[author]CISLS

[content]

Liu Jian

Doctoral Student, Department of Sociology, Peking University

Abstract: This paper explores the practical process and its emotional and legal implications of labor dispute governance in the context of long-term industrial development, and examines the differentiated issues in local governments' mediation of labor disputes. The research finds that the local industrial foundation and its changes have profoundly shaped the emotional and legal cognition of local governments, leading them to adopt different governance styles for bottom-line disputes and compensation disputes: the governance of bottom-line disputes follows the logic of morality and bureaucracy, tending to substantively guarantee the basic rights of workers, reflecting an orientation of emotional and moral protection and legal pragmatism; the governance of compensation disputes follows the local logic centered on the actual industrial development, tending to protect the operation of local enterprises, demonstrating the regional emotional and rational adjustment of labor law. Although local governments practice "balance of emotion and law" through mediation, it is still necessary to be vigilant against their excessive interpretation of emotional and rational factors and the transfer of workers' rights and interests.

Keywords: Labor disputes; Mediation; Law; Emotional and rational factors; Labor governance

1. Introduction

Since the market-oriented transformation, the unit system has disintegrated and the government and enterprises have been separated. Both employers and employees have pursued their own interests through market games, and eventually a tripartite structure of "workers", "employers" and "the state" has been formed at the labor law level (Sun Liping et al., 1994; Yan Tian, 2022). The social contract originally based on identity has been replaced by the market contract/legal contract, and the permanent labor relationship between workers and their units (states) has evolved into a limited employment relationship between workers and employers (Li Jinfeng, 2013). During this period, collective disputes triggered by the reform of state-owned enterprises began to attract the attention of society and academia (Liu Aiyu, 2003; Tong Xin, 2006; Chen Feng, 2020). Entering the 21st century, labor relations in state-owned enterprises tend to be peaceful, while individual labor disputes in private enterprises continue to increase, affecting many workers, and the types of disputes are becoming increasingly complex (Yao Xianguo, 2005; Chen & Xu, 2012; Zhuang Wenjia, 2013).

In the face of complex and diverse labor dispute issues, the state has not only restored the labor dispute handling system but also regulated labor-capital relations by formulating labor laws. During this process, local governments have played a leading role in the governance of labor disputes. Local governments have adopted methods such as dispute mediation, compulsory stability maintenance, legal deterrence, and emotional consolation to resolve labor disputes (Cai, 2008; Su & He, 2010; Zheng Guanghuai, 2010; Cheng Xiuying, 2012,2015; Wang Jianhua, 2018), reflecting the strategic orientation of resolving incidents. Although previous studies have delved deeply into the techniques and methods for local governments to resolve collective labor disputes, they have relatively overlooked their diverse roles in governing different types of labor disputes and failed to reveal the "emotion-law" logic behind governance strategies, especially paying insufficient attention to the adjustment relationship between labor laws and local public sentiment. Recent studies have begun to pay attention to the regional characteristics of labor politics, pointing out that the industrialization development models of different regions (such as inland cities, the Yangtze River Delta and the Pearl River Delta) have created differentiated labor systems (Wan Xiangdong et al., 2006; Liu Linping, Yong Xin et al., 2011; Wang Jianhua, 2017; Wang Jianhua et al. (2018). The roles of local governments in labor governance vary in different regions. Therefore, analyzing the labor governance process and its changes in a specific region has significant academic value. At present, there is still considerable room for discussion in the academic circle regarding the investigation of specific regions.

This article takes Lixian County in the Yangtze River Delta region as the research object, focusing on discussing the labor dispute governance practices of the labor departments (labor arbitration institute and labor Inspection team) in Lixian County and their legal and emotional implications, and exploring the connection between the local industrial development foundation and its changes and the governance of labor disputes. Based on a specific region, this article examines the phased changes and differences in the governance of labor disputes by local governments from a long-term perspective, thereby demonstrating the complexity and richness of labor politics in China.

2. Literature Review and Research Approaches

2.1 Local government governance in labor disputes

Existing studies usually hold that the state is the core force in resolving labor disputes (Zhuang Wenjia, 2013; Chen, 2016; Chen Feng, 2020). As agents of the state, local governments actually play a leading role in the governance of labor disputes (Yang Zhengxi and Tang Ming, 2008), especially when it comes to major collective labor disputes, the power exerted by local governments is more significant (Chen & Xu, 2012;Zhuang & Chen,2015).

Regarding the responses and governance of local governments to labor disputes (mainly collective disputes), existing research mainly examines the degree and scale of organization of workers' collective actions. On the one hand, relevant literature points out that due to the fact that collective actions may threaten social stability and damage the image of the government, local governments often adopt strategies to maintain stability and undermine the collective actions of workers, such as the "institutional cycle" in the bureaucratic field (Cheng Xiuying, 2015), the deterrence of laws and the restrictions of litigation discourse (Cai, 2008; Cheng Xiuying, 2012, Compulsory Stability Maintenance (Wang Jianhua, 2018), etc. On the other hand, many studies have revealed the response methods of local governments' "inclusive model" (state accommodation). Su Yang and He Xin found that a grassroots court and the government in South China actively intervened in collective labor disputes and often proposed solutions favorable to workers, demonstrating a relatively tolerant coping style (Su & He, 2010). Zheng Guanghuai (2010) proposed the concept of a "soothing state" when examining the relationship between the state and labor in contemporary China, and explored the dual strategies adopted by the state of "spiritual soothing" and "material soothing". Cheng Xiuying (2012) observed in the incidents of laid-off workers from state-owned enterprises defending their rights that local governments often showed sympathy and understanding for the workers, thereby psychologically resolving their confrontational emotions.

Most of these studies emphasize the role of local governments in using "reason and emotion" and "law" to govern labor disputes, reflecting a strategic research orientation. In traditional society, "law" was a detailed definition of "reason and emotion", and local officials' understanding of "reason and emotion" determined the direction of dispute mediation (Huang Zongzhi, 2007; Shiga Hideo, 2023). Some studies suggest that "reason and emotion" have different levels and important social foundations (Li Zehou, 2005; Ling Peng, 2022). Although "law" in today's society is no longer a derivative or accessory of "reason and emotion", but a separate dimension or a key link with the attribute of national governance (Qiang Shigong, 2000; Ling Bin, 2012), a large number of studies in the sociology of law still hold that reason and emotion have a regulatory effect on law, and the government pursues the effect of being both "reasonable" and "legal" in dispute mediation. In the current field of labor dispute governance, academic research on governance strategies themselves (such as the relationship between reason and law) needs to be further deepened.

Some studies have also focused on the changes in the response attitudes and governance styles of local governments at different stages of social development. For instance, Zhang Yonghong (2009) found in his research on the governance of labor disputes in a certain sub-district office in South China that after the Labor Contract Law came into effect in 2008, grassroots governments changed their previous laissez-faire attitude and became more proactive in intervening in labor disputes. The research of Su Yang and He Xin not only expounds the "inclusive" response mode of local governments, but also holds that the emergence of this governance mode stems from the tension between the goal of building a harmonious society and the insufficient capacity of the rule of law faced by the government (Su & He, 2010). Wang Jianhua (2018) noted the institutional background of a large number of collective labor disputes triggered by the industrial structure transformation in the Pearl River Delta region in recent years. He pointed out that "breakage-type" labor disputes characterized by the pursuit of unpaid wages and economic benefit compensation have become the main type of labor conflicts, and local governments have adopted multiple strategies such as dispute mediation, economic compensation, and forced stability maintenance to guide the direction of disputes.

