Answer: The Labor Dispute Mediation and Arbitration Law stipulates that the time limit for filing employment arbitration is one year, which is the so-called limitation of labor dispute arbitration. That is to say, the period for which employees may claim double-wage damages should be one year before the date of applying for employment arbitration. The practices implementing this rule can be divided into two types in specific employment arbitrations or judicial proceedings.
Under the first type of practice, the claim of double-wage damages is a separatable, non-integrated right. Every day on which a written employment contract is absent shall be checked according to the one-year limitation of arbitration and the double-wage damages shall be determined based on the number of days or a time period within the limitation. This is the overlapping period between the 12-month period before the filing of the arbitration claim and the period during which an employment contract should have been signed but was not. The courts that have applied this practice include the Guangzhou and Shenzhen Intermediate People’s Courts in Guangdong Province, the Jiujiang Intermediate People’s Court in Jiangxi Province, the Chengdu Intermediate People’s Court in Sichuan Province, the Huaian Intermediate Court in Jiangsu province, the Anshan Intermediate Court in Liaoning province, and the Hefei Intermediate Court in Anhui province.1Xiong Jinhui Labor Dispute Civil Judgment of Second Instance of Shenzhen Intermediate People’s Court of Guangdong Province (2017) Yue 03 Min Zhong No.1329, Guo Yuqing, Guangzhou Xinyi Trading Co., Ltd. Labor Dispute Civil Judgment of Second Instance of Guangzhou Intermediate People’s Court of Guangdong Province (2019) Yue 01 Min Zhong 20726 No., Jiujiang City and New Energy Technology Development Co., Ltd., Xu Faqing Labor Dispute Second Instance Civil Judgment Jiangxi Jiujiang Intermediate People’s Court Civil Judgment (2018) Gan 04 Min Zhong No.2077, Labor Dispute Appeal between Sichuan Xinyun Labor Service Co., Ltd. and Liu Haijun Civil Judgment of Chengdu Intermediate People’s Court of Sichuan Province (2014) C.M.Z.Z. No.1402, No.1403, Li Shuzhong and Huaian Ningxin Property Service Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Civil Judgment of Intermediate People’s Court of Huaian City, Jiangsu Province (2019) Su 08 Min Zhong No.1476. Tiedong District Wangski Pet Products Beauty Shop, Gao Yipeng Labor Dispute Civil Judgment of Second Instance Civil Judgment of Anshan Intermediate People’s Court of Liaoning Province (2023) Liao 03 Min Zhong No.908. Anhui Chuangjinghui Precision Manufacturing Co., Ltd., Li Lei Labor Dispute Second Instance Civil Judgment Anhui Hefei Intermediate People’s Court Civil Judgment (2020) Wan 01 Min Zhong No.4380.
The second category is, as more courts hold, double-wage damages are a debt in a whole. The period for the damages begins, in the case of new employee, from the date of expiration of one month of employment up to one year after the employment commencement, or begins, in the case of current employee who is entitled to permanent contract, from the date when the employer should have signed the permanent contract up to one year of the date.2 Another situation is that the parties continue the employment over one month after the previous fixed-term contract¡¯s expiration. It is very complicated to determine whether the employer is liable for double-wage damages. This reflects the legislator¡¯s lack of foresight regarding the complexities in practical situations when creating new rules. If the employee fails to claim it one year (the limitation of arbitration) after the period ends, the right extinguishes as a whole. If the employee applies for employment arbitration before the period ends, the double-wage damages shall be upheld as a whole rather than be computed by days or months as proscribed in the first category. This is the practice of the vast majority of courts, including Tianjin High Court, Shandong High Court, Qinghai High Court, Henan High Court and Tibet Autonomous Region High Court, Guangdong Foshan Intermediate Court, Beijing Second Intermediate Court, Shizuishan Intermediate Court of Ningxia Hui Autonomous Region, Chengde Intermediate Court of Hebei Province, Shaoguan Intermediate Court of Guangdong Province and Chongqing First Intermediate Court.3Tianjin Daan Electric Vehicle Co., Ltd., Civil Ruling on Labor Dispute Retrial Review and Trial Supervision of Jiaman Tianjin High Court Civil Ruling (2020) Jin Min Shen No.1211. Ou Lianghong v. Zhaoyuan Zhengbang Machinery Co., Ltd. The civil judgment of Shandong Provincial People¡¯s High Court on labor dispute retrial was issued on July 21, 2016 (2016) Lumin Zai No.400. Labor Dispute Case of Shen Xiaohong v. Qinghai University Civil Judgment of Qinghai High Court (2015) Qing Min Ti Zi No.29. Luoyang Kaikai Food Development Co., Ltd. and Li Hongjun’s application for retrial of labor disputes, Henan Provincial People¡¯s High Court Civil Ruling (2021) Yumin Shen 9853. ¡°The employer’s liability to pay double-wage damages to workers for not signing an employment contract should be regarded as a debt of regular payment with integrity and relevance, and the limitation period of arbitration shall be calculated from the final date of expiration of the performance period, that is, from the date of one year after the date a written employment contract should have been signed.