Supreme People's Court Interpretation-Labour Disputes

With the perception that labor laws in China are primarily designed to protect employees, the responsibilities of employers have often been left unclear. Especially when disputes arise, this lack of clarity can lead to issues in the interpretation of the law, as courts may either lean towards protecting the employee or the provisions may not be clear about the employer’s obligations. 

在中国，劳动法主要以保护员工权益为出发点，因此雇主的责任较为模糊。特别是在发生劳动争议时，缺乏清晰的责任界定可能会导致法律解释上存在模糊之处。在这种情况下，法院可能会更倾向于保护员工的权益，而相关条款未明确规定用人单位的义务。

On August 1, 2025, the Supreme People’s Court released the Judicial Interpretation of the Supreme People’s Court on the Application of Law in the Adjudication of Labor Disputes(hereafter referred to as Interpretation II), which will take effect on September 1, 2025. This new interpretation aims to address these gaps by offering clearer understanding of the labor laws for resolving labor disputes. This article will focus on three key areas plus additional provisions: affiliated companies, the confirmation of the existence of foreign workers’ employment relationships, and representative offices being parties to disputes.

2025年8月1日，最高人民法院发布了《最高人民法院关于审理劳动争议案件适用法律若干问题的解释》（以下简称“《解释二》”），该解释将于2025年9月1日生效。该新解释旨在填补这些空白，为解决劳动争议提供更清晰的法律解释。本文将重点探讨三个关键领域及相关条款：关联公司、确认外籍员工劳动关系，以及代表处（RO）为争议当事方的地位。

1)Affiliated Company Employment 

1) 关联公司的劳动关系确认 

Article 3 addresses situations where a worker is simultaneously employed by multiple related entities and seeks to confirm the employment relationship. The court shall consider the following circumstances:

第三条规定了员工同时受雇于多个关联实体并寻求确认劳动关系的情形。法院将考虑以下情况：

1.Written Labor Contract: If a worker has signed a written labor contract and requests confirmation of the relationship based on that contract, the court will support the request in accordance with the law.

1. 书面劳动合同：若员工已签订书面劳动合同并基于该合同请求确认劳动关系，法院将依法支持该请求。

2.No Written Labor Contract: If there is no written contract, the court will assess the labor relationship based on employment practices. Some of the important factors to consider include working hours, the nature of the work, wage payments, and social insurance contributions.

2. 无书面劳动合同：若无书面合同，法院将根据用工习惯评估劳动关系。关键因素包括工作时间、工作性质、工资支付及社会保险缴费情况。

In cases where a worker seeks to have an affiliated company jointly responsible for wage payments and benefits, the court will support this request, unless an agreement has already been made between the affiliated companies and the worker regarding compensation and benefits.

在员工要求关联公司共同承担工资支付和福利责任的情况下，法院将支持此类请求，除非关联公司与员工之间已就经济补偿达成协议。

This provision specifically addresses the issue of employers attempting to avoid responsibility by using intricate company arrangements. If an employee requests that an affiliated company share responsibility for wages, benefits, and other entitlements, the court will support such claims provided no prior agreements exist between the worker and the affiliated company. The aim of this rule is to stop companies from relying on outsourcing or multi-entity setups to sidestep their legal duties, ensuring that employees can more easily assert their rights.

本条款专门针对用人单位试图通过复杂的公司架构来逃避责任的问题。当员工要求关联公司共同承担工资、福利及其他劳动者权益时，只要员工与关联公司之间不存在先前的协议，法院将支持此类主张。本规则的目的是阻止公司利用外包或多实体架构来规避其法律义务，确保员工能够更容易地主张自己的权利。

2) 中国境内外国员工劳动关系确认

Article 4 of Interpretation II lays out situations where the Supreme People's Court will support a foreign worker’s request to clarify their employment relationship with their employer. The court will back this request in the following cases:

《司法解释二》第四条规定了最高人民法院支持外国员工请求明确与用人单位劳动关系的具体情形。法院将在以下情况下支持该请求：

1.Permanent Residency:

If the foreign worker has obtained permanent residency in China, the court will confirm the labor relationship.

1.永久居留权：

如果外国员工已获得中国永久居留权，法院会确认其劳动关系。

2.Work Permit Holders:

If the worker has a valid work permit and has legally lived and worked in China, they can also have their employment status confirmed.

2. 工作许可持有人：

如果员工持有有效的工作许可，并且在中国合法居住和工作，也可以确认其劳动关系状态。

3.Following Legal Procedures:

The court will also support a request if the foreign worker has followed all the necessary legal steps required by Chinese law.

3. 遵循法律程序：

如果外国员工遵循了中国法律要求的全部必要法律程序，法院也将支持其请求。

This provision makes sure that foreign workers in China are treated the same as local employees when it comes to their rights, as long as they abide to Chinese labor laws. It gives them the ability to confirm their employment status, which is important for obtaining benefits, enjoying social insurance, and resolving any disputes according to Chinese labor laws. It also helps to protect foreign workers from being taken advantage of by ensuring their employment is legally recognized and not left in a grey area.