In addition, some studies have focused on the impact of different types of collective labor disputes on the governance methods of local governments. CAI He (2010) noticed the transformation of the interests and demands of migrant workers, arguing that labor disputes are shifting from the "baseline type" to the "growth type". The former is protected by law and has clear standards, and can be resolved through arbitration and litigation. The latter lacks formal legal protection and clear standards, and can only be resolved through collective consultation. Chen Feng and Tang Mengxiao (2013) summarized three types of labor disputes that emerged in different periods: "moral and economic type" disputes triggered by the reform of state-owned enterprises, "rights type" disputes aimed at obtaining labor legal protection, and "interest type" disputes for the purpose of salary increase and improvement of working conditions. The governance methods of local governments are respectively temporary pacification and dispersion, resolution through legal procedures (including labor arbitration and litigation), and temporary mediation and collective consultation (Chen & Tang, 2013). These studies basically discuss the governance of labor disputes within the framework of the "rights-interest" dichotomy. Recent studies have found that compared with disputes related to social insurance, local governments are more likely to strongly intervene in labor disputes related to collective compensation (Yang & Chen, 2020). This shows that even though they are all "rights-based" collective disputes, the handling strategies of local governments also vary greatly.

2.2 Regional Factors in Labor Dispute Governance

China has a vast territory, and there are significant differences in people's conditions among various regions. The levels of economic development vary, and industrial development models also have their own characteristics. An increasing number of studies on labor politics in China show that the models for handling labor disputes and labor governance vary from place to place, but rather exhibit regional characteristics and differences.

Firstly, existing research mainly examines the current situation of labor issues and labor governance from the perspective of industrialization development models in different regions. Fei Xiaotong (2021) once summarized the industrialization models of multiple regions across the country, such as the "Southern Jiangsu Model" with township enterprises as the main body, the "Wenzhou Model" characterized by individual and private economies, and the "Pearl River Model" that develops "three comes and one compensation" enterprises relying on geographical advantages. He also elaborated in detail on issues such as the history of industrialization development and the composition of labor and capital in different regions. Subsequent studies on township enterprises have also shown that the labor employment relationship in the southern Jiangsu region is embedded within the acquaintance relationship and village society, and is not a simple and pure market-oriented labor-capital relationship (Zhou Feizhou, 2013; Qu Jingdong, 2024). In terms of regional comparison of labor conditions, the survey shows that the Yangtze River Delta region outperforms the Pearl River Delta region in multiple labor rights protection indicators. Researchers believe that this is closely related to the higher proportion of local workers in the Yangtze River Delta, and the management of local enterprises (township enterprises) is more humanized (Liang Bo et al., 2008; Liu Linping, Yong Xin et al., 2011; Wei Wanqing and Xie Shun, 2013. Some studies suggest that the basic model for enterprises in the Pearl River Delta region to handle labor relations is "market-oriented", while those in the Yangtze River Delta region are "relationship-oriented" and "law-based" (Wan Xiangdong et al., 2006; Liu Linping, Zheng Guanghuai et al., 2011).

Secondly, in addition to the differences in labor-capital composition and industrial models, relevant research also examines the regional characteristics of labor governance from the aspects of government-business relations and government-enterprise relations, reflecting from the side the key role that local governments play in economic development and labor disputes. Local governments promote local economic development and have a mutually beneficial and interdependent relationship with enterprises. The combination of "officialdom + market" has become the main driving force of the regional growth alliance (Zhou Li 'an, 2021). Compared with the eastern coastal areas, local governments in inland regions offer more policy preferences to enterprises while also making concessions in the handling of labor rights and labor disputes (Geng Shu, Chen Wei, 2015). For instance, Wang Jianhua (2017) found that the governments in inland regions place more emphasis on the entry of foreign capital. The "all-inclusive government-business relationship" would enable the government to proactively assist enterprises in resolving labor disputes. Relevant labor studies have found that local governments in the Pearl River Delta region (or with the help of trade unions) often intervene and coordinate labor disputes, resolve collective disputes, and show a tendency towards the development of local enterprises (Zhang Yonghong, 2009; Elfstrom, 2019); In the early stage, the enterprises that developed in the Yangtze River Delta region were mainly endogenous township enterprises (Wei Wanqing and Xie Shun, 2013). Later, the capital introduced to industrial parks was mostly high-quality capital. The combination of "strong government and strong capital, local capital and local workers" made the labor system created by the industrial model in the Yangtze River Delta significantly better than that in the Pearl River Delta (Wang Jianhua et al., 2018:109). In addition, the early industrialization model in the Yangtze River Delta also had institutional continuity, laying an important foundation for establishing a positive treatment system model for local migrant workers (Liang Bo et al., 2008).

Finally, some literature from the field of labor law research indicates that judicial decisions on labor disputes contain distinct regional characteristics. Local governments often formulate local protectionist labor policies based on their own interests (Zhang Yonghong, 2009), which has led to differences in labor policies among regions, especially at the provincial level (Zang Leizhen et al., 2020). Against this backdrop, judgments on similar labor dispute cases vary significantly across different regions (Cheng Jinhua, Ke Zhenxing, 2018; Ma Ling, 2021). For instance, research indicates that legal rules and judicial practices in different regions offer differentiated protection to workers or enterprises. Compared with Beijing and Guangzhou, Shanghai, a core city in the Yangtze River Delta region, is more inclined to protect local enterprises in disputes over the termination of labor contracts due to violations of enterprise discipline (Cheng Jinhua, Ke Zhenxing, 2018).

2.3 Literature Review and Research Approaches

The above-mentioned research provides an enlightening academic perspective, but there is still considerable room for study in the labor politics dimension of labor dispute governance. Firstly, in terms of the types of labor disputes and the role of local governments, existing research has focused on workers' collective resistance and mass incidents, relatively neglecting the vast number of daily labor disputes and their resolution methods, and has insufficient examination of specific types of disputes. Some studies show that local governments adopt differentiated governance measures for different types of labor disputes (CAI He, 2010; Chen & Tang, 2013; Chen, 2016. Recent studies have shown that even local governments in the same region present differentiated governance styles for different types of collective labor disputes (Yang & Chen, 2020). These findings suggest that there may be a more complex connection between the types of labor disputes and local government governance.

Secondly, at the regional governance level, the academic community has paid far more attention to the Pearl River Delta than to other regions, and research on the relationship between the labor system and labor governance in other regions needs to be strengthened. Although some studies have begun to explore labor politics in the Chinese mainland and the Yangtze River Delta region in recent years (Wang Jianhua, 2017; Wang Jianhua et al., 2018), relevant discussions are still insufficient. The labor governance models of the Yangtze River Delta and the vast central and western regions as well as their specific districts and counties are worthy of further exploration. It is worth noting that the labor governance styles of local governments in specific regions often show significant differences in different historical periods (Zhang Yonghong, 2009; Wang Jianhua, 2018). Through long-term regional investigations, more abundant labor political information of specific local societies can be obtained.

Finally, at the level of governance strategies (especially the concept of emotion and law) and the foundation of industrial society, existing research mainly focuses on various strategies used by local governments to resolve labor disputes, such as forced stability maintenance, legal deterrence, and emotional comfort, reflecting the strategic logic of resolving incidents. However, insufficient examination is conducted on the strategies themselves (such as emotion and law). Empirical research shows that it is precisely the differentiated understanding of labor law in different regions that has led to the differentiated protection of workers or enterprises in local judicial interpretations and judicial practices (Cheng Jinhua, Ke Zhenxing, 2018). A large number of studies in legal sociology have pointed out that social sentiment has a regulatory effect on law and hold that the operation of law cannot do without the support of the social foundation. Therefore, how to understand the "law" in a specific local society, especially the rational concepts and industrial social foundation behind the operation of the law, might be the core of understanding the governance of labor disputes in a particular region.

