Cheng Jinhua

Distinguished Professor, Koguan School of Law, Shanghai Jiao Tong University

Ke Zhenxing

Ph.D. Candidate, Maurer School of Law, Indiana University

Abstract: From the perspective of central-local relations, there is an obvious "Chinese characteristics" regarding the de jure allocation of legislative and judicial powers and their de facto practice. That is, while the national legislature and supreme court have an unchallengeably dominating position in the Chinese legal system on books, local practices are no less influential in action. The authors conceptualize this institutional phenomenon as "federalist spectrum in a unitary background" of the Chinese legal system and examine the concept with an empirical study on labor contract law. The empirical study finds that there are enormous local labor contract laws and rules, which are significantly different from or even conflicting with national laws. In particular, regression analysis on 4,175 cases adjudicated by courts in Beijing, Guangzhou, and Shanghai confirms that localities have different positions in protecting employee rights, which is statistically significant.

Keywords: Relationship between Central and Local Governments; Unitary System; Federalism; Labor Contract Law; Empirical Legal Studies

In modern rule-of-law countries, "legal powers", including legislative power and judicial power, are the most important components of state power, and their allocation and implementation usually determine the actual state of a country's political life. However, if we observe the allocation and implementation of China's legal powers from the perspective of the relationship between the central and local governments (hereinafter referred to as "central-local relations"), we seem to often be in the conflict of different common senses. On the one hand, what we are very familiar with is that China is a unitary state, and the formulation and implementation of laws are highly unified; on the other hand, in the legal practice of most fields, when facing specific legal issues, it is crucial to be familiar with the local regulations, normative documents, judicial guiding opinions or precedents regarding those issues. In other words, although in jurisprudence, the central legislative and judicial practices have incomparable dominance over the implementation of laws across the country and are guaranteed at the constitutional level, in practice, the local legislative and judicial practices are no less important than the central ones. To a large extent, it is "dangerous" not to understand the local legislative and judicial practices. In fact, this institutional tension regarding "central vs. local" or "consistency vs. difference" has always been one of the focal issues in the practice of China's legal powers.

For such a remarkable legal phenomenon with Chinese characteristics, how should we summarize it at the theoretical level? What factual impacts will this phenomenon have on the protection of citizens' rights? If there are factual impacts, what normative significance do these impacts have for China's rule of law construction and political construction? These are the series of questions to be considered in this article. Combining with the empirical research on China's central-local relations in the social science circle in recent years, we extend the concept of "De Facto Federalism" to legal research in this article, emphasizing the "federalist spectrum" in the practice of China's legal powers under the "unitary background", and conduct an empirical study by taking the legislative and judicial practices in the field of Labor Contract Law as an example. The focus of the empirical study is to use more than 4,000 judgments made by courts in Beijing, Shanghai and Guangzhou from 2014 to 2015, which involve the illegal termination of labor contracts, to illustrate the actual impact of the "federalist spectrum" on the protection of Chinese citizens' rights and its normative and theoretical implications with facts.

1.Unitary System, Federalism, and the Allocation and Implementation of Legal Powers

The vertical allocation of state power, including legal powers, between the central government and local governments is referred to as the "form of state structure" in Chinese constitutional law textbooks. This is not only one of the core contents of the constitutional system of contemporary states, but also one of the core issues in the construction of a law-based government. However, there are disputes over how to understand the allocation and implementation of China's legal powers from the perspective of central-local relations.

Although the 1982 Constitution of the People's Republic of China does not use the term "unitary system" or similar expressions throughout the text to describe the central-local relations in contemporary China, the vast majority of current constitutional law textbooks hold that the People's Republic of China is a typical unitary state. This understanding of the unitary system is the mainstream doctrine in China's legal circle at present. However, according to Su Li's tripartite classification of political-legal jurisprudence, interpretive jurisprudence (also known as legal dogmatics) and socio-legal studies, the view that China is a typical unitary state is essentially a political-legal jurisprudence doctrine that proclaims political stance. It has not undergone rigorous demonstration by legal dogmatics, and is even increasingly challenged by research findings from social sciences (including socio-legal studies). Among these challenges, the "Market-Preserving Federalism" theory put forward by political economists Barry R. Weingast and Qian Yingyi regarding contemporary China, as well as Zheng Yongnian's theory of "behavioral federalism", have exerted significant academic influence. According to these studies, although China is a unitary state in name, it has demonstrated de facto federalist characteristics in the formulation and implementation of economic policies, which have had a major positive impact on the development of China's market economy in the contemporary era. Yang Guangbin, a political scientist, even argues that the outdated concept of "form of state structure" should be abandoned, and replaced with the more straightforward "central-local relations" or "intergovernmental relations". He also holds that the central-local relations in contemporary China embody a dual structure of "political unitarism" and "economic federalism". In this article, we summarize these social science theories as "de facto federalism" (as opposed to "de jure federalism"). Within the legal circle, some scholars have also questioned the accuracy of the concept of unitary system through empirical research based on the practice of specific legal systems. For instance, based on empirical observations in the field of administrative law enforcement inspection, Lin Yan argues that China's current central-local relations have shown signs of "cooperative federalism", which is vastly different from the unitary system. In addition, Tang Yingmao and Liu Zhuang have recently described the federalist characteristics of China's legal system by taking financial regulation of microcredit as an example. These debates over the unitary system are not only of great significance in terms of knowledge and theory, but also influence people's value stances on what form of state structure China should adopt in the future. To a large extent, these differences in understanding stem from the varying definitions, research perspectives and research methods held by different scholars.

