The highest court in China recently released new interpretations regarding the application of laws in labor dispute cases, which took effect on September 1, 2025. These bring clarity to a range of employment issues in China, address challenges, update previous interpretations, and aim to unify legal practices across regions.
On August 1, 2025, China’s Supreme People's Court issued the Interpretations of the Supreme People's Court on Some Issues Concerning the Application of Laws for the Trial of Labor Dispute Cases II (Interpretation II), effective September 1, 2025. Interpretation II differs significantly from the first draft that was released in December 2023.
For example, the December 2023 version released for public comment included some controversial clauses, such as the scope for accepting labor disputes related to employee stock incentives, a restriction against arbitration of claims involving compensation for accrued but unused annual leave, and protections for workers who have reached the statutory retirement age but have not yet started receiving pension benefits, among others. Interpretation II does not address these issues, thereby leaving these issues to be decided on an ad hoc basis by courts across the country.
Interpretation II marks a significant development in employment law since the first new interpretation which took effect on January 1, 2021 and supersedes the previous four interpretations. Interpretation II responds to recent developments in...
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