In view of this, this article focuses on a county-level society in the Yangtze River Delta region, taking the county-level labor departments (labor arbitration institutes and labor security supervision teams) as the research entry point, and comprehensively examines various types of labor dispute cases handled by the two departments. At the micro level, this study focuses on analyzing the governance methods and orientations of local governments towards different types of labor dispute cases, and explores the understanding and sources of emotion and law by local governments and their staff. On a macro level, this study continues the research tradition of labor politics, placing the practice of dispute mediation in specific and long-term local social contexts for examination. It particularly focuses on the connection between local industrial models and their historical changes and labor disputes, while also taking into account the institutional design and mediation practices of labor rights by both the central and local governments.

The field materials for this article were mainly obtained through in-depth interviews, participatory observations and archival organization. The author conducted field research at the Labor Security Supervision Team and the Labor and Personnel Dispute Arbitration Committee/Labor and Personnel Dispute Arbitration Institute of Lixian County (hereinafter referred to as the Labor Supervision Team and the Labor Arbitration Institute) from 2019 to 2024 (specifically from July to August 2019, December to January 2021, August 2023, and August 2024). We conducted multiple in-depth interviews with over 30 staff members from the labor department of the Human Resources and Social Security Bureau and other departments, the Housing and Urban-Rural Development Bureau, the Economic Development Zone, H Township, and W Township. In addition, the author has observed various types of labor disputes, attended multiple court hearings and internal meetings of government-mediated disputes (including collective disputes), and recorded the interaction process among the government, employers, and workers. In addition, the author also consulted the county Chronicles as well as a large number of archival materials and historical documents concerning the development of township enterprises, industrial transformation, and the handling of labor disputes in Lixian County.

3. Localized Industrial Traditions and Baseline Labor Disputes

Lixian County is located in Province S, in the plain area of the Yangtze River Delta. It has a large number of textile enterprises, a developed private economy, and a relatively high proportion of family industries (family small workshops). Thanks to its superior geographical location, solid foundation for mulberry cultivation and mature textile technology, textile enterprises have been an important economic pillar of Lixian County since modern times. Some of the towns under its jurisdiction have historically achieved development and prosperity by relying on the rise of family textile enterprises. During the period of collectivization, the government strictly implemented the policy of "taking grain as the key", promoted the single agricultural economic model, and the production and circulation of private commodities were completely abolished. Individual businesses and market trade were also banned as the "tail of capitalism". As a result, family workshops and private enterprises in Lixian County once withdrew from the historical stage.

It was not until the mid-1970s that the local commune industry and family handicrafts in Lixian County regained their vitality. After the reform and opening up, the family silk weaving industry centered in W Town in the northern part of the county and the sweater knitting industry centered in H Town in the southern part gradually emerged. In the 1980s, the industrial development of Lixian County presented dual characteristics: On the one hand, under the influence of the model of southern Jiangsu, the government-led township industry emerged as a powerful force, driving the rapid rise of the county's industrial economy; On the other hand, influenced by the Wenzhou model, family industries (a large number of family workshops) have been widely revived at both the town and village levels. In 1985, the industrial output value of Lixian County had exceeded that of its agriculture. During this period, township enterprises and family industries developed rapidly, attracting a large number of local laborers and forming a unique phenomenon of "leaving the land but not the hometown, entering the factory but not the city" (Fei Xiaotong, 2021). In 1995, there were a total of 25,368 individual and private enterprises in the county, with 66,087 employees. Although the average number of employees in each family workshop is less than three, the total regional output value it creates reaches 4.35 billion yuan, accounting for 50% of the county's total industrial output value. In the field of labor relations, the composition of labor and capital during this period was mainly "local capital and local workers", with local governments playing a leading role in the operation of township enterprises and economic development.

By the mid-to-late 1990s, while individual and private industries (family industries) were flourishing, industrial collective enterprises and township enterprises entered the track of reform. At the beginning of the 2000s, the reform of township enterprises in the entire county was basically completed, and private enterprises have since replaced township enterprises on the historical stage. In addition, Lixian County has intensified its efforts to attract investment and has built multiple industrial parks at both the county and town levels. Since 2000, foreign-funded enterprises and local private enterprises have become the main body of Lixian's economy. In short, in the 1980s and 1990s, the core forces driving the economic development of Lixian County were township enterprises and family industries. Since 2000, foreign-funded industries and local private enterprises (mostly small and micro enterprises) have formed the main force driving the economic development of Lixian County.

Looking back at the late 1980s and the entire 1990s, the number of labor disputes in Lixian County was relatively small. For instance, in 1991, the Lixian County Labor Arbitration Committee only handled two labor disputes throughout the year. Furthermore, most labor disputes can be resolved within enterprises or communities and rarely escalate to the point where the county-level labor department gets involved. As local endogenous enterprises, township enterprises and family workshops have their labor-capital relations deeply embedded in the community interpersonal relationship network (Wan Xiangdong et al., 2006; Liang Bo et al., 2008). Since the labor force mainly comes from the village itself and many are even family relatives, the interaction between employers and employees is often tinged with warmth. In this special context of community communities and family businesses, labor disputes are mostly resolved through internal mediation and rarely resort to legal channels.

In addition to the relatively low frequency of disputes, the causes of labor disputes are also very concentrated, basically falling into two major types: wage arrears and work-related injuries. ZKY, the director of the Lixian County Labor Arbitration Institute, said:

Throughout the entire 1990s, including before 2008, the number of arbitration cases was very small, with only a few or a dozen cases each year, and the highest number in a year was just over twenty. Historical records show that from 1991 to 2000, the labor arbitration Institute of Lixian County handled no more than 30 labor dispute cases each year. The year with the highest number of cases handled was 1999. A total of 26 cases were handled that year. They are all relatively easy to mediate. These cases are either about wage arrears or work-related injuries. Cases like the current ones such as economic compensation, failure to sign labor contracts, and payment of social security are basically non-existent. Although there were fewer cases at that time, the types of cases were all directly related to the survival and basic living of workers, so they were more urgent. We will do our best to solve them. (Interview materials ZKY, 20230810)

From the perspective of the staff, labor disputes such as wage arrears and work-related injuries directly concern the survival rights of workers and are the most fundamental and personal bottom-line guarantee issues, with distinct moral attributes. This article refers to such cases as "baseline labor disputes".

The industrial tradition of "local capital and local workers" has shaped a specific perception among labor department staff that the labor-capital relationship in township enterprises (especially family workshops) is significantly different from the market-oriented labor-capital relationship - there exists a social relationship between the boss and the workers that precedes the labor-capital relationship, and their interaction is both emotionally colored and full of human relations, and industrial production is highly integrated with rural life. This is similar to the research findings of Zhou Feizhou (2013) and Qu Jingdong (2024) on the labor relations in township enterprises in southern Jiangsu. That is, the operation and management of township enterprises are embedded in the social relations of villages, and many village cadres are also the operators of enterprises. Under such circumstances, the management of workers by enterprises needs to be carried out based on the relationships of acquaintances and the folk customs and conventions of the village community. Therefore, the management of labor relations in enterprises is restricted by the existing social relations among farmers.

