of the local labour bureaus and relevant gov-ernment departments, trade unions, enterprises, experts and lawyers. However, in each dis¬pute resolution proceeding, an ad hoc labour arbitration tribunal is
 
formed either by one sole arbitra¬tor in simple cases or most often by three panel arbitrators of the ar¬bitration committee. In contrast to commercial arbitra¬tions in which the arbitrators are appointed by the parties, the arbi¬trators in labour dispute arbitration proceedings are appointed by the local arbitration committees. Most frequently, the arbitrators are se¬lected from the staff of the labour relations divisions of the local labour bureau.
Arbitration Proceedings

1.    Application for Arbitration
A written application for arbitra¬tion shall be submitted to the arbi-trationcommitteewithinsixmonths from the day when a party to a labour dispute knows, or should have known, that the party's legal rights and interests have been vio¬lated. The statute of limitation may be extended where the delayed application is caused by special cir-cumstances, such as force ma-jeure.
An arbitration application shall cover the following information:

a. name(s), occupation(s),
address(es) and work unit(s) of the
employee(s) involved in the dis¬
pute; name and address of the en¬
terprise and the name and position
of the legal representative;

b. the claims and the facts in sup¬
port of the claims;

c. the supporting evidence and
name(s) and address(es) of
witness(es); and

d.    Date of the application.
An unqualified arbitration applica¬tion may be rejected without prejudice. The applicant may amend the application for a sec¬ond filing within the statutory deadline.

Further, the applicants should pre¬pare and submit the photocopies of the application and the support¬ing documents to the tribunal for a formal delivery to all respon¬dents by the tribunal.

2. Acceptance of Arbitration Application (Li An)")
The arbitration committee shall make a finding within seven days of receipt of the application on whether to accept or to reject an arbitration application. Where the application is accepted, a photo¬copy of the application shall be delivered to each respondent within seven days. The respondent(s) shall, within fifteen days of its receipt, submit to the tribunal an answer and the sup¬porting documents.
Upon acceptance of the arbitra¬tion application, the Applicant shall pay the following fees to the arbitration committee:

a.    Arbitration Fee Dispute amount                Arbitration fee (RMB *)    
Portion below* 1000                                            *100
Portion between * 1001     and *50000            5% *2450
Portion between *5000 1   and * 100000        4% *2000
Portion between * 100001 and *200000         3% *3000
Portion between *200001  and *500000         2% *6000
Portion between *500001  and * 1000000      1 % 
                                                                                  *5000  

b.    Case Handling Fee
A case handling fee is charged in addition to the arbitration fee to cover the tribunal's administrative cost and expense in handling the case, such as the photocopying, telephone and the investigation charges, etc. This fee varies in different localities. In Guangzhou, for example, the case handling fee is around 30% of the acceptance fee.
The total fee amount is the aggre¬gated sum of the arbitration fee and the case handling fee.

3. Investigation and evidence collection
Chinese law does not provide for the discovery process. Whilst the parties have the burden of proof, the tribunal is authorized by law to investigate the case by consult¬ing relevant parties, check the per¬sonnel files, data and other docu¬ments of the relevant employee, and to question anyone who has knowledge of the dispute. Em¬ployers, employees and non-in¬terested parties are mandated by law to fully co-operate with the tribunal in the collection of evi¬dence, though the penalty of per¬jury is not a concept neither well understood nor strictly enforced.
 
4.   Mediation
The tribunal willholdaformal me¬diation session in an effort to re¬solve the dispute by the parties* mutual consent. The session is not much different from the pre-arbi-tration conciliation except that the conciliation is organized by the conciliation committee within the enterprise. If a settlement is reached in the meditation session or afterwards, the tribunal will is¬sue a mediation agreement which covers the following:

a. names the applicant and the
respondent;

b. issues in dispute;

c. factualfinding;

d. terms of the settlement agree ment;

e. signatures of the parties andthe arbitrators; and

f. seal of the arbitration com¬mittee.

Either party may change mind prior to the execution of the me¬diation agreement or the receipt of such an agreement. Once duly delivered, the mediation agree¬ment becomes final and legally enforceable. The parties are barred from raising the same is¬sues for judicial or non-judicial review. In the event that one party refuses to voluntarily implement the agreement, the other party may apply for compulsory enforcement at the people's court.
 
 
PRC LABOUR ARBITRATION
5.    Arbitration Hearing
The case will proceed to hearing where no agreement is reached in the mediation session.

a. Procedural Matters
A formal hearing will be held in which the parties will present their arguments and evidence in sup¬port of their positions. Upon hear¬ing the arguments and upon ex¬amining the evidence, the tribunal will reach an award by majority votes whilst the dissenting opin¬ion will be recorded in writing.
A labour dispute arbitration should last no longer than 60 days with possible extension, subject to ap¬proval of the arbitration commit¬tee, for additional 30 days. The award will be served to the par¬ties in due course and the dis¬agreeing party is required to file an action in the people's Court within 15 days from the receipt of the award.

b. Case Substance
A labour tribunal will decide a case based on the national and local laws and regulations which may substantially deviate from the laws of other countries. Based on our experience, the terms of the employment contracts, the employee's personnel record, and the staff manuals are very impor¬tant evidence to prove qualifica¬tions of the employees, the hiring criteria and working rules of the employer companies. Unfortu¬nately, most small foreign invested businesses and representative of¬fices of foreign companies neglect
 
to keep good personnel records or to follow the standard labour practice in compliance with local law. Therefore, when involved in labour disputes, they have a hard time to establish that the Chinese labour law is followed in their labour practice.

Foreign Lawyer Participa¬tion in Arbitration
The parties to a labour dispute have the right to retain lawyers to attend the arbitration proceeding. The tribunal will require that a standard power of attorney be signed by the chairman of the com¬pany or the chief representative of the representative office with the company chop attached thereto. Further, the terms and limits of authority should be specified in the power of attorney. In Guangzhou, foreign lawyers may act for for¬eign investment enterprises in ar¬bitration proceedings and Dea¬cons Guangzhou Office has expe¬rience in foreign related labour dis¬pute arbitrations.