Recruiting in China

GUANGZHOU - High numbers of company closures and large-scale redundancies have led to a surge in labor arbitration cases in Guangzhou, a senior official said on Monday.

Xie Yingjian, director of the arbitration office of the Guangzhou labor and social security bureau, said that by the end of last month, more than 60,000 applications had been made for arbitration this year.

The figure is about the same as the combined total for the previous two years, he said.

"There has been a sharp increase in the number of cases since May," he said.

"About 60 percent of them are claims for back pay, with most of the rest being appeals for compensation from people who have been made redundant."

In the past few months, the number of applications has been at least double the total for the same period of last year, he said.

"The global economic crisis has led to the closure of many firms, especially labor-intensive ones, and pushed dozens of others to the brink of bankruptcy. Downsizing and lay offs were inevitable," Xie said.

"Also, because arbitration services are now provided free of charge, more people are pursuing labor disputes."

Labor arbitration became a free service across the country on May 1, with the implementation of the labor dispute intermediation law.

Because of the massive increase in demand for arbitration services, Guangzhou currently has a backlog of more than 9,600 cases, some of which might not be completely settled until next September, Xie said.

Peng Peng, a researcher with the Guangzhou Academy of Social Sciences, said it is no surprise to see labor authorities struggling to cope with the heavy workload.

"Guangdong handles about 25 percent of all labor disputes in China each year, yet the province is home to less than 7 percent of the country's arbitrators," he said.

"It's hardly surprising that they have been struggling to cope since the service became free."

Both trade unions and the government should play an active role in trying to prevent problems from escalating into full-scale labor disputes, Peng said.

"If arbitration is necessary, however, the process should be simplified," he said.

"Under the current economic circumstances, the number of labor disputes is likely to keep rising next year, but people who have been made redundant can't afford to wait around for arbitration," he said.