Not only that, the scale structure of local enterprises and the ratio of labor-capital forces in Lixian County have also influenced the cognitive logic of the local government. During this period, the industries that emerged in Lixian County were mainly family businesses and small and micro enterprises in towns and townships. Therefore, the local government believed that the labor relations in the area were not absolutely "strong capital and weak labor", but rather "relatively weak capital and absolutely weak labor". This judgment echoes the research conclusion of Yao Xianguo (2005) on private enterprises in Zhejiang Province. This specific industrial social foundation not only profoundly shapes the cognitive framework of local governments regarding labor relations, but also has a continuous impact on their subsequent strategies for resolving labor disputes.

4. Local Industrial Development Changes and Diversification of Labor Dispute Types

With the advancement of industrial transformation and upgrading, coupled with multiple factors such as changes in domestic and international market environments, evolution of social situations, and adjustments in legal systems, the development of local enterprises and labor relations in Lixian County have undergone structural changes. The field of labor disputes presents the following two characteristics: First, the number of cases has been increasing year by year; second, the types of cases have become increasingly diverse, with an increasing number of "compensatory labor disputes" emerging. Unlike previous cases of wage arrears and work-related injuries, these cases are often regarded by labor department staff as compensatory labor disputes. Therefore, this article classifies them as "compensatory labor disputes". In response to this, local governments have adopted differentiated governance strategies accordingly.

4.1 Changes in internal and external environments and the emergence of compensatory labor disputes

Since the 21st century, the industrial development of Lixian County has faced transformation and change, and labor relations and labor disputes have also evolved accordingly. The result of the interplay of internal and external environments is the emergence of a large number of compensatory labor disputes, among which there are no shortage of collective labor disputes.

First of all, significant changes have occurred in the composition of labor and capital. Firstly, in terms of capital composition, the industrial entities in Lixian County have changed from "township enterprises + family industries" to "foreign-funded enterprises + local private enterprises (family industries account for an important part)". During this process, with a large amount of foreign capital entering the industrial park, local township enterprises gradually moved to the industrial park or economic development zone through restructuring, thus breaking away from their original village and community regional attributes. Secondly, in terms of the composition of the labor force, as an important textile base in the Yangtze River Delta region, Lixian County has attracted a large number of cross-provincial migrant workers, resulting in a continuous decline in the proportion of local workers. The overall regional pattern of "local capital and local workers" has undergone a fundamental transformation. This change in the labor-capital structure directly triggered a transformation in the labor relationship model, which in turn led to a significant increase in the number of labor dispute cases. As the employment model based on community acquaintance relationships has gradually evolved into a purely market-oriented labor relationship, the moral reputation of village communities has increasingly lost its binding force, and it has become a common way for workers to resort to the labor department to protect their rights.

Secondly, the legal awareness and labor rights protection concepts of the working group are increasingly strengthened, and the number and types of labor disputes (including collective disputes) are also increasing day by day. During this process, the "Labor Contract Law" implemented in 2008 had the greatest impact on the local society and labor relations of Lixian County. Since the implementation of the Labor Contract Law, on the one hand, the number of cases accepted by the labor arbitration institute has risen sharply, from 121 in 2007 to 910 in 2023, with the total number of cases increasing by more than six times. Table 1 shows the basic overview of labor dispute cases from 2014 to 2023. Although the "adjustment and withdrawal rate" has not changed much, only declining from 2020 to 2022, the "mediation rate" has shown a year-on-year downward trend. This means that an increasing number of cases need to go through court trials and multiple rounds of mediation before both employers and employees can be persuaded to withdraw their lawsuits.

Table 1: The situation of labor dispute cases accepted by Lixian County Labor Arbitration Institute from 2014 to 2023

 

On the other hand, due to the popularization of labor laws and the improvement of workers' awareness of safeguarding their rights, more and more types of disputes have emerged, such as cases involving economic compensation, substitute notice money, non-compete restrictions, and double wages. Local governments are more inclined to protect local enterprises in the mediation of these cases, demonstrating the adaptive role of reason and reason in labor law. The following is an illustration of this with a typical case of a dispute over double wages. In recent years, the labor arbitration institute has accepted more than 80 cases related to double wages. Since 2021, cases involving double wages have become the second largest type of case accepted.

Employee A joined the company in 2016. More than two years later, his contract expired. Due to management negligence, the company forgot to renew the contract with him. There are more than ten similar employees, but they still continue to work as stipulated in the previous contract. Worker A had continued to work for another 11 months after the expiration of his contract and before applying for arbitration. Worker B was in a similar situation. The arbitrator conducted several rounds of mediation, but all ended in failure. The company cooperated with the mediation, but the two workers refused because the mediation plan was far from their psychological expectations. The arbitrator then lowered his expectations of the claim through the trial procedure. During the court hearing, the two workers were resolute in their stance and submitted evidence such as expired labor contracts, salary sheets, attendance records and bank statements. However, the arbitrator strictly questioned their claims. Although the workers were well-prepared, they were not familiar with the specific judicial interpretations and local practices. The arbitrators repeatedly asked them to explain the legal basis for double pay and repeatedly reminded them of the risks of losing the lawsuit and the possible adverse consequences they might face. Ultimately, in the solemn atmosphere of the court hearing, the laborer chose to accept mediation.

Although the obstruction of the demands of the two workers is related to the specific disputed behavior between the employer and the employee, the fundamental reason lies in the staff's different understanding of the industrial structure characteristics of Lixian County and the legal nature of double wages.

Double pay is different from labor remuneration. It is a compensatory form of remuneration. Moreover, cases often occur in small and micro enterprises and workshops with poor management, which can easily create a demonstration effect and lead to multiple arbitrations of the same enterprise. Lixian County has a well-developed private economy and a large number of small and micro enterprises. The case of double wages has had a significant impact on local small enterprises and workshops. Therefore, in the absence of any subjective malice from the enterprises, preferential protection should be provided and the workers should be persuaded to make concessions and reach settlements. (Interview material JYX, July 19, 2019)

Secondly, under the guidance of the provincial and municipal industrial policies, Lixian County initiated the work of industrial adjustment and industrial transformation and upgrading around 2012, clearly stating that during the "12th Five-Year Plan" period, it would focus on cultivating the new energy industry and simultaneously promote the transformation and upgrading of traditional industries. Among them, the knitting and dyeing industry, which is a key adjustment target, has achieved optimization and improvement through measures such as eliminating backward production capacity and promoting enterprise mergers and reorganizations. In 2018, Lixian County comprehensively advanced the transformation and upgrading of its industrial economy and the adjustment of industrial policies for "replacing old industries with new ones". It formulated A specific differentiated resource supply and allocation mechanism: all enterprises were classified into four categories, namely A, B, C and D. It clearly supported and prioritized the development of enterprises in categories A and B, helped enterprises in category C to transform, and forced enterprises in category D to rectify. In 2021, the industrial policy adjustment of "replacing old industries with new ones" entered a critical period. The Lixian County Government launched the rectification of industrial enterprises with "two highs and one low" in traditional industries, and advanced the county-wide work of removing and rectifying high-consumption and low-efficiency industrial clusters, with a focus on the textile printing and dyeing industry. That year, over 400 "low, scattered, disorderly and polluting" enterprises (workshops) were rectified, and more than 40 high energy-consuming and high-emission enterprises were shut down or relocated.