¡± Beijing Banmo International Engineering Design Co., Ltd. Tibet Branch, Linmou Labor Dispute Civil Trial Supervision Civil Ruling Tibet Autonomous Region High Court Civil Ruling (2021) Zang Min Shen No.114. Labor Dispute between Cao Gangyan, Shanghai Wuzhu Garment Co., Ltd. and Wuzhu Garment (Foshan) Co., Ltd. Civil Judgment of Foshan Intermediate People’s Court of Guangdong Province (2019) No.06 Minzhong 13391. Civil Judgment of Second Instance of Labor Dispute between Beijing Huayuxing Property Management Co., Ltd. and Zhang Jianguo Civil Judgment of the Second Intermediate People’s Court of Beijing (2021) Jing 02 Min Zhong 11230 No. Shizuishan Huiyi Metallurgical Industry and Trade Co., Ltd. and Chen Zhanqing Labor Dispute Second Instance Civil Judgment Ningxia Hui Autonomous Region Shizuishan Intermediate People’s Court Civil Judgment (2018) Ning 02 Min Zhong No.822. Zhang Junru et al. V. Ji Jiantao Labor Dispute Case Civil Judgment of Chengde Intermediate People’s Court of Hebei Province (2017) Ji 08 Min Zhong No.3567. Civil Judgment of Second Instance of Labor Dispute between Li Wei and Chongqing Dongchuang Hotel Equipment Co., Ltd. Civil Judgment of the First Intermediate People’s Court of Chongqing (2019) Yu 01 Min Zhong No.5982. Civil Judgment of the Second Instance of the Labor Dispute Case between Tang Hui and Zhenjiang District Jinda Oumeida Firm Civil Judgment of Shaoguan Intermediate People’s Court of Guangdong Province (2020) Yue 02 Min Zhong No.1924.
Let’s take Mr. Zhang, an employee in Shenzhen, as an example to illustrate how to calculate double-wage damages. Mr. Zhang joined the company on January 1, 2023, and the company has not signed an employment contract with Mr. Zhang since. On May 1, 2024, Mr. Zhang files a claim with the Labor Arbitration Commission against the employer for double-wage damages in the absence of a written employment contract.
Under the first category of rule, the compensation period for which he would have been entitled to double-wage damages is from February 1, 2023 to December 31, 2023. But because he initiated the arbitration too late, the part he can claim is from May 1, 2024 to May 1, 2023 (one year before the claim date). Therefore, the period during which he can receive the damages is from May to December 2023, that is, the overlapping period is from May 2, 2023 to December 31, 2023. During this period of 8 months, Mr. Zhang’s wage income (including overtime wages, bonuses, allowances, etc.) was calculated and used as double-wage damages. Obviously, under this rule, Mr. Zhang lost all his rights when he filed for arbitration on December 31, 2024 (because there was no overlapping interval).
However, if under the second practice, Mr. Zhang¡¯s right is regarded as a whole from February 1, 2023 to December 31, 2023, so the latest time for Mr. Zhang to initiate employment arbitration is December 31, 2024, he can still get double-wage damages corresponding to the period from February 1, 2023 to December 31, 2023 (totally 11 months of wages). If Mr. Zhang initiates employment arbitration one day later, Mr. Zhang will not be able to get double-wage damages at all because of the limitation of arbitration. Therefore, the second kind of rules are more favourable to workers than the first kind of practice.
In addition, if an employee has a work-related injury or labor dispute during the aforementioned one-year period, it may constitute an interruption of the limitation of arbitration. That is to say, in the aforementioned case, if the employee has a work-related injury and has been treated for two months, the last day of the employee’s one-year limitation of arbitration, December 31, 2024, can be postponed to February 28, 2025. The legal effect of this interruption is to give the employee a grace period to claim double-wage damages.4Civil Judgment of the Intermediate People’s Court of Qiannan Buyi and Miao Autonomous Prefecture of Guizhou Province (2015) Qiannan Min Zhong Zi No.422 in the case of labor dispute between Peng Yongzhong and the Third Engineering Co., Ltd. of China Railway Seventh Bureau Group. In the case, both parties had a dispute over the factual employment relationship after the employee was injured at work, and the court held that this was an interruption of limitation of arbitration.
