File Your Labor Case Now: Understand Key Process & Timeline of Labor Dispute
For foreign employees and foreign-invested enterprises in China, labor disputes are a common occurrence. Understanding China’s unique labor dispute resolution mechanism is crucial for safeguarding your rights. Unlike in other countries, China employs a mandatory “Arbitration-First and Two-Trial Finality” system for labor disputes, which dictates that cases must start with labor arbitration. Should either party be dissatisfied with the awards of labor arbitration, they have the right to initiate a labor litigation in court. Labor litigation follows the same procedures as ordinary litigation, adhering to a two-instance final trial system. This article will clearly explain the core steps, timeline, and legal basis of this process.
1. The Mandatory Pre-Litigation Step: Labor Arbitration
According to Article 5 of China’s Labor Dispute Mediation and Arbitration Law, labor arbitration is a mandatory prerequisite for litigation. Courts will not accept labor litigation which has not gone through the prior labor arbitration.
(1) Jurisdiction of Labor Arbitration
The labor arbitration shall be governed by the District Labor Dispute Arbitration Commission (LDAC) either by the place where the labor contract is performed or where the employer is registered.
Nevertheless, in certain cities (for instance, Shanghai), the jurisdiction over labor arbitration for foreigners falls under the municipal labor arbitration committees. Hence, it is advisable to verify with the labor arbitration committee prior to initiating labor arbitration.
(2) Statute of Limitations
- General Rule
The labor arbitration must be filed within 1 year from the date the employee knew or should have known their rights were infringed.
- Important Exceptions
– wage disputes during the employment relationship are not subject to the one-year limitation period.
– If the employment relationship has terminated, labor arbitration (including wage disputes) must be filed within one year from the termination date.
- Interruption of Limitation
– Claims against the other party
– Request for relief from the authority
– The other party agreeing to perform its obligations
- Suspension of Limitation
– Force majeure
– Other legitimate reasons
(3) Required Filing Materials
- Arbitration Application (clearly stating claims, facts, and reasons)
- Identity Documents (for both employee and employer representative)
- Proof of Employment Relationship (e.g., labor contract, wage records/slips, termination letter)
- Other relevant evidence.
(4) Processing Timeline:
- Decide whether to accept the case within 5 days of receiving the application.
- Close the case within 45 days upon acceptance (can be extended with approval, but the extension cannot exceed 15 days).
(5) Final Awards
If either the employee or the employer is not satisfied with the award, they may file a lawsuit with the people’s court within 15 days from the date of receiving the award; otherwise, the award will take effect.
- Exceptions:
Labor arbitration awards shall be final and legally binding from the date of issuance under the following circumstances (however, the employee retains the right to file a case in court if dissatisfied with the awards):
(i) Claims for labor remuneration, work-related medical expenses, economic compensation, or damages not exceeding twelve times the local monthly minimum wage;
(ii) Disputes arising from compliance with national labor standards regarding working hours, rest periods, holidays, and social insurance.
2. First Instance Litigation: From Filing to Judgment
If dissatisfied with the arbitration award, either party may file a lawsuit with the Basic People’s Court within 15 days of receiving the award.
（1）Jurisdiction
Basic People’s Court at the place of the employer’s domicile or where the labor contract is performed.
（2）Essential Documents
- Civil Complaint(detailing claims, facts, and reasons against the arbitration award)
- Original Arbitration Award
- Identity Documents
- Evidence Materials
（3）Court Fee
RMB 10 for each labor dispute case.
（4）Procedure & Timeline
- Filing: After submitting the filing documents, we must wait for the court’s formal acceptance. The waiting period varies among different regional courts, as they handle varying volumes of cases. For example, in Shanghai, some courts may require a waiting period of 2-3 months due to their heavy caseloads.
- Payment of court fees: Upon formal acceptance, the court will issue a payment notice for the court fees. It is essential to settle the court fees promptly; failure to do so may result in the case being considered withdrawn. Subsequently, you will need to wait for the assignment of a judge.
- Summons: In the next step, the judge will schedule a court hearing and issue a summons to both parties, along with providing the complaint and evidence to the defendant.
- Court hearing and judgment: In a summary procedure, the case will be concluded within three months, whereas the ordinary procedure will be concluded within six months.
3. Second Instance Appeal: The Final Remedy
(1) Appeal period
If dissatisfied with the first-instance judgment, a party may appeal to the higher-level (Intermediate) People’s Court within 15 days of the judgment being served. For foreign party without domicile in China , the appeal period for both judgments and rulings is 30 days.
(2) Form
Generally, the court will hold a court hearing. However, it may render a judgment based on the case files (“paper review”) if no new facts or evidence are submitted.
(3) Time Limit
Will be concluded within 3 months from appeal acceptance.
(4) Legal Effect
The second-instance judgment takes effect immediately upon service. Parties cannot appeal further.
4. Conclusion
Foreign individuals and companies involved in a labor dispute in China should seek advice from professional lawyers promptly to navigate the complexities, ensure strict compliance with procedures and deadlines, and maximize the protection of your rights.
Note: This guide is based on Chinese laws and regulations as of July 2025. Subsequent legal revisions or policy adjustments may occur. Always consult with professional lawyers or refer to the latest official sources for the most current information.
Saway Wang
Email: sawaywang@billionslawyer.com
Tel/Whatsapp: +86 18017682422