Against the backdrop of this phoenix-like industrial transformation, many textile printing and dyeing enterprises in Lixian County are facing the relocation of industrial parks and the "closure, merger or transformation", which has triggered several collective disputes involving economic compensation. Most of these cases are resolved at the township level, and there are very few labor dispute cases that actually reach the county level. There are two key reasons for this. First, the higher-level government has strict assessment of collective labor disputes (for instance, collective disputes that trigger mass incidents will result in a one-vote veto in the assessment). The subject responsible for resolving collective labor disputes is the local government, that is, the township-level government. Secondly, the local government of Lixian County has strong financial strength and has allocated relatively sufficient special funds to handle matters such as the relocation of enterprises.

Collective economic compensation cases have occurred since 2012, but it was not until around 2017 to 2021 that they were truly concentrated and frequent. The few collective dispute cases that are brought to the county labor arbitration institute are usually those where both parties have significant disputes, such as difficulties in defining labor relations and insufficient payment capacity of enterprises. The demands of workers are generally economic compensation. Some cases also involve wage arrears, overtime pay and back payment of social security. (Interview Materials CJ, 20240823)

Finally, changes in the external market environment and social environment have led to collective economic compensation and collective wage arrears cases. Since 2018, local enterprises in Lixian County, especially export-oriented ones (mostly textile enterprises), have been deeply affected by the tense trade situation between China and the United States. The number of orders has sharply declined, and the profits of enterprises have dropped significantly. This international backdrop, coupled with the decline in the economic benefits of traditional enterprises and the rise of emerging industries, has further strengthened the local government's determination to vigorously promote the transformation and upgrading of industries. In addition, the outbreak of the COVID-19 pandemic in 2020 once again dealt a heavy blow to the production and operation of local enterprises. This was an even greater blow to the traditional textile industry and small and micro enterprises, which were already experiencing a decline in profits, directly leading to an increase in collective labor disputes. Archival data shows that the number of collective labor disputes accepted by the Lixian County Labor Arbitration Institute rose from 9 in 2018 to 13 in 2019, 18 in 2020 and 18 in 2021. The main causes of the cases were enterprise bankruptcies due to the deterioration of the market environment. Among them, the economic compensation case of Hongji Textile Factory is a typical example.

At the beginning of 2023, due to the continuous impact of the COVID-19 pandemic, Hong Ji Textile Factory announced its suspension of operations. However, the owner of the cotton mill did not directly dismiss the workers. Instead, he maintained the labor relations with the 28 workers by paying the minimum wage standard. His intention was to force the workers to leave voluntarily, thereby evading the obligation to pay economic compensation. In order to claim economic compensation, the workers chose to take part-time jobs in other enterprises while receiving the minimum wage. After finding that no one had resigned voluntarily, the boss further increased the number of daily attendance clock-in times from two to four. This strict attendance system seriously disrupted the normal life and part-time jobs of the workers, eventually leading to a collective petition by the workers to the city. The case was subsequently officially transferred to the labor supervision department of Lixian County and the W Township Government for handling.

The local government found that there were three complexities in this case. First, the actions of the enterprise are not truly illegal. Neither the minimum wage standard nor the high-frequency attendance measures have exceeded the scope permitted by law. Secondly, although the workers generally have a long length of service (only four have less than five years of service), since the initial labor relationship was established through oral agreements and the paper contract was only officially signed after several years of work, labor arbitration is bound to be disadvantageous to the workers. Thirdly, there is internal division among workers. Three workers who are close to retirement (with only a few months left) have the strongest willingness to protect their rights. Once they reach the legal retirement age, the enterprise does not need to pay economic compensation.

After analyzing the situations of both employers and employees, the government believes that the dispute should be resolved before the arbitration stage. In the specific implementation, a differentiated handling strategy should be adopted, with the three people approaching retirement being dealt with separately from the remaining 25 people, and the focus should be on conducting negotiations and consultations with the core group with longer working years. The staff members of the labor supervision department of Lixian County believe that:

Although the boss's approach was rather excessive, it was still necessary to sit down and negotiate. For one thing, the boss did not default on wages; the two sides merely had a disagreement over the payment of economic compensation. Secondly, it is not realistic to receive full compensation when the enterprise is in such a difficult situation. Both sides should understand each other and take a compromise point, offering a discount of about 60% to 70%. After all, they are all veterans who have been working for over ten years. This foundation of trust and human kindness should still be there. (Field Notes, 20230811

After multiple rounds of mediation by the local government, both parties finally completed the compensation at 60% of the standard amount of economic compensation in October 2023. This result indicates that the workers of Hongji Textile Factory were forced to make significant compromises in their rights during the process of safeguarding their rights.

4.2 Strengthening of Labor security laws and Governance of baseline labor disputes
Since 2008, the Labor Contract Law and related labor systems have made important provisions in safeguarding the basic rights and interests of workers such as wage arrears and work-related injury compensation. For instance, both the central and local governments have strongly promoted the signing of written labor contracts to ensure the subsequent protection of workers' rights and interests.

Cases related to labor remuneration (mainly referring to wage arrears) are the most frequently handled by the labor department. Compared with individual wage arrears, collective wage arrears in the construction sector are more difficult to handle. Due to the production characteristics of the construction industry and the labor system of multiple layers of subcontracting, collective wage arrears incidents occur frequently. Since 2003, the state has issued multiple measures in an attempt to regulate the development of the construction industry through institutional means. At the local level, Lixian County focused on building a "no wage arrears brand" in 2013, ensuring wage payment through systems such as phased acceptance, special accounts for workers, and real-time supervision of projects. Since 2017, the provincial government has been vigorously rectifying the issue of wage arrears in the construction sector, and has been supervising the labor supervision departments of all districts and counties to carry out wage arrears governance activities through strict assessment methods. The "Regulations on the Payment of Migrant Workers' Wages" promulgated and implemented in 2019 further strengthened the legal responsibilities of labor supervision departments in the governance of wage arrears.

However, compared with standardized enterprise employment management, the governance of wage arrears in the construction sector faces a more complex situation. For this reason, the Labor Supervision Team of Lixian County broke through the constraints of traditional procedures and instead adopted practical and flexible dispute resolution strategies. For instance, in case 210122, over ten workers followed their fellow townsman, the contractor Lao Li, to work in Lixian County. However, Lao Li fled with the money due to project losses, and the workers had no choice but to demand their wages from the general contractor. However, the general contractor had no idea about the existence of Lao Li and these workers at all, let alone the exact number of them or their working hours. As a result, they refused to pay their wages. The only things that workers can use to prove their working conditions are the chat records with the contractors and the attendance records of the team leaders. The labor department, through investigations into subcontracting companies and labor service companies, confirmed that the contractor, Lao Li, did indeed undertake a small number of projects privately. The supervisory team urged the general contractor to advance the wages that were in arrears through administrative interviews and other means, and at the same time guided the subcontracting disputes to be resolved through judicial channels. In case 210125, the general contractor and the subcontractor had a dispute over the quantity of work. The boss of the subcontractor (who was actually the foreman) embezzled the project funds in advance under the guise of workers' wages. After realizing the actions of the subcontractor, the general contracting company suspended the payment of wages, which then triggered a collective wage claim by the workers. The solution adopted by local governments is also to strengthen the main responsibility of general contracting units for wage payment through administrative supervision measures. The labor department mostly takes similar measures in dealing with cases of unpaid wages in the construction industry, that is, it strengthens the responsibility of the general contractor through administrative power and legal weapons, while guiding the parties involved to resolve disputes through judicial channels.