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- 1Xiong Jinhui Labor Dispute Civil Judgment of Second Instance of Shenzhen Intermediate People’s Court of Guangdong Province (2017) Yue 03 Min Zhong No.1329, Guo Yuqing, Guangzhou Xinyi Trading Co., Ltd. Labor Dispute Civil Judgment of Second Instance of Guangzhou Intermediate People’s Court of Guangdong Province (2019) Yue 01 Min Zhong 20726 No., Jiujiang City and New Energy Technology Development Co., Ltd., Xu Faqing Labor Dispute Second Instance Civil Judgment Jiangxi Jiujiang Intermediate People’s Court Civil Judgment (2018) Gan 04 Min Zhong No.2077, Labor Dispute Appeal between Sichuan Xinyun Labor Service Co., Ltd. and Liu Haijun Civil Judgment of Chengdu Intermediate People’s Court of Sichuan Province (2014) C.M.Z.Z. No.1402, No.1403, Li Shuzhong and Huaian Ningxin Property Service Co., Ltd. Civil Judgment of Second Instance of Labor Dispute Civil Judgment of Intermediate People’s Court of Huaian City, Jiangsu Province (2019) Su 08 Min Zhong No.1476. Tiedong District Wangski Pet Products Beauty Shop, Gao Yipeng Labor Dispute Civil Judgment of Second Instance Civil Judgment of Anshan Intermediate People’s Court of Liaoning Province (2023) Liao 03 Min Zhong No.908. Anhui Chuangjinghui Precision Manufacturing Co., Ltd., Li Lei Labor Dispute Second Instance Civil Judgment Anhui Hefei Intermediate People’s Court Civil Judgment (2020) Wan 01 Min Zhong No.4380.
- 2Another situation is that the parties continue the employment over one month after the previous fixed-term contract¡¯s expiration. It is very complicated to determine whether the employer is liable for double-wage damages. This reflects the legislator¡¯s lack of foresight regarding the complexities in practical situations when creating new rules.
- 3Tianjin Daan Electric Vehicle Co., Ltd., Civil Ruling on Labor Dispute Retrial Review and Trial Supervision of Jiaman Tianjin High Court Civil Ruling (2020) Jin Min Shen No.1211. Ou Lianghong v. Zhaoyuan Zhengbang Machinery Co., Ltd. The civil judgment of Shandong Provincial People¡¯s High Court on labor dispute retrial was issued on July 21, 2016 (2016) Lumin Zai No.400. Labor Dispute Case of Shen Xiaohong v. Qinghai University Civil Judgment of Qinghai High Court (2015) Qing Min Ti Zi No.29. Luoyang Kaikai Food Development Co., Ltd. and Li Hongjun’s application for retrial of labor disputes, Henan Provincial People¡¯s High Court Civil Ruling (2021) Yumin Shen 9853. ¡°The employer’s liability to pay double-wage damages to workers for not signing an employment contract should be regarded as a debt of regular payment with integrity and relevance, and the limitation period of arbitration shall be calculated from the final date of expiration of the performance period, that is, from the date of one year after the date a written employment contract should have been signed.¡± Beijing Banmo International Engineering Design Co., Ltd. Tibet Branch, Linmou Labor Dispute Civil Trial Supervision Civil Ruling Tibet Autonomous Region High Court Civil Ruling (2021) Zang Min Shen No.114. Labor Dispute between Cao Gangyan, Shanghai Wuzhu Garment Co., Ltd. and Wuzhu Garment (Foshan) Co., Ltd. Civil Judgment of Foshan Intermediate People’s Court of Guangdong Province (2019) No.06 Minzhong 13391. Civil Judgment of Second Instance of Labor Dispute between Beijing Huayuxing Property Management Co., Ltd. and Zhang Jianguo Civil Judgment of the Second Intermediate People’s Court of Beijing (2021) Jing 02 Min Zhong 11230 No. Shizuishan Huiyi Metallurgical Industry and Trade Co., Ltd. and Chen Zhanqing Labor Dispute Second Instance Civil Judgment Ningxia Hui Autonomous Region Shizuishan Intermediate People’s Court Civil Judgment (2018) Ning 02 Min Zhong No.822. Zhang Junru et al. V. Ji Jiantao Labor Dispute Case Civil Judgment of Chengde Intermediate People’s Court of Hebei Province (2017) Ji 08 Min Zhong No.3567. Civil Judgment of Second Instance of Labor Dispute between Li Wei and Chongqing Dongchuang Hotel Equipment Co., Ltd. Civil Judgment of the First Intermediate People’s Court of Chongqing (2019) Yu 01 Min Zhong No.5982. Civil Judgment of the Second Instance of the Labor Dispute Case between Tang Hui and Zhenjiang District Jinda Oumeida Firm Civil Judgment of Shaoguan Intermediate People’s Court of Guangdong Province (2020) Yue 02 Min Zhong No.1924.
- 4Civil Judgment of the Intermediate People’s Court of Qiannan Buyi and Miao Autonomous Prefecture of Guizhou Province (2015) Qiannan Min Zhong Zi No.422 in the case of labor dispute between Peng Yongzhong and the Third Engineering Co., Ltd. of China Railway Seventh Bureau Group. In the case, both parties had a dispute over the factual employment relationship after the employee was injured at work, and the court held that this was an interruption of limitation of arbitration.