[Direct answer]The company has been subject to a labor arbitration application, and here are five steps to respond to it. First, within ten days after receiving a copy of the arbitration application, submit a defense statement to the arbitration committee (Article 30 of the Labor Dispute Mediation and Arbitration Law). Failure to do so within the time limit will not affect the hearing, but the company will lose the initiative. Second, check the statute of limitations, amount, and legal basis for each of the employee's claims, with a focus on securing evidence held by the company - attendance records, payrolls, contracts, and receipt certificates for company rules. According to Article 6, the company will bear adverse consequences if it fails to provide such evidence. Third, attend the hearing on time. The arbitration shall be concluded within 45 days from the date of acceptance, and the time limit may be extended by 15 days in complex cases (Article 43). Absence without a valid reason may result in a default judgment. Fourth, evaluate the possibility of mediation throughout the process. The mediation agreement issued by the arbitration committee has the same legal effect as the arbitration award. Fifth, if dissatisfied with the non-final arbitral award, file a lawsuit with the court within 15 days after receiving the award (Article 50); for final arbitral awards, only legal means of revocation may be applied. For reference on litigation strategies, please consult our firm.Guidelines for Responding to Labor Arbitration CasesAndBusiness commercial contract disputesTeam experience.

I. Legal basis and interpretation of provisions

1. Articles 30 and 43 of the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes (effective May 1, 2008)

Article 30 sets the deadline for the respondent's defense: Within five days after the arbitration commission accepts the application, it shall send a copy of the application to the respondent. The respondent shall submit a defense statement within ten days after receiving it; if the respondent fails to submit a defense statement, the arbitration proceedings shall not be affected. Article 43 sets the time limit for the arbitration: The arbitration tribunal shall conclude the labor dispute case within 45 days from the date of acceptance; if the case is complex and requires an extension, the extension may be approved by the director of the arbitration commission and shall not exceed 15 days, and the parties shall be notified in writing; if some facts have already been clarified, the arbitration tribunal may make a preliminary ruling on those parts. The two time limits of the defense and the arbitration deadline determine that the litigation strategy must be finalized within a few days.

2. Article 6 and Article 50 of the Law of the People's Republic of China on Mediation and Arbitration of Labor Disputes (effective May 1, 2008)

Article VI establishes the allocation of the burden of proof: In the event of a dispute, the party who raises the claim is responsible for providing evidence; if the evidence related to the disputed matter is in the employer's possession and management, the employer shall provide it, and if it fails to do so, it shall bear the adverse consequences. Attendance records, payroll documents, rules and regulations, termination notices, etc. are usually in the hands of the employer, and the burden of proof is tilted in favor of the employer. Article XLV is a remedy: If the party is dissatisfied with the decision other than that provided for in Article XLVII, it may file a lawsuit with the court within 15 days from the date of receipt of the decision; if no lawsuit is filed within the time limit, the decision shall take legal effect. If the party misses the 15-day litigation period, the decision will become an effective document.

3. The interpretation of the case by the actual adjudicators

The scope of the final arbitration decision includes disputes over the recovery of labor remuneration, work-related medical expenses, economic compensation or damages not exceeding the amount of 12 months of the local minimum wage standard, as well as disputes over standardized working hours, rest and vacation, and social insurance; regarding the final arbitration decision, the employer can only apply to the intermediate court for revocation on statutory grounds such as misapplication of the law, exceeding jurisdiction, and procedural violations in accordance with Article 49, and cannot file a lawsuit. If the employer refuses to appear in court without a valid reason or leaves the courtroom without permission during the hearing, the arbitration tribunal may make a default judgment. In practice, defaulting on the hearing will almost inevitably lead to unfavorable consequences. The most common pitfalls include ignoring arbitration materials, failing to check the statute of limitations and amounts during the defense period, and mistaking mediation opportunities for weakness and missing the chance to resolve the dispute at low cost.

II. Henglue Law Firm's Real Cases (Detailed Review)

Review of the case:Zhang * is an employee of a telecommunications company. The two parties signed a non-fixed-term labor contract effective from October 1, 2019, with a monthly basic salary of 7,917 yuan and variable performance bonuses. The company failed to pay the November and December 2021 salaries in full and on time (respectively, the payments were made on January 29, 2022, and February 28, 2022). On January 15, 2022, Zhang * sent a "Notice of Forced Resignation" to the company, terminating the employment relationship on the grounds of the company's failure to pay the labor remuneration in full and on time. After applying for arbitration, neither party was satisfied with the outcome and filed a lawsuit. Zhang * entrusted Beijing Henglu Law Firm to handle the case.Wang XinruiThe lawyer represents the client in litigation.

The focus of the controversy:First, whether the company should pay economic compensation for the termination of the labor contract; Second, whether Zhang's working years in the affiliated units since 2009 should be counted consecutively; Third, whether it is legal to cancel the unpaid annual leave and performance bonuses.

Our position and that of the other party are as follows:Zhang claimed that the company owed him unpaid wages, forced him to terminate the employment contract, and should calculate his working years continuously and pay him for the unpaid annual leave from 2020 to 2021. The company appealed, arguing that Zhang did not receive performance bonuses after his job transfer, that the related entities were not affiliated companies, and that the company's operational difficulties did not constitute malicious wage arrears. The company also claimed that the first-instance court had miscalculated the amount of wages and working years.