From the perspective of the distribution of state power between the central government and local governments, we can roughly distinguish the following three definitions of unitary system and theories on the differences between unitary system and federal system.The first definition takes the way of defining the power distribution between the central government and local governments as its core criterion. Under this definition, whether the constitutional powers of local governments are defined and guaranteed by the constitution is the sole criterion for distinguishing a unitary system from a federal system. Since this definition tends to define the unitary system based on the procedure of power distribution, it may be called the procedural theory of unitary system.

The second definition corresponds to the procedural theory, and places greater emphasis on defining the unitary system from the perspective of the substance of power distribution. For instance, Tong Zhiwei argues: "The difference between a unitary system and a federal system lies fundamentally in just one aspect: that is, to determine whether sovereign power is monopolized exclusively by the national government or shared between the national government and regional governments. A system where the national government monopolizes sovereign power is a unitary system, while one where the national government shares sovereign power with regional governments is a federal system." Since this definition focuses more on the substantive distribution of state power, it may be referred to as the substantive theory of unitary system.

The third definition of the unitary system is adopted by the vast majority of textbooks in China; it mainly defines the unitary system through the external form of the state’s constitutional structure, so we may call it the formal theory or the doctrine of external form of the unitary system.For example, in Constitution of China, a textbook for liberal arts in institutions of higher learning edited by Xu Chongde in his early years, the unitary system is defined as follows: "A unitary state is relatively simple in form, with only one constitution and one central government nationwide." Later, scholars holding similar positions have continuously revised this definition. Currently, most scholars agree that the unitary system encompasses the following "external forms": namely, there is only one unified constitution nationwide, and laws are enacted by the unified central legislative body in accordance with the constitution; there is only one unified legislative body and one complete judicial system nationwide; all local administrative units and autonomous units are under the unified leadership of the central government, and the powers of local governments are granted by the central government; local administrative units and autonomous units have no power to secede from the central government to become independent; there is only one unified nationality; and in foreign relations, the state as a whole is the sole subject of international law.

The above three theories on the definition of the unitary system each have their own merits and different focuses. If there is any common ground among them, it is that all three definitions either explicitly state or implicitly imply a message: in a unitary state, all powers ultimately belong to the central government——though this does not rule out the possibility that the central government may delegate some of its powers to local governments for exercise. For this point, the substantive theory of unitary system articulates it most clearly; the doctrine of external form of unitary system usually regards this as one of the core features of the state’s constitutional structure in a unitary system; while the procedural theory of unitary system implies this point. Of course, some scholars may also hold two or three of the above views simultaneously.

The above-mentioned definitions and distinctions of the unitary system/federal system by Chinese scholars are in line with the mainstream views of foreign scholars on federalism. William Riker, in his book Federalism: Origins, Operation, and Implications published in 1964, argued that federalism must meet three characteristics: first, there are two or more levels of government exercising jurisdiction over residents of the same region; second, each level of government is autonomous in at least one area; third, there is a certain degree of guarantee for the autonomy of each level of government within its respective scope (even if it is only a constitutional statement). Later, Riker further summarized that "federalism is a political organization in which government activities are shared by the central government and local governments, such that the central government and local governments each have the final say in certain areas." The "local governments" here mainly refer to the level of local governments directly below the central government, such as "states" in the United States and "provinces" in China. This definition of federalism by Riker later gained recognition and follow-up from many researchers.

