Issue 010222 – Settlement mechanisms for labor disputes pursuant to the 2019 Labor Code

Dear Valued Clients,

According to the 2019 Labor Code, a labor dispute means a dispute over rights, obligations and interests among the parties during the establishment, execution or termination of labor relation; a dispute between the representative organizations of employees; a dispute over a relationship that is directly relevant to the labor relation. Distinguished from other types of disputes, labor disputes shall be settled by particular settlement mechanisms according to labor laws. ENT would like to send you a detailed analysis on the settlement mechanisms for labor disputes pursuant to the 2019 Labor Code as follows.

Categories of labor disputes

According to the 2019 Labor Code, there are two types of labor disputes, which shall be named: (1) individual labor disputes, (2) collective labor disputes[1].

Accordingly, individual labor disputes are disputes between the employee and the employer; between the employee and the organization that sends the employee to work overseas under a contract; between the outsourced worker and the client enterprise[2].

Collective labor disputes are consisted of right-based collective labor disputes and interest-based collective labor disputes[3].

A right-based collective labor dispute of rights means a dispute between one or several representative organizations of employees and the employer or one or several representative organizations of employees in case of[4]:

• • Discrepancies in interpretation and implementation of the collective bargaining agreement, internal labor regulations and other lawful agreements;
  • Discrepancies in interpretation and implementation of labor laws;
  • The employer’s discrimination against the employees or members of the management board of the representative organization of employees for reasons of establishment, operation or participation in the organization; the employer’s interference or influencing the representative organization of employees; the employer’ violations against amicable negotiation.

Interest-based collective labor disputes shall arise during the process of collective bargaining or when a party refuses to participate in the collective bargaining or the collective bargaining is not held within the time limit prescribed by law[5].

Labor dispute settlement principles

The settlement process of labor dispute shall follow the principles below[6]:

• • Respect the parties’ autonomy through negotiation throughout the process of labor dispute settlement;
  • Prioritize labor dispute settlement through mediation and arbitration on the basis of respect for the rights and interests of the two disputing parties, and respect for the public interest of the society and conformity with the law;
  • The labor dispute shall be settled publicly, transparently, objectively, promptly, and lawfully;
  • Ensure the participation of the representatives of each party in the labor dispute settlement process;
  • Labor dispute settlement shall be initiated by a competent authority or person after it is requested by a disputing party or by another competent authority or person and is agreed by the disputing parties.

Labor dispute settlement mechanisms

Labor disputes can be settled by a number of mechanisms: negotiation, mediation, arbitration, before.

a) Negotiation:

Negotiation is a dispute resolution method in which the parties engage in direct dialogue with each other to reach an agreement on the settlement of disputes and can be applied to any type of labor dispute.

In fact, negotiation shall often be the first settlement mechanism that parties have recourse to because of its simplicity and rapidity, cost and time effectiveness. However, the settlement of labor disputes through negotiation requires the goodwill of the parties in the labor relationship in resolving the dispute in order to come to a positive solution.

b) Mediation:

Labor dispute resolution mechanism through a labor mediator shall be applicable to all types of labor disputes. The settlement of labor disputes by mediation will be considered mandatory before recourse to Labor Arbitration Council or the Court, except in cases where individual labor disputes are not required to go through mediation/conciliation procedures, which include[7]:

• • Disputes over dismissal for disciplinary reasons; unilateral termination of employment contracts;
  • Disputes over damages and allowances upon termination of employment contracts;
  • Disputes between a domestic worker and his/her employer;
  • Disputes over social insurance in accordance with social insurance laws; disputes over health insurance in accordance with health insurance laws ; disputes over unemployment insurance in accordance with employment laws; disputes over insurance for occupational accidents and occupational disease in accordance with occupational safety and health laws;
  • Disputes over damages between an employee and organization that dispatches the employee to work overseas under a contract;
  • Disputes between the outsourced worker and the client enterprise.

The procedures for settlement of labor disputes through mediation shall be conducted as follows[8]:

• • Within 05 working days from the receipt of the request from the disputing parties or the competent authority, the labor mediator shall complete the mediation process.
  • Both disputing parties must be present at the mediation meeting. The disputing parties may authorize another person to attend the mediation meeting.
  • The labor mediator shall instruct and assist the parties to negotiate with each other.
  • In case the two parties reach an agreement, the labor mediator shall prepare a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator.
  • In case the two parties do not reach an agreement, the labor mediator shall recommend a mediation option for the disputing parties to consider. In case the parties agree with the recommended mediation option, the labor mediator shall prepare a written record of successful mediation which bears the signatures of the disputing parties and the labor mediator.
  • Where the two parties do not agree with the recommended mediation option or where one of the disputing parties is absent for the second time without a valid reason after having been legitimately summoned, the labor mediator shall prepare a record of unsuccessful mediation which bears the signatures of the present disputing parties and the labor mediator.
  • Copies of the record of successful mediation or unsuccessful mediation shall be sent to the disputing parties within 01 working day from the date on which it is prepared.
  • In case a disputing party fails to adhere to the agreements specified in the record of successful mediation, the other party may request a Labor Arbitration Council or the Court to settle the case.

