Resolution of labour disputes involving new forms of employment in China

Based on the study of arbitration and judicial cases involving new forms of employment, this working paper identifies and examines notable characteristics of disputes involving new forms of employment. This working paper found that the number of such disputes is not large compared to the total number of labour disputes in China but is growing and mainly involving instant delivery sector. The claims concentrated on compensation for work-related injuries along with recognition of an employment relationship. Employers are difficult to identify due to multiple outsourcing and digital evidence which are more prevalent than in other labour disputes. Combining an analysis of a number of actual cases and interviews with labour dispute arbitrators, the paper also found that the "reference basis" for judgments in these disputes is the Notice on the Recognition of Employment Relationships (issued by the former Ministry of Labour and Social Security, Document No. laoshefa [2005] 12, hereafter referred to as the Notice 12). Furthermore, the key consideration when determining the existence of employment relationships centres around ascertaining the actual reality of subordination, while algorithms, instant messaging tools and the use of labour intermediaries constitute a new type of labour management practices (or new set of tools) of platform companies in China. This report analyses some typical "methods" used by some platform companies to avoid employment relationships and the corresponding efforts to "reveal" the reality of employment relationships in the course of examining and determining the disputes. Examining and unearthing inconsistencies between the "employment facts" and the semblance of the contract or agreement, as well as the existence of effective management running through layers of subcontracting and false self-employment, were the central tasks of labour dispute resolution practitioners in most of the disputes. The problem of evidence in the handling of cases involving new forms of employment is also discussed. The report examines the problems that may arise in the implementation of the Guiding Opinion on Protecting the Labour Rights and Interests of Workers in New Forms of Employment. It also explores possible measures to respond effectively to the difficulties and challenges and presents suggestions regarding dispute resolution procedures, judgment rules for classifying the employment status of the worker, and rules for the distribution of burden of proof.