China Labor Arbitration: Procedure, Timelines and Strategy for Foreign Employers

The following is general information on Chinese labor dispute procedure, not legal advice for any specific claim. Timelines and thresholds are applied on the facts of each case; consult qualified counsel before acting.

The one-arbitration, two-trials system

China's labor disputes run through a distinctive channel: labor arbitration first, then the courts. The Labor Dispute Mediation and Arbitration Law (劳动争议调解仲裁法) was adopted on 29 December 2007 and took effect on 1 May 2008. A claimant must go to the labor dispute arbitration committee before any court — the one-arbitration, two-trials (一裁两审) structure. For a foreign employer, the immediate consequence is that a dismissed employee cannot file straight into court, but the employer equally cannot ignore the arbitration stage: it is where the facts and evidence are first fixed.

The timelines that drive the case

The clock starts early and runs fast. Under Article 27, the limitation period for a labor arbitration claim is one year, running from when the employee knew or should have known of the infringement — a much shorter period than general civil claims, though it is interrupted by a demand or an agreement. Article 29 requires the arbitration committee to decide within five days whether to accept the case. Article 43 sets the hearing deadline: the award should be made within 45 days of acceptance, extendable by 15 days where the case is complex. An employer that treats a labor claim as slow-moving civil litigation will miss these windows.

Finality: the final-award route

Not every award can be appealed. Article 47 makes certain awards final (一裁终局): those on remuneration, medical expenses for work injuries, economic compensation and damages, in amounts not exceeding twelve times the local monthly minimum wage, and those on working hours, rest, leave and social insurance under mandatory standards. For a final award, the employee may still sue within 15 days under Article 48, but the employer cannot appeal on the merits — the employer's only route is Article 49, an application to the intermediate people's court to revoke the award within 30 days on narrow grounds such as error of law, procedural irregularity, or evidence the employer could not obtain. The strategic point: many routine claims resolve in a final award the employer cannot appeal, so the arbitration stage is effectively the trial.

Evidence and the employer's burden

Article 6 allocates evidence in a way that matters to employers: the burden of proving facts relevant to the dispute rests on the party asserting them, but where the evidence is in the employer's control — payroll records, attendance, the labor contract, termination documents — the employer bears the burden of producing it. In practice the employer holds nearly all of it, and an employer that cannot produce a signed contract, a policy acknowledgement or a termination notice is likely to lose on that fact alone. Document discipline, not advocacy, is what wins most labor arbitrations.

Practical steps for a foreign employer

• Treat arbitration as the real forum: assume the award is final unless it falls outside Article 47.
• Calendar the 45-plus-15-day award window and the employee's 15-day suit window.
• Keep the evidence the employer controls — contract, attendance, payroll, termination documents — complete and retrievable.
• File a revocation application within 30 days under Article 49 only on the narrow statutory grounds.
• Decide settlement early: the one-year limitation and the final-award route make early resolution cheap.

The procedure above is current as of the date of writing and applied on the facts of each case; the summary is general information, and article numbers should be confirmed against the official text. For the substantive disputes behind these cases, see employment disputes in China: a guide for foreign companies, and for commercial arbitration — which is a different regime from labor arbitration — see China's Arbitration Law: a 2026 guide.