Can jurisdiction be agreed upon for labor disputes?

Keywords: labor disputes | jurisdiction clause

In the course of reviewing labor contracts or dealing with labor dispute cases, we often see the employer stipulating in the labor dispute clause that if a labor dispute arises from the performance of this contract, either party shall apply for arbitration to the labor dispute arbitration committee at the place where Party A is located; if the dispute fails to be settled through arbitration, a lawsuit shall be filed with the people's court at the place where Party A is located. Is it valid for an employer to agree upon such exclusive jurisdiction clause in the labor contract? Can jurisdiction be agreed upon for labor disputes as for other civil and commercial disputes?

Article 21 of the Law on Mediation and Arbitration of Labor Disputes provides that "A labor dispute shall be subject to the jurisdiction of the labor dispute arbitration committee at the place where the labor contract is performed or the employer is located. If both parties apply for arbitration to the labor dispute arbitration committee at the place where the labor contract is performed or the employer is located, the labor dispute arbitration committee at the place where the labor contract is performed shall have jurisdiction."Article 8 of the Interpretation of the Supreme People's Court on Several Issues Concerning the Application of Law in the Trial of Labor Dispute Cases (I) provides that "A labor dispute case shall be subject to the jurisdiction of the basic people's court at the place where the employer is located or where the labor contract is performed. Where the place where the labor contract is to be performed is unclear, the grassroots people's court at the place where the employer is located shall govern the case. "

As can be seen from the above provisions, both the law and the judicial interpretation only stipulate that labor disputes shall be subject to the jurisdiction of the arbitration committee or the court at the place where the labor contract is performed or where the employer is located, but it does not stipulate that the jurisdiction of labor disputes may be stipulated. There are two reasons for the invalidity of agreed jurisdiction for labor disputes: First, the Labor Law is within the scope of social law, and the realization of social equity is its legal value. Article 3 of the Labor Contract Law, which provides that "The conclusion of a labor contract shall follow the principles of legality, fairness, equality, voluntariness, negotiation and agreement, and good faith", reflects its fair value. Secondly, the labor contract relationship is different from general contractual relationship. In addition to certain economic relationship, the parties to a labor contract also have certain personal relationship. Therefore, the jurisdiction of labor contract disputes in the laws and judicial interpretations are mandatory provisions and provisions on jurisdiction by agreement shall not be applied. Since an agreement on exclusive jurisdiction of the type, such as "the labor dispute shall be governed by the place where the employer is located", it is difficult to embody the above principles of fairness and agreement with the employee through negotiation. Such exclusive jurisdiction clause will be deemed invalid due to damage to the litigation rights of the employee.

Since a labor dispute can only be filed for arbitration or be litigated at the place where the labor contract is performed or the employer is located, defining the place where the labor contract is performed and the employer's domicile becomes the precondition for determining the arbitration or litigation jurisdiction. This is specified in Article 8 of the Rules for the Handling of Arbitration Cases Involving Labor and Personnel Disputes, which provides that "the place of performance of a labor contract shall be the employee's actual place of work, and the employer's domicile shall be the employer's place of incorporation or the place where its main administrative office is located."The place of performance of a labor contract can be easily understood, that is, the place where the employee actually works and the place where the employer is located includes two places, one is the place where the employer is registered with the administration for industry and commerce, the other is the place where its main administrative office is located. In practice, it is not common that the place of performance of a labor contract and the employer's domicile are not in the same jurisdiction, or that the employer's place of incorporation and the place of its main administrative office are not in the same jurisdiction. In the event of a labor dispute, the employee can choose either place to file for arbitration or initiate legal proceedings based on the principle of convenience.

In short, the jurisdiction cannot be agreed for labor disputes, and the provisions on jurisdiction by agreement in the Civil Procedure Law shall not apply. No matter which party applies for arbitration or initiates legal proceedings, it can only choose the place where the labor contract is performed or the place where the employer is located; otherwise, the labor dispute will be invalid. Furthermore, there is no principle of precedence between the two places.