On 30 July 2008, 21 workers at an automotive company in Xiangfan, Hunan province, applied for arbitration at their local Labour Dispute Arbitration Committee, claiming wages in arrears, unpaid overtime and non-payment of social security contributions.
The 21 workers had joined the automotive company at different times from 2005 to 2008 but in all cases the employer had not signed a labour contract with them, as required by law. The employer refused to pay the employees’ social security contributions, and forced employees to work excessive overtime (up to 24 hours in one continuous shift) with no additional pay. In June and July 2008, the employer failed to pay the employees’ wages in their entirety, with a total of 34,142 yuan outstanding at the end of July.
The workers approached management demanding their wages, and that the company either signs a labour contract with them or formally dissolves their labour relationship. The workers’ demands were rejected out of hand. The employees repeatedly approached the local Labour Supervision Department for assistance, and, with the help of CLB, the case was eventually submitted for arbitration.
The Xiangyang District Labour Dispute Arbitration Committee ruled, on the basis of the Labour Contract Law, articles 50 and 72, that the employer should, within ten days, pay the all of the 21 workers’ social security contributions, and 33,865 yuan in wage arrears. On the basis of Article 82, the employer was ordered to pay each of the 21 employees’ double their monthly wages, a total of 69,238 yuan, for failure to sign a labour contract. The committee also ordered the company to dissolve the workers’ labour relationship.