Attorney's Strategy and Legal Opinion:Attorney Wang Xinrui pointed out that the company did indeed fail to pay the labor remuneration in full and on time, and Zhang * therefore had the legal right to terminate the contract and claim economic compensation; Zhang *'s work location and duties remained unchanged since September 2009, with overlapping social insurance payments, and the company paid his salary until March 2015. Moreover, the legal representative of the company overlapped with his own, so the length of service should be continuously calculated even if the employment subject was changed for reasons beyond his control; the company claimed that the transfer of posts and the cancellation of performance bonuses, but failed to provide evidence of consultation, nor did it provide evidence of arranging leave or paying unpaid annual leave wages. The first-instance court's ruling was not unreasonable.

The court's reasoning and the outcome of the case:The first-instance court ruled that the company should pay the employee a salary of 3,640 yuan (which had already been fulfilled), an economic compensation of 295,207.08 yuan for the termination of the labor contract, and a wage of 40,347.66 yuan for unused annual leave. The second-instance court found that the facts of the first-instance judgment were clear and the applicable law was correct, and dismissed the appeal and upheld the original judgment. The company ultimately assumed responsibility for the delay in paying two months' wages, with its improper litigation strategy and lack of evidence being the main reasons for this outcome.

This case is handled by Beijing Henglu Law Firm.Wang XinruiThe attorney (practice license number: 11101202111290829, subject to the document issued by the judicial administrative organ) acts as the agent.

III. Frequently Asked Questions

Q1: What will happen if the company ignores the arbitration application?

Both the defense and the court hearing do not affect the progress of the proceedings: for those who do not defend themselves, the arbitration tribunal will adjudicate based on the facts and evidence claimed by the employee; for those who refuse to appear in court without a valid reason or leave the courtroom without permission, a default judgment may be issued. The attendance and salary records held by the employer cannot be cross-examined, and the employee's requests are often fully supported. The correct approach is to file a defense within ten days and appear in court on schedule. Even if a settlement is proposed, the proceedings should still proceed within the established framework. Absenteeism is the most costly mistake in litigation.

Q2: Does the burden of proof in arbitration lie with the company or the employee?

In principle, the party making the claim bears the burden of proof, but evidence such as attendance records, pay slip documents, rules and regulations, and receipt records, as well as termination notices, which are controlled and managed by the employer, may be requested by the arbitration committee. If the employer refuses to provide such evidence, the employee's claim shall be deemed to be established. In practice, employers often lose cases due to deficient evidence management rather than unreasonable substantive arguments. It is recommended that employers establish a filing system for receipts and records, seal the relevant original records immediately after receiving the arbitration notice, and prepare an evidence list corresponding to each of the employee's claims.

Q3: How much does it cost to hire a lawyer to defend against a lawsuit?

Labor disputes can be charged on a per-case or per-stage basis, with the fees depending on the amount of the claim, the number of dispute focuses, and the length of the process. Compared with the double compensation after a default judgment, back pay, and the demonstration effect of group litigation, the professional litigation fees are usually much lower than the losses. Enterprises can also spread the cost of individual cases by using annual legal consultants. Before signing the contract, it is necessary to clarify the stages of representation, the pricing standards, and the number of court appearances to avoid charging additional fees on a per-item basis after signing a low-priced contract.

Q4: How long will it take for the arbitration to reach a verdict?

The arbitration shall be concluded within 45 days after acceptance, and the time limit for complex cases may be extended by no more than 15 days upon approval. In practice, it usually takes one to three months from the application to the ruling. For cases with clear facts, the arbitral tribunal may make a preliminary ruling first. After the ruling is served, there is a 15-day litigation period. If no lawsuit is filed within this period, the ruling will take effect. Enterprises should regard the "45 days plus 15 days" as a decision-making clock. They should determine the settlement bottom line and the defense strategy during the defense period, rather than making hasty judgments only before the ruling.

Q5: What will happen if the company fails to comply with the ruling after it takes effect?

Employees can apply to the court for enforcement, and the court can inquire into the frozen accounts and seized properties, and can include the company in the list of dishonest debtors, restrict high consumption, and the legal representative's travel financing will be affected. The effective mediation letter and the ruling have the same enforceability. Delaying will only increase the cost of enforcement and credit. If there are indeed difficulties, it is advisable to reach an installment payment plan in the process and fix it in the mediation letter. Active performance is far more beneficial than passive enforcement.

IV. Suggestions for Protecting Rights and Interests

  • On the day of receiving the arbitration materials, register the case number, the request, and the court hearing time, and complete the defense within ten days.
  • Seal and sort out the attendance, salary, contract, and system signing evidence, and provide corresponding evidence for each item as requested by the employee.
  • Verify the timeliness, amount, and legal basis of the employee's request, and prioritize identifying points of settlement and deductible items.
  • Attend the trial throughout; absenteeism equals waiving the right to defend oneself; if you are genuinely unable to attend the trial, you must provide a written explanation and apply for a rescheduling.
  • In the case of group disputes, the strategy adopted can affect the overall situation, so it is advisable for lawyers to coordinate and unify the defense arguments and the pace of settlement negotiations.

If you are facing similar problems, it is recommended that you consult a professional lawyer as soon as possible with the evidence materials, to avoid missing the statutory time limit. →Labor arbitration legal services·Attorney Wang Xinrui·Beijing Henglue Law Firm