Laws of the People's Republic of China

the Supreme People's Court

The Circular of the Supreme People's Court on Bringing Trial Function into Full Play and Taking Practical Measures to Maintain the Stability of Enterprises and Society

Fa [2002] NO. 132

June 21, 2002

The Higher People's Courts of all provinces, autonomous regions, and municipalities directly under the Central Government, Military Courts of PLA, the Production and Construction Corp Branch of the Higher People's Courts of Xinjiang Uyghur Autonomous Region:

Recently, the circumstances that the enterprise staff and workers assemble and the mass appeal to the higher authorities for help occur continually in some places, which affects the enterprises' normal production and operation order and local social stability. Along with the deepening of the state-owned enterprises reform and the adjustment of economic structure, the deep-rooted contradictions in the enterprises mechanism and internal interest conflicts of enterprises are becoming furious, and all kinds of contradictions and disputes resulting from it will increase further. We shall attach importance to the situation that more and more internal interest conflicts of enterprises are reflected in various trials of the people's courts in the form of various litigations. The public pays extensive attention to the cases in that the trials and enforcements of the people's courts concern enterprises. If these cases are dealt with incautiously, it will easily lead to mass events. It is the important task of the trial of people's courts to bring trial function into full play, deal appropriately with all kinds of contradictions and disputes concerning enterprises, maintain the enterprises' normal production and operation order and the broad staff and workers' legal rights and interests, and keep stability of enterprises and society in the current and future period. Therefore it is hereby notified as follows:

1.

Overall situation consciousness shall be further strengthened, and the role of trial on the maintenance of the stability of enterprises and society shall be brought into full play.

Enterprises are main market players in the socialist market economy system. Only when enterprises are enlivened can market be enlivened; only when enterprises develop can economy develop; only when enterprises are stable can the society be stable. The reformation of state-owned enterprises is the central part of the socialist market economy system. Nowadays, the reform of state-owned enterprises is on the stage of assaulting fortified positions. While the paces of state-owned enterprises' reorganization and transformation accelerate, the adjustments in ownerships structure and industries structure is strengthened, the laid-off workers increase largely, and the social security system is not perfect, some deep-rooted contradictions in the state-owned enterprises are displaying step by step and the interest conflicts are becoming furious, which shows the features of outstanding contradictions and increasing disputes. At the same time, many new circumstances and problems appear in the non-state enterprises during the process of rapid developments. Especially in some enterprises with foreign investments, private enterprises and individual economic organizations, the violation of the labor, security and social insurance laws and regulations and infringement on the legal rights and interests of staff and workers exist in large numbers some of which are quite serious. The mass, sudden and vicious incidents resulted from labor-management disputes happen frequently. If these problems can't be solved timely and properly, it will not only interfere with internal reform, production and operation of the enterprises gravely, but also cause disadvantage influences to the overall situations of state reform, development and stability. The people's courts are the judicial organs, and play an irreplaceable and important role in safeguarding state-owned enterprises reform and keeping enterprises stable. The courts at all levels shall start from the high requirements of adhering to Deng Xiaoping Theory and practicing "Three Represents" of comrade Jiang Zemin to recognize profoundly the importance of safeguarding state-owned enterprises reform and maintaining enterprises stable and to strengthen further overall situation, responsibilities and safeguard consciousness, adjudicate fairly and timely by law all kinds of cases relating to reform, development and stability of enterprises, and make full use of the standardization, instructive, adjusting and safe-guard effect of law on various interest relationship involved in the reform of enterprise. Not only shall the internal reform of enterprise be guarded, but also the legal rights and interest of the workers shall be protected to ensure that the trial can obtain good legal effect and social effect. While a people's court handles cases strictly by laws, it shall pay attention to all-round work, and prevent contradictions from being sharpened or state of affairs being expanded during the trials process. Especially as to the mass disputes, courts shall pay great attention to them ideologically, organize the work elaborately, and dissolve contradictions, rationalize relations, stabilize popular sentiments, and maintain orders through the trial of cases to provide powerful judicial safeguard and service to reform, development and stability.

2.

The "strike-hard" campaign shall be continued deeply to create the sound public security environment for enterprises.

It is of great importance on the assurance of the reform of the state-owned enterprise and the development of various kinds of enterprise to construct and maintain a long-term stable public security environment. Since the strike-hard campaign, the increasing trend of criminal cases is limited to some extent, but the situation of public security is still austere. The courts at all levels shall continue actively and effectively carrying out further the strike-hard campaign and do a good job in the trial of material criminal cases and without delay. With respect to the criminal case in that the antagonism force, terrorist force, religious extremist force and separatist force home and abroad, and the evil cult such as Fa Lun Gong make use of the difficulties of enterprises and the unstable factors thus existed to conduct destruction and make troubles, the case in that criminal syndicate crimes and crimes by gangster evil force that seriously undermine social security and the order of production and operation, the cases in that violent means are adopted to revenge the society or the managers or employees of enterprises are killed due to the unsatisfactory with the reform of state-owned enterprise, and the cases in that the assets of enterprises are plundered by crowd, stolen or the production materials, equipments are destroyed on purpose shall be tried timely without any delay and the criminals thereof shall be severely punished quickly with heavy penalty in accordance with law.

