Public Institutions

Ms. Yan is the accountant of a public institution and is classified as a worker in the catalogue. Her status caused trouble when she wanted to resolve disputes through the Ministry of Personnel, Labor Arbitration Commission and the Court. Every one tries to give advices to Ms. Yan. Will the dispute and appeal be accepted by the Ministry of Personnel, Labor Arbitration Commission or the Court?

I. Case Playback

For 10 years, Ms. Yan had a stable job and good salary as the only accountant in a public institution. When Ms. Yan was 45 years old, superiors began to persuade Ms. Yan to retire from her current job. And it was said to be an official decision by upper-level management. Ms. Yan was shocked by this news and wondered what would happen if she retired and who would replace her, as she was the only accountant. Moreover, she never saw the official decision from the superior unit. Therefore, she continued work diligently as usual until the management could produce the official documents about the decision.
One year later, superiors from the public institution talked to Ms. Yan again and told her that the finance department was merged into the superior unit. Ms. Yan was ordered to hand over the accounting documents within three days. Ms. Yan was unsure how to proceed because she did not see the official decision documents. Accountants can only hand over the accounting documents provided that she received the official decision and met the people to whom the documents are transferred. Under such circumstances, Ms. Yan continued to keep the seal, chop and relevant accounting documents.
However, the public institution reported to the Public Security Bureau that the accounting seal and chop were lost and then made a new set of the seal and chop. Thus, the seal and chop kept by Ms. Yan became void and useless.
The public institution finally gave Ms. Yan the official written decision on the suspension of Ms. Yan’s current job. The decision said, “Ms. Yan was suspended from her current job due to her refusal to obey the decisions of superior units regarding her job assignment. During the suspension, only living expenses will be paid.” Also, Ms. Yan was requested to write a review report within two weeks.
In the May of the same year, Ms. Yan was notified that she was fired by the public institution. According to the decision, Ms. Yan was reassigned from her current accounting job to a new administrative job. Ms. Yan did not accept the arrangement and thus was fired. However, Ms. Yan never knew why the public institution assigned her to another position and did not know anything about the proposed administrative job. On May 23, the public institution rescinded Ms. Yan’s work attendance card, which meant that Ms. Yan no longer needed to work.
Ms. Yan of course was not satisfied with the public institution’s decision. She never thought that superiors in the public institution would reassign her to another position. She also never saw any official documents about the reassignment, so it could not be considered to have disobeyed such decisions.
Because she was the official personnel of the public institution, Ms. Yan went to the Ministry of Personnel. However, after checking her status, Ministry of Personnel found out that even though she worked as an accountant, Ms. Yan was classified as a worker. Ms. Yan was notified that Ministry of Personnel only supervised cadres not workers and she should therefore file her complaint with the Labor Arbitration Commission.
Receiving the reply of Ministry of Personnel, Ms. Yan immediately submitted her application for a labor dispute arbitration demanding that the public institution withdraw the decision and pay her wages. The Labor Arbitration Commission rejected her application on the grounds that Ms. Yan was the official personnel of the public institution, and was not regulated by the Labor Law. They concluded that the Labor Arbitration Commission did not have jurisdiction over Ms. Yan’s case.
 Ms. Yan took her case to the Court, because she did not know who should resolve this dispute. The Court accepted to hear her case and put it on the docket. Ms. Yan valued this opportunity to seek justice and made preparations for the trial.
This case was processed as a labor dispute, but it was rejected for a hearing due to its procedural illegality. After 15 months passed, the judgment of the Court astonished Ms. Yan. She thought personnel of the public institution governed as an enterprise would be covered by the Labor Law. However, the public institution in which Ms. Yan formerly worked was a unit sponsored and financed wholly by the local government and was not classified as a public institution governed as an enterprise. Even though the plaintiff was official personnel, Ms. Yan and public institution had never entered into a labor contract, therefore the relationship was not subject to Labor Law or within the jurisdiction of the Court. Ms. Yan should file her complaint with another authority instead of the Court. Simply, the Court shut its door to Ms. Yan.

