VZCZCXRO4264
PP RUEHCN RUEHGH
DE RUEHBJ #8554 2472249
ZNR UUUUU ZZH
P 042249Z SEP 06
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 5874
RUEHC/DEPT OF LABOR WASHDC
INFO RUEATRS/DEPT OF TREASURY WASHDC
RUCPDOC/USDOC WASHDC
RUEHSH/AMCONSUL SHENYANG 6812
RUEHGH/AMCONSUL SHANGHAI 5715
RUEHCN/AMCONSUL CHENGDU 7058
RUEHGZ/AMCONSUL GUANGZHOU 1369
RUEHIN/AIT TAIPEI 5923
RUEHHK/AMCONSUL HONG KONG 8085
RUEHGV/USMISSION GENEVA 1317

UNCLAS BEIJING 018554 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
DEPT FOR EAP/CM AND DRL/ILCSR 
DEPT PASS USTR FOR KARESH, A. ROSENBERG, MCCARTIN 
LABOR FOR ILAB - CARTER, OWENS, HELM, ZHAO, SCHOEPFLE 
TREAS FOR OASIA/ISA-CUSHMAN 
USDOC FOR 4420/ITA/MAC/MCQUEEN 
GENEVA FOR CHAMBERLIN 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV CH
SUBJECT: SUPREME COURT INTERPRETATION WILL HELP WORKERS 
CLAIM BACK WAGES 
 
REF: BEIJING 17905 
 
(U) SENSITIVE BUT UNCLASSIFIED: NOT FOR INTERNET 
DISTRIBUTION 
 
¶1.  (U) On August 30, China's Supreme Peoples Court 
issued a series of judicial interpretations on handling 
labor disputes.  One of the interpretations will allow 
employees who are owed back wages to go directly to the 
courts for litigation, as long as they can produce IOUs 
or other documentation to prove the debt, and the claim 
involves no other labor-related issues.  Prior to this 
interpretation, courts generally classified wage 
arrears cases as labor disputes, and would not hear 
them unless the worker had first sought relief through 
labor arbitration.  The cost and time required for the 
arbitration process deters many workers, particularly 
migrants, from using it.  The new interpretation will 
go into effect October 1, in time for the annual spike 
in wage arrears claims in the run-up to Chinese New 
Year (late January or early February). 
 
¶2.  (SBU)  Wage arrears cases account for a large 
proportion (41% by government estimates) of labor 
disputes in China.  On August 31, Laboff discussed the 
new judicial interpretation with Liu Cheng, Associate 
Professor at the Shanghai Teachers University Law 
School, and Director of the China Association of Labor 
Law Studies.  Liu welcomed the judicial interpretation 
as a big help to victims of wage arrears.  If workers 
hold IOUs, he said, and many do, the cases are legally 
simple and courts should be able to settle them very 
quickly.  But Liu said the interpretation is only a 
transitional step, and that there should be no need for 
so many court cases.  What China really needs, Liu 
said, is legislation that will effectively prevent wage 
arrears in the first place. 
 
SEDNEY