In the governance of bottom-line disputes, the staff are well aware that construction workers are at the bottom of the subcontracting system, with low educational levels and weak awareness of rights protection. It is almost unrealistic to require workers to provide written evidence strictly in accordance with legal thinking. As the captain of the Labor Supervision team said:

On the construction site, all the agreements were made verbally. The workers were all led by subcontractors from the same hometown or those with relatives to work outside. Very few signed contracts. Signing labor contracts was considered very good. If they still insist on "he who asserts must prove", then they won't be able to get their money back. (Interview materials DG, 20210128)

In the practice of mediation, local governments pay more attention to "de facto labor relations", and substantially apply and enforce the law. The core is to determine the true affiliation between workers and projects and clarify the hierarchical subcontracting relationship. As for "the evidence provided by workers can all be relaxed in standards" (Interview Material WX, 20210128).

5. Emotional and Legal Cognition and Practical Logic of Local Government Labor Dispute Governance

The historical evolution of the industrial foundation in Lixian County has profoundly shaped the local government's understanding of the law and sentiment, prompting it to form differentiated governance logic in bottom-line disputes and compensatory disputes. The governance of bottom-line disputes tends to strictly enforce labor laws, strengthen the protection of workers' rights and interests, reflect the moral protection of "human nature" and the pragmatism orientation of the law, and follow morality and hierarchical logic. The governance of compensatory disputes tends to balance the interests of labor and capital, focuses on maintaining the operation and development of small and micro enterprises, reflects the adaptive role of local industrial traditions on labor laws, and follows the local logic centered on local historical traditions and development changes.

5.1 Emotional and Legal Cognition and Governance Logic of bottom-line disputes

From a historical perspective, bottom-line disputes have always been the core governance scope of the labor department in Lixian County. Staff members generally believe that such cases concern the survival rights of workers and should be given the maximum legal protection. Among them, the "emotional understanding" and "moral perception" of the labor department have played a key role in protecting workers' rights and interests. When faced with injured workers and those who came to claim their wages, the staff's "human nature" of concern spontaneously arose, making them naturally tend to adopt a more protective discretionary stance towards workers during law enforcement. Arbitrator XC said:

Whether it's supervision or arbitration, we are the labor bureau, and it's the same for the workers. In essence, the labor bureau is there to protect disadvantaged workers. (Interview Materials XC, 20230808)

When bottom-line cases cross the moral bottom line of arbitrators, they often choose to refuse mediation and initiate rigid enforcement procedures. On August 18, 2023, arbitrator SY presided over the mediation of a work-related injury case. The worker's claim was 200,000 yuan, but the boss was aggressive and pushed the price down to 140,000 yuan. When the negotiations between the two sides reached a deadlock, the enterprise proposed that SY act as a mediator to come up with a compromise solution, attempting to persuade the workers to accept the compensation amount through a third party. SY immediately rejected it and clearly emphasized that the compensation standard must be determined independently by the workers. Seeing that the workers were hesitant, SY did not attempt mediation or persuasion but immediately initiated a formal arbitration procedure. After the trial, the arbitration tribunal ultimately ruled that the enterprise should pay the workers a total of over 190,000 yuan in compensation. Afterwards, the arbitrator SY explained:

This boss is so unscrupulous. The price is too low. Judging from his tone, it's impossible to get him to pay more. Moreover, if they were laid off, it would be around 200,000. If the workers were to accept 140,000, it would be extremely unfair to them. (Field Notes, 20230818

ZKY, the director of the labor arbitration institute, introduced a similar work-related injury case. At that time, the employer and the employee reached a private settlement. When they wanted the arbitration institute to issue a mediation statement, it was refused. ZKY said

It might be that the boss deceived the workers, or perhaps the workers wanted to get the money as soon as possible. Both sides reached an agreement at a very low price and planned to withdraw the lawsuit, but I don't agree. I must go through the ruling. Because the price is too low, it is unfair to the workers and immoral. (Interview materials ZKY, 20230810)

When dealing with bottom-line labor disputes, the labor department shows a "paternalistic" tendency. This mediation model reflects a profound moral color - preventing disadvantaged workers from being forced to make excessive compromises on their rights and interests.

When dealing with bottom-line disputes, the staff of the labor department tend to strictly enforce labor security laws. Ultimately, this is because it is the income that workers deserve for their hard work and is their most fundamental labor right. The practical problem lies in the fact that the labor side's ability to provide evidence is very weak. Going through arbitration and litigation channels is actually disadvantageous to them. Moreover, subsequent arbitration or litigation requires certain costs. The labor department recognizes limited rights compromise to facilitate settlement. This strategic compromise shows significant differences between bottom-line disputes and compensatory disputes. The professional knowledge that arbitrators possess enables them to predict the approximate outcome of the award and the amount of compensation during mediation. When the mediation amount of both parties is lower than the expected bottom line, they will be opposed by the arbitrator. Regarding the "expected bottom line", ZKY introduced:

The minimum amount of mediation cannot be less than 70% of the ruling, and this has become a common practice in mediation. However, for compensatory disputes such as double wages, economic compensation, and advance notice pay, there are no strict boundaries. Sometimes, the amount may be lower than 60% or 50% of the expected ruling amount. (Interview materials ZKY, 20230810.

The reason for this difference is that local governments and their staff follow moral and hierarchical logic in the mediation of bottom-line disputes. On the one hand, the staff strictly enforce the law to protect the basic rights and interests of workers. Even if they have to make compromises, there is a relatively certain bottom-line expected price (that is, the mediation amount cannot be less than 70% of the ruling), in which the "morality" in the hearts of the staff plays a significant role. On the other hand, the state and higher-level governments have strengthened the protection of basic labor rights such as wage arrears, and the indicator assessment has further strengthened the governance logic of local governments. This governance logic also reflects the strong practical considerations of local governments. As bottom-line disputes involve basic survival rights, workers have a stronger belief in defending their rights for salaries and work injury compensation, which can easily trigger mass or extreme incidents. Therefore, local governments need to keep the mediation price of bottom-line disputes within a relatively high range.

5.2 Emotional and Legal Cognition and Governance Logic of Compensatory Disputes

Unlike bottom-line disputes, local governments believe that workers can make greater compromises in compensatory disputes. This is based on an understanding of "reason and sentiment" (especially regional public sentiment), which specifically refers to the following three dimensions.

The first is the "sentiment and righteousness" of reason and emotion, referring to the actions and consequences of both employers and employees in specific cases. For instance, in the aforementioned case of double wages, the arbitrator held that although the company failed to renew the contract in a timely manner after its expiration (which was against the law), it had not committed any other illegal acts and continued to pay the wages as usual, showing respect and loyalty to the employees (which was reasonable). Instead, it was the two workers who brought the company to the arbitration tribunal for their personal interests (which was unreasonable). The arbitrator also held that the practice of the two complainants in seeking their personal rights through legal means might have an impact on the harmonious operation of the labor relationship and was highly likely to produce a "negative" demonstration effect (Field Notes, 20190719).The second is the "contextuality" of reason and emotion. The term "emotion and reason" commonly used in Chinese society not only refers to "emotion", but also implies "situation" (Li Zehou, 2005:82). "Context" refers to the "situation" of the region where the disputed case is located, that is, the rationality bestowed upon the enterprise by the local business form and actual operating conditions of Lixian County. Lixian County is home to a large number of small and micro enterprises and family-run workshops. These enterprises lack standardized management and often fail to sign or omit labor contracts. Coupled with the industry's conventions and seasonal characteristics, employers and employees often negotiate work content through oral agreements, resulting in strong job mobility. Therefore, compared with large-scale enterprises in industrial parks, Small and micro enterprises at the township level have become the type of enterprises that frequently suffer from cases of double wages. Local governments, however, hold a sympathetic attitude towards small and micro enterprises and family workshops in towns and townships, believing that their unregulated management is due to historical traditions and local customs. Arbitrator JYX said:

It is indeed wrong for the company not to sign a contract, but the actual situation of the company should also be taken into account. There are so many private enterprises in Lixian County, many of which are small township enterprises and family workshops with unregulated management. However, they did not maliciously default on wages. Just like today's case (double pay), the company still pays the salary as agreed. In such cases, the relationship between the two sides needs to be reconsidered and adjusted. One party cannot use the tool of "law" to "bully" the other. (Interview material JYX, July 19, 2019)

The third is the "situational nature" of reason and emotion. "Reason and emotion" are not fixed and unchanging; rather, they change and take shape in accordance with the "trend" (Wang Hansheng and Wang Di, 2012). The emergence of labor disputes may not be the fault of any one party, but rather a chain reaction triggered by changes in the external social and economic environment, such as local industrial structure adjustment, changes in domestic and international market demands, and the impact of major social events, etc. At the beginning of 2022, due to the impact of the COVID-19 pandemic, Xinyuan Textile Factory suffered a severe loss of technical personnel and faced operational difficulties. The company was unable to afford the original factory building and planned to move to one 7 kilometers away from the original factory. It had informed the workers of the plan in advance and promised that the welfare benefits would remain unchanged after the relocation. However, there were still 32 people claiming economic compensation. After the initial division and mediation, 20 people reached a settlement and withdrew their lawsuits, while the remaining 12 refused mediation. Their length of service is generally over five years. Among them, nine are local people from Lixian County, and several are even closer to the new factory. The arbitrator holds that:

It's reasonable for the company to change its location. After all, the business situation deteriorated due to the overall environment. These 12 people didn't back down at all. They are all old employees. Logically speaking, there should be some respect for them. Besides, the new location also made their commuting more convenient. (Interview Materials HX, 20230816)

From the perspective of the staff, changes in the social situation are the fundamental cause of labor disputes. Workers should take into account the impact of the economic situation and the current circumstances of the company. Under the condition of ensuring they receive their wages, they can make concessions on economic compensation.

The local government's understanding of "reason and emotion" is based on the "context" and "situation" of the local industrial tradition and its changes. The judgment of "reason and emotion" is in line with the actual interests of the local industrial structure adjustment. As the deputy director of the Human Resources and Social Security Bureau of Lixian County said:

With so many factories to be vacated this year, if the workers do not give in at all, the subsequent mediation work will be impossible to carry out. Many enterprises are facing operational difficulties and their wages are hard to guarantee. This loophole (referring to workers receiving full economic compensation in collective disputes) should be handled with caution. (Interview materials ZJC, 20230811)

In addition, local governments' understanding of labor laws, especially the relationship between labor rights and obligations, has profoundly influenced the mediation practice of compensatory disputes. From the perspective of the staff, the bottom-line disputes involve the labor remuneration and basic rights that the workers are entitled to, and should be given the greatest legal protection. Compensatory disputes involve additional remuneration. If the losses suffered by the workers are limited or not substantial, providing economic compensation to the workers can be regarded as the enterprise's obligation to assist. For instance, the arbitrator held that "the double wage law should be regarded as a penalty for enterprises rather than a reward for workers" (Interview material ZYT, 20210120). If it is set as a reward for workers, it will change the rights and obligations between employers and employees, disrupt the originally harmonious working state, and is very likely to trigger a chain reaction. For instance, the staff of the labor department in Lixian County regarded economic compensation as the company's obligation to assist. When both employers and employees were influenced by the external environment, this inherent perception was further strengthened. Deputy Director GL of the Labor Supervision Team explained:

Economic compensation is the company's obligation to assist. If the company is truly wealthy, it is not a problem for workers to receive all the compensation. It's on the verge of going bankrupt. It's unrealistic for the workers to get the full payment. Arbitration and litigation are just a waste of time, and mediation is all about making concessions on both sides. (Interview Materials GL, 20230811)

In conclusion, in compensatory disputes, local governments follow a local governance logic centered on the local industrial historical traditions and development changes, demonstrating the adaptive role of different levels of "reason and emotion" (especially local public sentiment) on labor laws. They tend to safeguard the development of local enterprises, especially the survival of small and micro enterprises. Therefore, in specific cases, they expect the labor side to make more compromises on rights and interests.

5.3 Changes in the perception of Mediation as a governance tool and by the labor side

There are practical considerations for local governments to adopt the governance approach of mediation (Zhuang & Chen, 2015), which helps to reduce collective disputes and similar controversies. Firstly, in bottom-line disputes, the disadvantaged position of workers is self-evident. If the dispute cannot be resolved through mediation, it will inevitably be very disadvantageous to the workers who enter the arbitration or litigation process. Local governments have greater discretion in the mediation process and can use various strategies to persuade and suppress the investors. Secondly, in compensatory disputes, the use of mediation makes it easier to persuade workers to compromise their rights in exchange for a settlement between both parties. It also helps to prevent similar disputes from happening again within the same enterprise. For instance, in the case of double wages mentioned above, the company had more than ten workers in similar situations. Closing the case through mediation can quell the workers' continuous complaints and reduce similar labor cases.

Among baseline and compensatory disputes, collective disputes are the most difficult to mediate and politically risky. Flexible mediation of collective disputes can help prevent the occurrence of subsequent extreme incidents. More importantly, "mediation" can effectively prevent the labor department from facing the contradictory situation of "reasoning (legal reasoning)". If collective disputes cannot be differentiated and mediated in the early stage, then the collective disputes that enter the arbitration stage will cause role conflicts in labor arbitration. For instance, in the Xinyuan Textile case, the arbitrator, based on legal and reasonable understanding, favored the company's side. As a result, 20 people were divided and mediated before the arbitration, but still 12 people chose arbitration (which was still a collective dispute). Although the arbitration court ruled in favor of the employee under the pressure of maintaining stability, the company was dissatisfied and appealed to the court. Eventually, the court rejected the arbitration result and ruled that the company was not required to pay economic compensation. At that time, the labor arbitration institute encountered the difficult problem of "reasoning for the judgment", that is, it was struggling to find the legal basis for determining the labor side's victory in order to maintain stability. If the case is settled through mediation, the arbitration court only needs to issue a mediation statement. There is no need to "reason" or present specific legal provisions in the mediation statement. It only needs to include the basic information of both the employer and the employee and the mediation amount.

