Sample Paper on Labor disputes arbitration procedure in US and China

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Comparing labor disputes arbitration procedure in US and China


Although the American labor arbitration procedures are not perfect, China can learn extensively from the Alternate Dispute Resolution arbitration procedure executed in the US. More labor disputes are likely to occur as China moves towards capitalism that could adversely affect the country’s economy (Yang, Carl & Han, 2008). To guarantee the workers economic welfare in the future, China must become proactive by formulating strategies to manage labor related issues. The high rural-urban migration in China provides the industrialized cities with sufficient workers but also places pressure on companies through labor unrests. The Chinese government has to execute robust labor relation strategies that eliminates possible labor unrests and reduces significantly disputes in the places of work. The government can amend the existing labor laws and regulations to accomplish these objectives in its growing workforce. This paper compares the significant differences that exist between China and US in relation to arbitration procedures. It further provides sound recommendations to the Chinese Government to be in line with what is practiced in the US today (Yang, Carl & Han, 2008). Effective labor arbitration procedure enforces collectively the private and public sector collective bargaining agreements reducing cases of labor unrest. The Alternate Dispute Resolution is a powerful arbitration procedure in the US that has been universally agreed upon by workers, trade unions and workers to resolve labor related issues in places of work in America. Consequently, US has enjoyed relatively stable economic environment due to few disruptions.

Virtually all organizations are faced with issues that touch on workforce and these issues have to be solved in a way that leaves all the involved parties satisfied (Fossum, 2014). Labor issues reduce significantly if either formal or informal dialogue takes place that involves all the concerned parties. Effective arbitration procedure allows normal operations to take place in the organization while at the same time proving for a platform for raising grievances. Today, the existing laws in China support mediation as opposed to arbitration in solving labor issues contrary to US where arbitration is given priority. Further, the labor unions in America differ with those of China in the sense that Chinese have a practice of deferring contentious issues to the management of the concerned organization (Yang, Carl & Han, 2008). A comparison of the arbitration procedure practiced in America and those applied in China provides the government of China with useful lessons of how to improve its arbitration procedure to minimize wrangles in places of work for its growing workforce.

Labor disputes arbitration in China

The collective bargaining agreement is the initial phase in the resolving labor disputes while the binding grievance arbitration is the last resort phase in U.S. Alongside these two major phases, mediation, reconciliation and fact finding missions are done in the efforts to settle disputes (Coulson & American Arbitration Association, 1993). The difference emerges in China since the existing labor arbitration system is not final or binding because the parties to the arbitration procedure have the right to appeal in the people’s court. The difference between arbitration in the US and that of China is because China allows for the appeals while US arbitration procedure is final and the decision of the ADR binds the parties. The structure of ADR in China comprises of three arms; the arbitration court, office for the arbitration committee and the arbitration committee itself (Yang, Carl & Han, 2008). The Chinese government appoints the committee and mandates it to resolve labor disputes. The arbitration committee members are appointed for the different counties and each committee is responsible for disputes arising in its area of jurisdiction. The committee members are a mix of representatives from employers, workers and unions. The arbitration committees are consulted when disputes arises in places of work as well as taking part in drafting labor laws and regulations (Brown, 2010). The arbitration committee sets up its office where it handles its administrative and routine tasks. The arbitration court is where arbitration awards are given.

Labor disputes arbitration in America

In America, the aggrieved parties submit their disputes to a third party for settlement. The third part is a qualified and neutral body that is capable of objectively handling the dispute and offering a remedy on the basis of merit (Yang, Carl & Han, 2008). Employers, workers and unions in the US have universally accepted the arbitration body as appropriate and effective in resolving workplace disputes. The process is referred to as voluntary arbitration when the parties agree mutually to solve the differences. America believes that the labor arbitration substitutes labor law suits because the arbitrators are more conversant with workplace law compared to judges in courts of law. The arbitration procedure is not only cheap but it also allows for normal operations to take place in the organization as the process is being carried out. Law courts in the US including the Supreme Court have recognized the arbitration procedure to solving labor disputes as opposed to litigation. Consequently, courts in America have refused to hear labor related disputes of all kind unless in extreme cases where the arbitrator’s competence is questionable. The ADR has worked out well in America because people have confidence in the body’s effort to ending labor related disputes. Further, the procedure is conducted by highly qualified, non-governmental and independent neutral experts who have the necessary training to handle workplace disputes of all kinds. They are similar to private consultants who offer arbitration services for a fee (Yang, Carl & Han, 2008). Both the union and the employer share the arbitration fee. Only a few disputes reach the arbitration process because the multi-stage grievances procedure handles most of the disputes internally. The workers’ union and the employer are responsible for designing the grievances arbitration procedure with the right number of steps as the parties deems fit. Despite being considered appropriate in solving labor disputes, the American ADR has few challenges including taking relatively long time due to the numerous grievances stages (Coulson & American Arbitration Association, 1993). In addition, it is sometimes difficult to agree on the dates for hearing since the parties have diverse opinions. Nevertheless, the American ADR performs well overall proving a mechanism for handling labor related issues in the places of work. Most importantly, it leaves the two parties, both the union and the employer satisfied.

Recommendations for improving Chinese ADR system

The underlying problem in the Chinese approach to arbitration is attempting to solve labor disputes through litigation. To be effective the Chinese ADR should be purely arbitration as opposed to the existing system that combines arbitration with other aspects. To improve the system in the future, the law should be amended to clearly define the roles of the arbitration court and those of the arbitration committee (Yang, Carl & Han, 2008). The law should give arbitration the final authority in hearing and determining labor disputes. Government intervention is crucial in labor disputes in forming arbitration committees for all counties and empowering them and protects them from any form of influence from the political class. Political influence interferes with the normal working of neutral bodies and may lead to conflict of interest in hearing and determination of labor dispute cases. In China today, most work place disputes are determined in law courts while only a small fraction is determined through arbitration (Yang, Carl & Han, 2008). The law Courts in China should emulate their American counterparts and defer all labor dispute cases to the arbitration committees in their respective areas of jurisdiction. The arbitration committee should have the final decision binding both parties. Most trade unions in China today do not function effectively. Absences of trade unions are a major contributing factor to the high number of industrial unrests (Brown, 2010). If trade unions became aggressive in fighting for the rights of workers, there would be less labor disputes and industrial unrests. The labor laws and regulations in China should be amended to strengthen trade unions and guarantee leaders of the trade unions job security. Empowering trade unions by amending the existing laws will enable trade unions to be aggressive in fighting for the rights of workers. There is a need to explain the existing laws touching on employees because a significant number of workers in China are illiterate (Fossum, 2014). Where workers are not aware of the current laws, they have difficulties in fighting for their rights. It is the responsibility of Chinese government and organizations to empower the over 300 million workforce through training and education. It is important for enforcing the existing labor laws strictly as well as drafting more laws that strike a balance between the workers and their employers (Yang, Carl & Han, 2008). The current public policies should be strengthened to ensure that the employers and workers have a mutual relationship that will foster economic growth for China in the future.







Brown, R. C. (2010). Understanding labor and employment law in China. Cambridge: Cambridge University Press.

Coulson, R., & American Arbitration Association. (1993). ADR in America: Alternatives to litigation. New York: American Arbitration Association.

Fossum, J. A. (2014). Labor relations: Development, structure, process. New York: McGraw-Hill/Irwin

Yang, Xinjiletu. Carl, F. Jenks. & Han, Weihong. (2008). A comparison of labor arbitration procedures in the U.S. and China. Retrieved from