Labor Dispute Resolution in China: Implications for Labor Rights and Legal Reform (review)

Since the enactment of Chinas 1995 Labor Law, disputes over unpaid wages, workplace injuries, labor contract terminations, and other issues have skyrocketed. The phenomenal increase in officially reported labor arbitration and court cases, which rose from virtually zero in 1992 to over 225,000 by 2003, reveals both the successes and failures of labor legislation and legal reforms more generally. On the one hand, the trend suggests that Chinese workers are making use of the law to seek justice in cases where their rights have been violated. On the other hand, the Labor Law has utterly failed to curb the rampant violation of labor rights that gave rise to the law in the first place. The main purpose of the Labor Law was to promote economic growth and contain labor unrest during a period of wrenching change for China's labor force. If labor disputes, both formal and informal, have multiplied beyond the wildest expectations of those who enacted the law, what does this say about the enforceability of labor rights and, more generally, the rule of law in China?

Virginia Harper Ho addresses this important question in a book that examines the mechanisms for labor dispute resolution and identifies patterns in labor dispute cases. The term "labor disputes," it should be noted, denotes a subset of labor-management conflict that involves the filing and reporting of a specific grievance by an employee or firm over a violation of the Labor Law. Strikes, protests, riots, factory takeovers, and other admittedly more vivid forms of labor protest all remain outside the realm of labor disputes. Thus, the very existence of a labor dispute process signals a serious attempt by the Communist Party leadership to provide an outlet for disgruntled workers to seek justice without resorting to the far more threatening practice of protest and mass strikes. Labor dispute cases do not make headlines as would a large-scale protest of disaffected workers, but if we believe what Ho is suggesting in this book, the fact that workers have turned to labor dispute resolution is a development with long-term significance.

After a useful overview chapter for those unfamiliar with labor dispute regulations and the Labor Law, the book proceeds with a descriptive chapter on the evolution of the labor dispute resolution process in China. Chapter 4 addresses the question of which grievances get raised in labor disputes and which types of firms and regions have seen a greater share of disputes. In this and a subsequent chapter on the enforceability of labor rights, Ho makes the argument that, despite a number of obstacles, China's dispute-resolution system marks a significant development toward a rules-based labor regime.

Ho's conclusion that the labor dispute resolution process has laid the groundwork for the enforcement of labor rights puts her in the camp of cautious optimism for improved governance and social stability in China. She makes her argument carefully, perhaps to a fault, given the evidence she presents that might lead one to a more pessimistic conclusion. Although workers win in the majority of reported arbitration and court cases, the costs in taking legal action-not to mention the risks—remain high. Unions play a negligible role in the labor dispute resolution process, and this might be overstating the case. Party-controlled unions reflect the fact that workers in China lack the basic right of association. Once a worker gains a favorable judgment through arbitration or the courts, compliance is essentially a voluntary measure on the part of the employer. Still, the rapid diffusion of China's labor dispute resolution process is impressive, and leads Ho to the observation that "law may have real force in affecting the ordering of society when there is a confluence between the interests of the governed and the policy goals of the state" (p. 8). [End Page 449...