Labor Dispute Management in China

Published: December 2015

In this issue of China Briefing, we discuss how best to manage HR disputes in China. We begin by highlighting how China'€™s labor arbitration process€“ - and its legal system in general€“ - widely differs from the West, and then detail the labor disputes that foreign entities are likely to encounter when restructuring their China business. We conclude with a special feature from Business Advisory Manager Allan Xu, who explains the risks and procedures for terminating senior management in China.

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  • No. of Pages: 12 pages

In this issue:

  • The Unique Characteristics of Chinese Labor Arbitration
  • Common Labor Issues Encountered During an FIE Restructuring
  • Special Feature: Firing Senior Management in China

During the past five years, China has experienced a marked increase in labor dispute cases. This increase coincides with the beginning of the slowdown in the Chinese economy and with the country’s surging average income amounts, which continue to rise every year.

These two occurrences, both separately and in conjunction with one another, have been the cause of many foreign invested enterprises (FIEs) choosing to rethink their China strategy. In the past year, Dezan Shira & Associates have serviced numerous clients looking to restructure their China operations for precisely these reasons. Two important aspects of this process, which can exponentially add to the cost of a restructuring if not conducted correctly, are HR disputes and the labor arbitration proceedings that can arise from them.

In this issue of China Briefing, we discuss how best to manage HR disputes in China. We begin by highlighting how China’s labor arbitration process – and its legal system in general – widely differs from the West, and then detail the labor disputes that foreign entities are likely to encounter when restructuring their China business. We conclude with a special feature from Business Advisory Manager Allan Xu, who explains the risks and procedures for terminating senior management in China.

As we enter a new year, making informed HR decisions to protect your China business’s bottom line will be critical. With our extensive experience in labor dispute management in China, we at Dezan Shira & Associates can work with interested parties to ensure that such changes don’t turn into costly labor arbitration cases.


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