该规定确保在中国工作的外国员工与本地员工在权利方面享有同等待遇，只要他们遵守该国法律。这使他们能够明确自己的就业状态，这对获得福利、社会保险以及解决任何纠纷至关重要。它还通过确保其就业得到法律认可并避免处于法律灰色地带，帮助保护外国员工避免不公平对待。

3) 代表处作为法律纠纷的当事人

According to Article 52 of the Judicial Interpretation on the Civil Procedure Law, a representative office (RO) is not considered a legal entity in China and therefore cannot independently initiate legal action. In the case of civil litigation or arbitration, the foreign enterprise must be involved as a party. However, under Article 5 of Interpretation II, a permanent representative office of a foreign enterprise, established in accordance with the law, can participate as a party in labor dispute. If the representative office requests that additional foreign enterprises be included in the proceedings, the People's Court will support this request in line with the law.

根据《民事诉讼法司法解释》第五十二条，代表处（RO）在中国不被视为法人实体，因此无法独立提起诉讼。在民事诉讼或仲裁案件中，外国企业必须作为当事人参与。然而，根据《司法解释二》第五条，依法设立的外国企业常驻代表处可在劳动争议案件中作为当事人参与诉讼。若代表处请求将其他外国企业纳入诉讼程序，人民法院将依法予以支持。

In addition to the focus of the article, two additional provisions to look out for are the non-compete clause and the social insurance agreements.

除本文重点内容外，还需关注两项附加条款：竞业禁止条款和社会保险条款。

4) 用人单位与员工之间关于不缴纳社会保险的约定无效。

Social insurance contributions are mandatory in China. However, it is common practice for employers and employees to sign non-payment agreements or agree on them orally. Sometimes, employees are led to believe that they will receive more money if the contributions are not made, or that the company has commercial insurance, thus eliminating the need to pay social insurance. Article 19 of Interpretation II renders such agreements null and void. If an employer fails to make social insurance contributions in accordance with the law, the employee may immediately terminate the employment contract, and the employer shall pay the statutory severance. After the employer has paid the outstanding social insurance contributions in accordance with the requirements of the competent administrative authority, it may request the employee to return the compensation paid for the non-payment of social insurance contributions as agreed between the parties.

在中国社会保险缴费应当强制缴纳。然而，用人单位与员工签订不缴纳社会保险的协议或者口头上同意不购买社保是一种常见做法。有时，员工会被误导认为不缴纳社会保险可以获得更多钱，或者公司已购买商业保险，因此无需缴纳社会保险。《解释二》第19条明确规定此类协议无效。若用人单位未依法缴纳社会保险费，员工可立即解除劳动合同，用人单位应支付法定经济补偿金。待用人单位按照主管部门要求补缴欠缴的社会保险费后，可要求员工返还双方约定因未缴纳社会保险费而支付的补偿金。

5) 当竞业禁止条款不可执行时

It is common practice for employers to have employees sign non-compete agreements, even when they have no access to trade secrets or confidential information. However, Article 13 clarifies that if a worker does not know or have access to the employer’s intellectual property; the court will uphold the claim that the non-compete clause is not enforceable. Additionally, if the scope, geographical reach, or duration of the competition restrictions is unreasonable, the court will support the worker’s request to void the clause.

用人单位通常会要求员工签署竞业禁止协议，即使员工并未接触过商业秘密或机密信息。然而，第13条明确规定，如果员工并未知晓或接触过用人单位的知识产权，法院将支持员工关于竞业禁止条款不生效可执行的主张。此外，若竞争限制的范围、地域范围或持续时间不合理，法院将支持员工要求撤销该条款的请求。

This ensures that non-compete clauses are only valid when employees are genuinely exposed to sensitive information.

这确保了竞业禁止条款仅在员工确实接触过敏感信息时才具有效力。

结论

The new Judicial Interpretation II addresses important gaps in Chinese labor laws, among them are issues concerning affiliated companies, foreign workers, and representative offices. It provides clearer guidelines on how workers can assert their rights when multiple entities are involved or when employment status is unclear. It also invalidates agreements that avoid social insurance payments and restricts the scope of non-compete clauses. These changes are just some of the key improvements aimed at creating a more balanced and transparent process for resolving labor disputes in China.

新的《司法解释二》填补了《劳动法》体系中的重要空白，其中包括关联公司、外国员工和代表处等领域。它为员工提供了更明确的指导，说明在涉及多个实体或就业关系不明确的情况下，如何主张自己的权利。它还废除了那些规避社会保险缴费的协议，并限制了竞业禁止条款的适用范围。这些变化是中国为建立一个更加平衡和透明的劳动争议解决机制所进行的关键改进之一。

It is vital to stay up to date with the latest changes under Interpretation II, as these updates may affect how companies interact with employees and help prevent future disputes. We have helped many clients address issues such as confirming employment relationships for foreign workers, resolving disputes with affiliated companies, and handling representative offices in legal matters.

《司法解释二》的最新修订可能影响企业用工管理，及时跟进这些条款的更新有助于防范潜在纠纷。我们已协助众多客户处理外籍员工劳动关系认定、关联公司争议解决以及代表处法律事务等各类问题。

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