3.

Various economic crimes shall be punished severely according to law to protect the order of the socialist market economy.

The courts at all levels shall continue participating actively in the rectification and standardization of the order of socialist market economy, and crack down upon, in accordance with law, all kinds of material crimes undermining the order of the socialist market economy. The crimes infringing on the legal rights and interests of enterprise such as the production and sale of fake or substandard commodities, upon trade mark rights, patent rights and commercial confidentialities, undermining the commercial creditability and fame of commodities, bidding in collaboration, fraudulence of contracts and the crimes undermining the order of socialist market economy such as smuggling, falsely filling out value-added tax invoices, tax evasion and refusal to pay tax by force, financial fraud, illegal business activities shall be severely punished and dealt with in accordance with laws to maintain the rights and interests of enterprise and the order of market management. And at the same time, the crimes materially impairing the rights and interests of shareholders and investors such as the reporting falsely registered capital and drawing back the investment by the enterprise or the staff of the enterprise, illegal absorbing public deposits, issuance of stock, bonds without authorization or by fraudulence, inside trading, compiling and distributing false information, provision of false financial statements and warranties, rigging the transaction price and disturbing the securities market shall be punished with severity in accordance with law.

4.

Various corruption crimes shall be punished severely according to law to protect the state-owned assets and the interests of the employees of enterprises.

It is the current key point of the fight against corruption to do a good job in the trial of the corruption crimes of the leaders and carders in the Party and political authorities, administrative executive authorities, judicial authorities and economic management authorities and the leader and carders over a county or higher level and the leaders of state-owned enterprises, which is also the demand of the maintenance of the stability of enterprise. The crimes such as the corruption and bribery, embezzlement of public money, unauthorized partition of state-owned property, conducing business that is the same as that of the company or enterprise in which one takes office, illegal profiteering for relatives and friends, especially crimes of peculation, unauthorized partition and embezzlement state-owned assets taking the advantage of the reorganization, alliance, merge, lease, contract or adoption of stock system of state-owned enterprise, crimes in that the social security funds of various kinds are defalcated, embezzled, partitioned collectively without authorization, and the crimes of taking bribe, irregularities for favoritism, under-evaluation of state-owned assets that cause loss to the state-owned assets during the process of the merger of enterprise involving the transfer of property titles shall be punished severely in accordance with law. The civil servant who extorts and accepts property from non-state-owned enterprises by taking the advantages of his position shall be severely punished. The anti-corruption fight shall be combined with the hard-strike rectification and standardization of the order of the market economy and those corrupted and malpractice criminals who act as the back or shelter for various kinds of crimes or shall be responsible to the material liability accident, material laboring safety accident, material project safety accident shall be severely punished in accordance with laws.

5.

The work concerning civil, commercial and administrative trial and enforcement shall be handled well to create a sound social environment for the legal system for reform and development of enterprises.

The courts shall do a good job in the trial of the dispute case that occurs in the reorganization, combination, merger, contract, and investment to enterprises to safeguard the smooth completion of the strategic reorganization of state-owned enterprise. The cases involving the merger, bankruptcy and shut-down of the state-owned large or medium enterprise shall be dealt with properly strictly in accordance with the relevant laws, regulations, rules, policies and judicial interpretations; with respect to the assets reorganization cases involving the change of property right such as enterprises merger etc., the assets appraisal shall be standardized strictly by laws so as not only to prevent the state-owed assets from flowing out, to prevent bank loans or state tax money from evasion and abandonment or from turning into mere figurehead, but also to promote enterprises to increase capital and decrease debts and realize the assets reorganization. The courts shall do a good job in the hearing of the case with disputes occurred in establishment and improvement of modern-enterprise system of the state-owned enterprises by laws to maintain according to law the managerial autonomy and the state administration of state-owned assets. And the trial of the cases involving stock rights, creditor's rights, debt of the state-owned enterprises shall be done well to safeguard and promote the strengthen of direct investment and financing of enterprises, and to maintain the controlling ability of state-owed economy and the lawful rights and interests of banks and other creditors. The labor deputes cases shall be tried timely and properly to protect the lawful rights and interests of laborers by laws, promote the reform of labor system, and at the same time support enterprises to strengthen and improve the managements. The way of trial shall be used to solve timely and fairly the disputes occurred in the process of economic communications of enterprises and to protect the enterprises that participate in fair competition and engage in the lawful operation, and to maintain the market economic order and transaction safety. The administrative cases involving state-owned enterprise shall be tried in accordance with laws. The arbitrary charge, arbitrary fines and arbitrary apportion and other activities infringing on the legal rights and interests of enterprise shall be strictly forbidden and the exercise of administrative functions according to law by the administrative authorities shall be supported. The case involving the key projects or engineer construction with big disputed amount and influencing greatly the production and development shall be quickly registered and tried, and concluded timely. Courts at all levels shall conclude timely the civil and commercial cases relating to the stability of the enterprise in accordance with law. And those law-violating activities by taking the advantage of the transformation of enterprise to avert or evade the liabilities shall be punished severely so that the legal rights of the infringed enterprise can be protected.