In addition, it is necessary to recognize the cognitive changes of the workers' side in the current labor dispute mediation and the challenges it poses to local labor governance. Workers not only demonstrate a stronger sense of rights protection in bottom-line disputes, but also tend to insist on safeguarding their own demands in compensatory disputes, regarding double wages and economic compensation as reasonable demands, and are reluctant to compromise or make concessions to local governments and employers. As the workers' representative of Hong Ji Cotton Mill said:
Economic compensation is originally a guarantee provided by labor law for workers. Every penny we strive for is reasonable and legal. Having worked in the factory for so many years, even if we haven't achieved any merit, we must have put in a lot of hard work. The economic compensation is a reasonable form of compensation for us. (Field Notes, 20230811
Although the labor relationship between the employer and the employee has lasted for many years, when they go to court, the employee is no longer bound by the tender relationship but chooses to strive for the maximum economic compensation. In fact, since the 21st century, the composition of "local capital and local workers" in Lixian County has undergone fundamental changes. The warm interaction between labor and capital has gradually lost its former charm. The labor relations within enterprises have shown short-term and flexible characteristics. Coupled with the promotion and popularization of labor laws among the working population, While enhancing workers' awareness of rights protection, it may bring unexpected consequences to the mediation of labor disputes, and the social basis for reconciliation between employers and employees is gradually shrinking. All these have posed new challenges to the mediation of labor disputes by local governments, and the mediation costs they face are constantly rising. It can be seen that the local industrial foundation and its changes in Lixian County have shaped the emotional and legal perception of the local government and its staff. However, this perception has quietly changed among the labor side. They gradually regard applications for economic compensation and double wages as reasonable demands and insist on going through the ruling or litigation procedures, reflecting the changes in local public sentiment over The Times.
6. Conclusion and Discussion
This article takes Lixian County in the Yangtze River Delta region as an example to explore the practical process and legal implications of labor dispute governance in the context of long-term industrial development, and examines the differentiated logic of local governments in mediating labor disputes. The practice of labor dispute governance in Lixian County shows that local governments pursue a governance effect of "balancing emotions and laws" - not only strictly implementing labor laws to protect vulnerable workers in bottom-line disputes and demonstrate the emotions and morality of local governments, but also proactively adjusting labor laws to adapt to local public conditions, and building harmonious labor-capital relations in the context of an industry with a high concentration of small and micro enterprises Reasonably reduce the compensation burden on enterprises in compensatory disputes.
The "reason and emotion" recognized and presented by local governments in the governance of labor disputes not only have the meaning of the emotional dimension, that is, the emotional understanding and substantive protection of workers in bottom-line disputes, but also have an important social reality basis and economic interest balance, that is, the recognition of "situational" and "situation" in compensatory disputes. The government hopes to strike and maintain a balance between legal principles and human sentiments, as well as between enterprise development and labor protection. Rooted in the local industrial foundation and its structural changes, local governments have made expansive interpretations and applications of regional "emotion and reason", proactively adjusting the power relations and responsibility boundaries between employers and employees, and practicing their governance logic of "balancing emotion and law". However, the understanding of the concept of emotion and law by both employers and employees (especially the labor side) has undergone a distinct transformation of The Times.

From the perspective of the relationship among labor, capital and government, the role and capacity of the local government in Lixian County belong to the "strong government" type. That is, the local government not only plays a leading role in economic development (including leading the early development of township enterprises and the subsequent construction of industrial parks), but also becomes the main force in intervening and resolving labor disputes (the labor departments of districts and counties and township governments are the main forces in governance) The trade union sector is relatively absent. Lixian County has a well-developed private economy and is influenced by both the "Suzhou-Nanjing Model" and the "Wenzhou Model". That is, there are not only a large number of small and micro enterprises in towns and townships but also numerous family industries (family workshops) within its jurisdiction. The enterprises that have attracted investment and settled in are mostly large-scale enterprises. Since 2000, the local labor force has transformed from local workers to migrant workers. Therefore, the characteristics of the relationship between labor, capital and the government in Lixian County can be summarized as "strong government - relatively weak capital - absolutely weak labor". The relationship and power distribution among these three parties have the greatest impact on compensatory disputes. Cases such as double wages and economic compensation often occur in small and micro enterprises and family workshops in towns and townships that are loosely managed or have been shut down, merged or transformed. When local governments mediate, they often favor the enterprises, attributing their responsibility to local customs, industrial transformation or market environment, and advise the labor side to appropriately transfer their rights and interests. This indicates that local governments are intent on reconfiguring the rights and obligations between employers and employees. 

This article advances the existing research from the following aspects. First, existing research has relatively overlooked the differential roles of local governments in different types of labor disputes. This paper, by sorting out the long-term local history and empirical reality, finds that the actual situation of local industrial development (industrial foundation and its changes at various stages) has profoundly shaped the emotional and legal cognition of local governments and their staff. This enables it to take differentiated measures to protect workers or maintain the governance of local enterprises in the two types of disputes: bottom-line disputes and compensatory disputes. This demonstrates the multi-faceted nature of local governments in addressing various types of disputes. Secondly, most existing studies have focused on the specific strategies of local governments in resolving collective labor disputes. On this basis, this paper further traces the sources of the concepts of "law" and "emotion and reason" in governance, and holds that local governments' understanding of emotion and law has an important practical foundation. This also corroborates the results of the empirical research on labor law and supplements the regional social factors that have not been deeply involved. Thirdly, following the regional research results of labor politics, this paper deepens the study of labor governance in specific counties of the Yangtze River Delta region. The first is to present the occurrence logic and industrial historical context of baseline labor disputes and compensatory labor disputes in specific regions through a diachronic analysis framework. Second, it reveals the actual role of elements such as regional public sentiment and labor laws in the governance of labor disputes. Examining the localization practices of labor dispute governance from a regional perspective helps to gain a deeper understanding of the public sentiment and industrial social foundation behind dispute mediation, and thereby demonstrates the diversity and complexity of China's labor politics.

Regional studies on labor politics and the classification of "bottom-line - compensation" type labor disputes are helpful for understanding the labor governance system in contemporary China. On the one hand, since the reform and opening up, although the system of units has disintegrated and the state has moderately withdrawn from society, the protection policies for disadvantaged workers under the socialist state system have still persisted and have a certain historical continuity. For instance, the rights and interests of workers in bottom-line disputes have been guaranteed through bureaucracy and labor laws, highlighting the characteristics of "national fatherly love". The state provides compulsory protection for basic individual rights, such as the mandatory signing of written labor contracts and the mandatory payment of social insurance. Although construction workers cannot establish a labor relationship in the sense of labor law, they can be compensated for work-related injuries in accordance with the standards for private enterprises. The Regulations on the Payment of Wages to Migrant Workers are also aimed at supplementing the deficiencies of the Labor Contract Law in addressing wage arrears for migrant workers. These measures and the corresponding hierarchical assessment have strengthened the responsibility of local governments in resolving low-level labor disputes.
On the other hand, the legislation and law enforcement of compensatory disputes highlight the characteristics of the central-local relationship. Although labor laws safeguard the individual rights of workers, there are still limitations in local practices. Local judicial interpretations and guiding opinions have, to a certain extent, adjusted the intensity and direction of law implementation. For instance, the Department of Justice in Province S defined "double wages" as an attribute distinct from "labor remuneration", thereby reducing the compensation standard. Meanwhile, local governments at the grassroots level have further reduced the compensation standards in light of the actual conditions of small and micro enterprises and family industries within their regions.
It is necessary to be vigilant that under the dual constraints of economic growth slowdown and the iteration of industrial policies, local governments have a stronger motivation to mediate, and the "reason" interpreted by the staff may cause harm to the workers. The Yangtze River Delta region where Lixian County is located is one of the areas with relatively high economic development and social governance levels. However, even so, we can still observe that local governments have made moderate concessions to workers' rights and interests in order to facilitate labor-capital reconciliation. In addition, the labor governance methods and mediation practices obtained by taking Lixian County in the Yangtze River Delta region as an example in this paper need to be supplemented and revised by more regional studies, and the specific topics of labor dispute governance also need to be further deepened. Future research on labor governance not only needs to carry forward the tradition of labor sociology but also integrate theoretical perspectives from disciplines such as law and political science. Only in this way can it make progress in the scope of analysis and research dimensions, and thereby gain a more comprehensive understanding and interpretation of contemporary Chinese labor issues.
The original text was published in the 3rd issue of "Sociological Studies" in 2025. Thanks to the wechat official account "Sociological Studies Journal" for authoriting the reprinting.