In case mediation is not mandatory or the labor mediator fails to initiate the mediation by the deadline provided in Article 188.4 of the 2019 Labor Code, the disputing parties may choose one of the following mechanisms to resolve the labor disputes[9]:

• • Request the Labor Arbitration Council to settle the dispute; or
  • Request the Court to settle the dispute.

Labor Arbitration Council:

Labor Arbitration Council shall have the authority to resolve all types of labor disputes on the basis of disputing parties’ unanimity. The parties are entitled to, by consensus, request the Labor Arbitration Council to settle the dispute in the following cases[10]:

• • Cases where mediation is not mandatory (applied to individual labor disputes);
  • Cases where the labor mediator fails to initiate the mediation by deadline;
  • Cases of unsuccessful mediation;
  • Cases where a disputing party fails to adhere to the agreements specified in the record of successful mediation.

With respect to individual labor disputes and right-based collective labor disputes, the disputing parties shall not be entitled to request the Court to resolve the disputes after having recourse to the Labor Arbitration Council, except for cases provided in Article 189.4[11] and 193.4, 193.5[12] of the 2019 Labor Code. Particularly, regarding right-bases collective labor disputes, if violations of law is found during settlement of the disputes mentioned in Article 179.2(b) and 179.2(c) of the 2019 Labor Code, the arbitral tribunal shall, instead of making a settlement decision, issue a record and transfer the documents to a competent authority for settlement as prescribed by law[13].

With respect to interest-based collective labor disputes, while the Labor Arbitration Council is settling a dispute at the request of the parties as prescribed in this Article, the representative organization of employees must not call a strike[14].

Competent Court:

The Court shall have the authority to resolve individual labor disputes and right-based collective labor disputes. The settlement of labor disputes shall be conducted by the Court in the following cases[15]:

• • Cases where mediation is not mandatory (applied to individual labor disputes);
  • Cases where the labor mediator fails to initiate the mediation by deadline;
  • Cases of unsuccessful mediation;
  • Cases where a disputing party fails to adhere to the agreements specified in the record of successful mediation.
  • Cases provided in Article 189.4[16] and 193.4, 193.5 of the 2019 Labor Code;
  • Cases where a disputing party fails to comply with the decision of the arbitral tribunal.

According to Article 35 of the 2015 Code of Civil Procedures[17] (the “Code”), the People’s Courts of districts shall have the authority to resolve the abovementioned labor disputes.

The territorial jurisdiction of the Court shall follow Article 39, 40 of the Code.

As usual, we hope you find this Legal Article helpful and look forward to working with you in the upcoming time.

Kind regards,

ENT Law LLC

The full version of this Legal Article can be found here.

—————————————————————-

[1] According to Article 179.1 of the 2019 Labor Code.

[2] According to Article 179.1(a) of the 2019 Labor Code.

[3] According to Article 179.1(b) of the 2019 Labor Code.

[4] According to Article 179.2 of the 2019 Labor Code.

[5] According to Article 179.3 of the 2019 Labor Code.

[6] According to Article 180 of the 2019 Labor Code.

[7] According to Article 188.1 of the 2019 Labor Code.

[8] According to Article 188.2, 188.3, 188.4, 188.5, 188.6 of the 2019 Labor Code.

[9] According to Article 188.7 of the 2019 Labor Code.

[10] According to Article 189.1, 193.1, 197.1 of the 2019 Labor Code.

[11] According to Article 189.4 of the 2019 Labor Code: “In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on the settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this Article, the parties are entitled to bring the case to Court”.

[12] According to Article 193.4, 193.5 of the 2019 Labor Code:

“4. While the Labor Arbitration Council is settling a dispute at the request of the parties as prescribed in this Article, the parties must not bring the same dispute to Court

5. In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on the settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this Article, the parties are entitled to bring the dispute to Court”.

[13] According to Article 193.3 of the 2019 Labor Code.

[14] According to Article 197.4 of the 2019 Labor Code.

[15] According to Article 188.1, 189.4, 190, 193.4, 193.5 of the 2019 Labor Code.

[16] According to Article 189.4 of the 2019 Labor Code: “In case an arbitral tribunal is not established by the deadline specified in Clause 2 of this Article, or a decision on the settlement of the labor dispute is not issued by the arbitral tribunal by the deadline specified in Clause 3 of this Article, the parties are entitled to bring the case to Court”.

[17] According to Article 35.1(c) of the 2019 Labor Code: “People’s Courts of districts shall have the jurisdiction to settle according to first-instance procedures the following disputes: Labor disputes prescribed in Article 32 of this Labor Code”.