All courts shall maintain, in accordance with law, the specific administrative act made in accordance with law by the administrative authorities in the rectification and standardization of the market order. The people's court shall revoke the administrative act that is made by administrative authorities and encroaches the operation autonomy rights of enterprise. Where the administrative authorities fail to exercise statutory duties so that the legal rights and interests of enterprise can't be protected, the people's court shall determine the administrative authorities to perform its statutory duties.

The execution concerning the interests of the enterprise, especially of enterprise in difficulties shall be done well to eliminate the unstable factors due to weak execution. Practical measures shall be taken to solve the execution of the debt of enterprise and to overcome the local protectionism and powerful measures shall be taken to solve the difficulty of execution in different cities. The executing courts shall pay attention not only to prevention of the social unstable factors due to weak execution, but also to the social unstable factors arising from arbitrary execution. With respect to the execution case concerning the stability of enterprise, special attention shall be paid, based on precondition of execution in accordance with law, to the execution art and execution methods and the combination of legal effects and social effects of execution.

6.

The reception of the appeal of the mass to higher authorities for help shall be done well and the group appeal instance shall be dealt with appropriately

The courts at all levels shall pay special attention to the contradictions among the people under this new situation, and take practical measures to do a good job in dealing with accurately the contradiction among the people as the political task in maintaining the stability of the enterprise. The appeal by letter or by visit shall be handled as of the same importance of trial. The appeal by letter or by visit of the mass shall be done well and carefully to dissolve the contradiction. With respect to the appealer, especially the group appealers of laid-off workers, they shall be patiently educated and guided; the people's court shall earnestly find out their difficulties and give assistance to solve real problems to prevent the intensification of the contradiction. The channels shall be broadened and the horizontal communication shall be strengthened. Active contact with related authorities shall be made to bring forward negotiating and assisting proposals with respect to the complicated and difficulty appeal cases. The appeal visitors shall be guided properly and protected in accordance with law in the exercise of rights. The work of stopping litigation and obeying the decision by related parties shall be done well and the dissemination of laws, persuasion and education shall be strengthened to dissolve the antagonizing mood of these parties. The case with surely wrong decision shall be registered timely for examination and the error shall be corrected in accordance with legal procedures to maintain the legal rights and interests of the parties. Where the former decision is right and the parties thereto who do not have appeal causes stick to appeal for a long time, effective measures shall be taken based on the support strived for from related authorities, to solve this problem and to maintain the regular work order of the people's court.

7.

They shall participate actively in the comprehensive governing of maintaining the stability of enterprise and the society in combination with the trial

Courts at all levels shall summarize continuously the experience of trials concerning the interests of many employees of the enterprise and give suggestion and plan concerning the stability of enterprise to related authorities by way of judicial advice. Laws shall be disseminated in combination with the typical case of protecting the legal rights and interests of the enterprise legally operated and the employees of enterprises and by many ways to maintain the authority of the Party, the government and the judicial authorities and increase the awareness and ability of the mass to maintain the rights and interests of themselves by legal measures.

8.

They shall strengthen the leadership and specify the liability and implement the work of maintaining the stability of enterprise and society.

This year is the first year after the entry of our country into WTO and the Sixteenth National Congress of the CPC is about to be held. It is of special importance to do well all kinds of trial and take practical measures to maintain the stability of enterprise and society. The leaders of courts at all levels shall take practical measures to strengthen the leadership in the maintenance of the stability, establish capable work agency based on the existing team of leaders for the maintenance and in combination with the division of trial work to perfect all systems, specify the scope of function and liability and do well the implementation. In combination with the trial work and the reality, the situation shall be periodically analyzed to get clear about the problems and case that influence or may influence the stability of enterprise and society and promulgate practical and feasible counter measures and implement them without delay to assure the real effect. Courts at all levels shall stick to the rules to report material events to the local committee of the Party and related authorities timely and level by level, find out the symptom and information of the factors that might influence the stability of enterprise and society. With respect to the events influencing the stability occurred or found out in the trial, in addition to the control measured that shall be quickly adopted, it shall be timely reported level by level without delay and disguise. Special attention shall be paid to the prevention of the occurrence of the material events influencing the stability of enterprise and society due to mistakes in the trial. Courts at all levels shall, after the receipt of this circular, put forward implementing measures in combination of the local reality and submit to us the written report of the implementation.