[Q&A] Suing for Unpaid Wages Outside Labour Arbitration
2025. 12. 19
Question:
Where an employer has failed to pay wages owed to a worker, may the worker bring an action directly before the People’s Court by treating the claim as an ordinary civil debt?
Answer:
In principle, this is not permitted, although exceptions do exist. Under the Labour Law, labour disputes must first be submitted to labour arbitration, and only where a party is dissatisfied with the arbitral award may proceedings be brought before the People’s Court.
However, Article 15 of the Interpretation (I) of the Supreme People’s Court on the Application of Law in the Trial of Labour Dispute Cases simplifies the dispute resolution procedure in respect of unpaid wages. It provides that, where a worker brings an action directly on the basis of a memorandum evidencing unpaid wages issued by the employer, and the claims asserted do not involve any other disputes relating to the labour relationship, such dispute shall be characterised as a dispute over unpaid wages, and the People’s Court shall accept the case as an ordinary civil dispute.
That said, this does not mean that a worker may readily bring proceedings as an ordinary civil dispute. The requirements for a worker to sue the employer directly before the People’s Court by treating unpaid wages as an ordinary debt are relatively stringent. Both of the following conditions must be satisfied simultaneously: first, the evidence supporting the claim must consist of a memorandum of unpaid wages issued by the employer; and secondly, the claims must not encompass any other disputes relating to the labour relationship. In other words, there must be no dispute between the employer and the worker as to the fact that labour remuneration has arisen, the reasons why wages have not been paid in accordance with laws, regulations or the contract, or the validity of the labour contract. Only where all of these conditions are met may the worker directly institute proceedings before the People’s Court as an ordinary debt recovery action.
It should also be noted that a worker may seek relief without undergoing labour arbitration by applying for a payment order. Article 30(2) of the Labour Contract Law provides that, where an employer delays payment of labour remuneration or pays an insufficient amount, the worker may, in accordance with the law, apply to the People’s Court at the place of the employer for a payment order, and the People’s Court shall issue such payment order in accordance with the law.
Furthermore, Article 16 of the Labour Dispute Mediation and Arbitration Law provides that, where mediation in respect of unpaid wages or similar matters is successfully concluded and the employer fails to perform within the time limit stipulated in the mediation agreement, the worker may apply to the People’s Court for a payment order on the basis of the mediation agreement, and the People’s Court shall issue the payment order in accordance with the law. It should be noted, however, that the “mediation agreement” referred to here means a mediation agreement concluded under the auspices of a mediation organisation as prescribed by that Law, and does not include mediation agreements reached through other forms of mediation.