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back to index backGLOBALtalk December,  2011


Shanghai Issues Rules for Mediation of Collective Bargaining Disputes

On August 4, 2011, the Shanghai Human Resources and Social Security Bureau issued its "Rules for the Mediation of Collective Bargaining Disputes" (the "Mediation Rules").

The Mediation Rules outline the actions that Labor Bureaus may take to facilitate collective bargaining between the employer and the employees (or labor union).

Under these Rules, the labor bureau in-charge may take the following steps:

•  convene a meeting to consider each party's arguments;

•  investigate the reasonableness of the parties' stances on the disputed issue(s); and

•  engage a third party to assess the reasonableness of each party's stance.

The Labor Bureau will then provide an opinion regarding any outstanding issues upon which the parties cannot agree.

Although the opinion issued by the Labor Bureau will not be legally binding on the parties, in practice it is likely to have a significant impact. For example, if the employer does not follow the opinion there may be the following consequences:

(i)  Employees may use the opinion against the employer if and/or when they disclose the dispute to the media. Such a tactic is becoming increasingly common; and

(ii)  In the worst-case scenario, if the employees commence a collective action, such as a strike, the local authorities (generally the Labor Bureau) may be more sympathetic to the employees. They may take the employees' side or take no action to intervene in the dispute. This could have serious implications for the employer, as Labor Bureau intervention is often critical for resolving long-term strikes.

Source: Baker & McKenzie - GAI

For more information or to contact Baker & McKenzie, please click here.





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