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Legal Focus
JULY 2013
Employment Law and Disputes
Employment law is a vast and often complex regulatory web to navigate. The law needs to accurately balance the needs of both the employer and the employee, without a solution for one negatively impacting on the needs of the other. To find out about the recent developments in Chinese labour law, such as the Supreme People's Court’s recent Interpretation on a variety of issues, Lawyer Monthly speaks to Kevin Jones, partner at Faegre Baker Daniels, a U.S. based firm with international offices in London, Shanghai and Beijing
Can you briefly introduce yourself and your firm?
Faegre Baker Daniels has a strong firm-wide employment capability comprising more than 100 legal professionals. I head the firm’s China labor and employment team, which is one of the leading practices of its kind in China. We have wide industry experience having represented or advised multinationals in the retail, luxury apparel and goods, manufacturing, entertainment, airline, energy, information technology, food and agriculture, telecommunications, healthcare, life sciences and energy sectors.
I have been based in China for over 17 years and was recently recognized as a leading employment lawyer by Legal 500 for three consecutive years (2010, 2011 and 2012) and Chambers Asia for three consecutive years (2011, 2012 and 2013).
What are the key types of employment-related cases you deal with?
Our team advises on all aspects of both contentious and non-contentious employment matters. We have a particular focus on staffing issues arising from acquisitions and other re-organizations, strategic employment counseling, employee hiring and termination, establishment and enforcement of company polices, advising on labor union issues, drafting and negotiating collective contracts, labor disputes and anti- corruption compliance.
What are the main challenges you face?
The main challenge at the moment is dealing with the increasing number of labor disputes faced by our clients. These can arise in a number of contexts, ranging from arbitration or litigation relating to claims of unlawful termination to work stoppages
and strikes. Employees are increasingly aware of their legal rights and how to leverage these rights to their advantage through various means.
We recently assisted a client with settling a work stoppage that arose in the context of an asset sale where the employees were to transfer to the purchaser. Although the transaction was viewed favourably by the employees, they were quick to organize and use the opportunity to negotiate the payment of certain entitlements that would have otherwise transferred to the purchaser. Employees are well aware that employers cannot afford production stoppages and that authorities will typically try to settle such disputes by persuading the parties to undertake some form of collective bargaining.
Additionally, a significant portion of our work over the past year related to assisting our clients with disputes regarding terminations and reductions in force. Terminating employees in China is notoriously difficult so successfully defending a unilateral termination or effectively managing multiple terminations simultaneously is very challenging.
Recently the Supreme People's Court issued its fourth interpretation on a variety of issues relating to the application of law in the trial of employment disputes. Please give me an overview of this.
The Employment Contract Law (ECL) and related laws and regulations often contain gaps where uncertainty can arise in their application. The Supreme People’s Court steps in and provides guidance from time to time to fill such gaps. Interpretation 4, issued in February of this year, is the court’s latest effort in this respect and covers the following: