—The Important Impact of the New Regulations on the Similar Cases Retrieval on Enterprise Labor Risk Management

The promulgation of the New Regulations on the Similar Cases Retrieval

The promulgation of the New Regulations on the Similar Cases Retrieval was not accomplished overnight. Prior to this, the Supreme People’s Court, Beijing Higher People’s Court, Jiangsu Higher People’s Court, Shanghai No.1 Intermediate People’s Court, No. 2 Intermediate People’s Court, and Shenzhen Intermediate Court have published relevant documents for Similar Cases Retrieval. The New Regulations on the Similar Cases Retrieval have made more detailed rules, not only confirming the universal application of the Similar Cases Retrieval mechanism across the country, but also enhancing the importance of the Similar Cases Retrieval mechanism, and clarifying the standards and methods of specific operations. As per the New Regulations on the Similar Cases Retrieval , a court is required to retrieve similar cases under certain circumstances, and judges should make judgments in accordance with or refer to similar cases.

After that, the Supreme People’s court and the Ministry of Human Resources and Social Security jointly issued the first batch of guiding cases of labor and personnel disputes immediately, and local courts have also successively issued corresponding guidance documents. It can be predicted that the New Regulations on the Similar Cases Retrieval will have a profound and important impact on the judicial practice in China, including the judgments of labor dispute cases.

The New Regulations on the Similar Cases Retrieval will have a profound impact on enterprise labor risk management

Under the New Regulations on the Similar Cases Retrieval, the “similar cases” refer to cases that have similarity with pending case in basic facts, focus of dispute, the application of law and so on, and have been judged by the court and in force. According to the different nature of the similar cases, the court should make judgment according to the similar cases or may use the similar cases as a reference for the judgment.

The New Regulations on the Similar Cases Retrieval have brought new systemic risks to enterprises. Enterprise human resource management has the characteristics of uniformity and typology, which means that labor disputes involved in enterprises can easily be classified into similar cases in terms of basic facts and dispute focus. Once the lost case forms a precedent, the subsequent disputes are likely to continue the adverse judgment, and the adverse judgment may induce a new round of litigation of similar cases, which may bring the enterprise a “collapsed” human resources risk outbreak, and increase the cost of responding to labor disputes. But on the contrary, once the case is won and a precedent is formed, the subsequent labor disputes involved are likely to continue the favorable judgment, which will have a “dissuasion” effect on subsequent potential similar cases, and reduce the cost of subsequent labor disputes. Therefore, regardless of the amount of the subject matter, labor disputes will become very risky disputes as long as they constitute a similar case.

Litigation risks bear the brunt of systemic risks. The New Regulations on the Similar Cases Retrieval make the influence of a single labor case to go beyond the case itself and have a certain degree of universal effect within a certain geographical area and on the basis of similar facts. Although the similar cases outside the province or municipality do not belong to the statutory similar cases, they may also be learned by the judges through the retrieval of similar cases, which may have a corresponding degree of impact. After the promulgation of the New Regulations on the Similar Cases Retrieval, apart from that simultaneous cases may obtain similar judgments, similar cases in recent years, similar cases heard by the same court and higher court, and similar cases of enterprises with similar models may all become significant factors that affect the outcome of labor disputes. In addition, recently we have also noticed that in labor arbitration procedures, it is also possible that the Similar Cases Retrieval may have been used for some arbitration awards.

The promulgation of the New Regulations on the Similar Cases Retrieval also means that many problems that existed in the previous legislation and the judicial system that were blank or vague have become clear because of the similar cases. When enterprises are conducting human resource management, they should also conduct research on similar cases in a timely manner, effectively grasp and abide by rules, and obtain better compliance management results.

Suggestions for enterprises to respond to the New Regulations on the Similar Cases Retrieval

According to the statistics released by the court, the proportion of labor dispute cases in which enterprises have won all claims is very low. In the economic context of the pandemic and trade disputes, labor dispute cases occur frequently, so that enterprises are facing challenges from a large number of labor dispute. The promulgation of the New Regulations on the Similar Cases Retrieval has brought a great “leverage effect” to the risks and benefits of labor disputes, and has greatly increased the importance of the similar cases of labor dispute.

Enterprises need to assess the impact of the New Regulations on the Similar Cases Retrieval as early as possible, and strengthen their investment in human resources compliance construction and risk prevention and control. In particular, it is necessary for enterprises to attach great importance to the handling of labor dispute cases that may constitute similar cases, invest more resources, seek support from lawyers with a higher professional level, and strive to pursue favorable judgment results in labor dispute cases, or reach appropriate mediation in a timely manner.