II. Legal Background

In China, the personnel relationship can be a rather complicated concept and is difficult to define. It includes not only the relationships between State authorities and its affiliated working personnel but also the relationships between public institutions and its management personnel and technicians. With respect to the administration of cadres, there is a specialized administration authority, specialized policies and regulations, and a specialized dispute resolution authority, even some specialized personnel labor markets.
The problems concerning the personnel relationship have emerged as the market economy continues to prosper in China. Many units have modified their recruiting systems and established labor relationships to keep pace with the changing needs of the market economy. Employers and laborers now establish relationships based on a labor contract and mutual-selection principle. State authorities are acting as the social administrators, putting into management mode of the civil servants by making employees both subject to management and also implementers of management functions.
However, the recruiting system of public institutions is still adapting and adjusting to the changes underway since the economic reform and opening. On one hand, public institutions are using the mutual-selection recruiting system similar to the tactics of private enterprises. On the other hand, the salary and benefits systems of public institutions are more similar to that of the Civil Service. Such inconsistencies within the system during such a process of transformation are bound to create obstacles and friction. Regarding application of the law, the Labor Law is not applied in cases of public institutions and does not protect employees’ rights because the personnel relationship between laborers and the public institution does not comply with that between employees and enterprises due to public institution’s persistence on using different management system from enterprises. In the case above mentioned, Ms. Yan could not find a way to file her complaint largely because the definition of relationship between the public institution and laborers remains vague and unclear.
To avoid the awkward legal status of public institutions in terms of personnel relationships, the Labor Contract Law stipulates in Article 2, Sub-Article 2: This law is also applicable for state authorities, public institutions and social organizations to set up, engage, perform, modify, dissolve and terminate employment relations with laborers. In addition, Article 96 stipulates that: “Where the laws, administrative regulations or State Council has formulated separate, special regulations concerning pinyong (hiring) contracts  practiced by the public institutions, such regulations shall prevail Namely, apart from the staff in the public institution who sign the pinyong contracts with the institution and are under the adjustment of relevant regulation of the pinyong system and management of Ministry of Personnel, the remaining staff in the public institution shall all apply the Labor Contract Law. Such regulation is optimistic to decrease unnecessary conflict between different systems.

III. Media Debate

Party for Ms. Yan:

Ms. Yan is classified as a worker and is subject to the Labor Law. According to the explanation of the Labor Administration, employees of public institutions are subject to the Labor Law under the following circumstances: 1. Official personnel of public institutions are those who do not enjoy benefits and salaries according to Civil Service standards; 2. Non-official personnel of public institutions which are managed as enterprises; 3. Employees who enter into a labor contract (including pinyong contract) with public institutions. All personnel of public institutions whose status is equivalent with a civil servant are not protected by Labor Law. Therefore, two kinds of personnel relationships exist: one is an administrative relationship and the other is an employment relationship.
In the case above mentioned, Ms. Yan is an official personnel of a public institution but her status is listed as a worker who does not enjoy the salary and benefits in accordance with the Civil Service standards. Therefore, the relationship between Ms. Yan and public institution is classified as an employment relationship.  The explanation from the Labor Administration also specifies that the disputes between public institutions and workers are classified as labor disputes. The same conclusion can also be reached according to the pinyong (hiring) contract.
Under circumstance 3 in the previous paragraph, the pinyong contract is a way to establish an employment relationship. According to the regulations of Ministry of Personnel, public institutions should enter into a pinyong contract with any laborer or worker. The public institution for which Ms. Yan worked should enter into a pinyong contract with Ms. Yan. Although Ms. Yan does not have a pinyong contract with the public institution, it is not Ms. Yan’s fault and the public institution should not deny the actual employment relationship between Ms. Yan and her public institution. Also, though the Court decided that Ms. Yan should rely on the Ministry of Personnel for resolution, the Ministry of Personnel did not actually put it on record. Ms. Yan’s legal rights can be protected under the current legal regime and the Court should accept the complaint by Ms. Yan and put it on record.

Party for the Public Institution:

Though Ms. Yan’s status is a worker, she is an official personnel of the public institution. According to relevant clauses in Temporary Method of Public Institution in Shanghai to Carry Out the Pinyong Contract promulgated by the Shanghai Ministry of Personnel in 1995, all public institutions should enter into a pinyong contract with personnel except those who enjoy salary and benefits based on the Civil System. Method of Public Institution in Shanghai To Carry Out the Pinyong Contract also stipulates that under certain circumstances the public institution should hire personnel according to the number of vacancies for official personnel and the requirements of the post, not according to the status of the personnel, whether she is a worker or a cadre.
Ms. Yan had been working in the public institution for more than 10 years and did all the things that a cadre would have done. The public institution should enter into a pinyong contract with Ms. Yan, no matter whether she was classified as a worker or a cadre.
Method of Public Institution in Shanghai to Carry Out the Pinyong Contract further stipulates that under the circumstance that a pinyong contract should be entered into but in deed is not signed, the employment relationship still exists and the employee’s rights are protected so long as the employee fulfills his/her duties as required by the public institution. As mentioned before, the public institution that Ms. Yan worked for should have entered into a pinyong contract with Ms. Yan but did not, which qualifies the situation as one in which a pinyong contract should be entered into but, in fact, was not. Yet, in the case, Ms. Yan and her public institution had formed an actual employment relationship from which the disputes arising should be resolved according to the regulations on disputes concerning the employment relationship.  According to The Method of Dispute Disposal for Pinyong Contract of Public Institution in Shanghai, all disputes arising from pinyong contracts shall be subject hereto and governed by the Labor Arbitration Commission. Therefore, Ms. Yan should file her complaint with the Labor Arbitration Commission, which should accept the complaint.

From LexisNexis