Judicial Interpretation Improves Legal Protections for Workers (Story in Chinese)

November 1, 2004

The Supreme People's Court (SPC) recently issued a broad judicial interpretation of the legal rights of contractors and subcontractors, in part expanding the ability of workers to sue to collect unpaid back wages.

Unpaid back wages in China's booming construction industry have been the source of significant labor protests. As noted in a Xinhua report carried earlier this year, developers and contractors often employ a complex network of contracts and subcontracts to avoid legal responsibility for paying workers wages.

The recent judicial interpretation, to come into effect on January 1, 2005, specifies that contractors (in addition to subcontractors) bear legal liability for unpaid wages to workers, and allows workers to directly bring suit against them. Other provisions limit the ability of developers to reduce their legal liability by relying on contractual provisions materially different from the officially filed construction contract.

The reforms likely reflect efforts to compel developers to shoulder increased responsibility for resolving unpaid migrant back wages. The recent SPC judicial interpretation appears to be an effort to provide individual workers with greater ability to recover wages directly from contractors and developers.