By integrating the aforementioned definitions and distinctions of the unitary system/federal system, we can roughly sort out several operational criteria for distinguishing between the unitary system and the federal system. There are two dimensions here. One dimension is to combine the contents of the aforementioned substantive theory of unitary system and doctrine of external form of unitary system, and examine whether there are multiple levels of government and the situation of power distribution (for the convenience of the following discussion, we call this the "dimension of power distribution"). The core operational criteria of the dimension of power distribution are as follows. First, examine whether a country has multiple levels of government; if there is only one level of government, it is undoubtedly a unitary state. Second, if there are multiple levels of government, examine the source of power of the central government and local governments. If the power of the central government is derived from the authorization of local governments, it is relatively certain to be a federal system, and local governments usually retain residual powers. If state power is distributed through consultation between the central government and local governments, and neither party can unilaterally alter the power distribution, it is also usually a federal system. Conversely, if the power of local governments comes from the decentralization of power by the central government, the situation depends on the specific circumstances. Third, in the case where the central government decentralizes power to local governments, if the central government clearly defines the scope of decentralization, can unilaterally revoke the decentralization, and retains residual powers, then it is a typical unitary system. Fourth, in the case where the central government decentralizes power to local governments, if local governments have autonomy in independently exercising power in certain areas, and this autonomy in independent power exercise cannot be unilaterally rejected by the central government, or local governments have at least autonomous residual powers in certain areas, then such a power configuration exhibits federal characteristics to varying degrees (the reason for saying "to varying degrees" is that in this case, the autonomy of local governments in exercising power also varies in degree, with no uniformity). The above four scenarios constitute a general framework for us to define the central-local relations of a specific country. Of course, relatively speaking, the first three scenarios are relatively clear, while controversies usually arise in the last scenario. In the following text, we will further operationalize the "autonomy" of local governments in exercising power by combining the configuration and implementation of China’s legal power, which will not be elaborated on here for the time being.

The other dimension is to examine the way power is distributed and guaranteed between the central and local governments, which is precisely the core view of the aforementioned procedural theory (we call this the "dimension of power guarantee"). From this dimension, we can distinguish between "legal-rational" institutional arrangements and "behavioral" institutional arrangements. Legal-rational institutional arrangements are mainly reflected in the explicit provisions of the constitution or laws with constitutional status, and are usually static. Of course, legal-rational arrangements may be strictly implemented, flexibly implemented, or not implemented at all. In contrast, behavioral institutional arrangements refer to the institutional characteristics demonstrated in practice, and are usually dynamic. Legal-rational arrangements of power may well fail to be effectively implemented or be implemented in a flexible manner, so it is very necessary to study the behavioral characteristics of power. As Zheng Yongnian stated: "For China’s local governments, laws, regulations, and contracts usually mark the beginning of all matters. In the process of implementing laws, regulations, and contracts, the central government and various provinces must conduct different forms of negotiations and bargaining." Naturally, the behavioral characteristics of institutional practice may either strengthen its legal-rational characteristics or weaken them, and this dual relationship is universal. With the above-mentioned definition criteria of the two dimensions, we can further describe and analyze the configuration and implementation of legal power in contemporary China from the perspective of central-local relations.

The reason this paper focuses on "legal power" rather than conducting research on all state power is that the distribution of China’s political power, administrative power, and legal power between the central and local governments differs significantly. In particular, China’s political power — mainly reflected in political decision-making and personnel appointment and removal — is highly centralized. At the same time, since the appointment and removal of administrative leaders are highly centralized by the central government, and under the influence of the principle of "putting politics first," the characteristics of "behavioral federalism" in the administrative field have been increasingly eroded. In contrast, in the legal field, the localization of legislative power and judicial power has received unusually high attention recently.Regarding the distribution of legislative power between the central government and local governments, since reform and opening-up, there has been an obvious de facto expansion of local legislative power; moreover, after the amendment of the Legislation Law of the People's Republic of China in 2015, local legislative power has shown a trend of further expansion. In the judicial field, local judicial protectionism has been a major concern of both the theoretical and practical circles in recent years, and it is also one of the core issues of judicial reform since the 18th National Congress of the Communist Party of China. In the following text, we will first discuss the legal-rational configuration and practical implementation of legislative power and judicial power, and then, combining the aforementioned definitions of and distinctions between the unitary system and federal system, summarize the vertical institutional attributes of China’s legislative power and judicial power.

According to the Constitution of the People's Republic of China, the Legislation Law of the People's Republic of China, the Organic Law of People's Courts of the People's Republic of China, and other relevant legal systems, Table 1 summarizes the current legal-rational configuration of China’s legislative power and judicial power. We summarize this from two dimensions.One dimension is the central-local dimension. The "local governments" here include provincial-level administrative divisions (provinces, autonomous regions, and municipalities directly under the Central Government) or local governments below the provincial level, but mainly refer to Provincial People's Governments. In this dimension, we distinguish between legal powers "held by the central government", legal powers "granted to local governments", and the "configuration of residual powers" when there are no provisions in the Constitution or laws.The other dimension is the legislative-judicial dimension. In this dimension, we distinguish between "legislative power", "power of legislative interpretation", and "judicial power".

Table 1 Jurisprudential Allocation of Legal Power in Contemporary China

From Table 1, it can be roughly seen that within China’s current constitutional-legal framework, the distribution of legal power reflects the unified leadership and leading role of the Central People's Government. This also constitutes a doctrinal interpretation of law regarding the current central-local relations. However, in practice, those familiar with the practice of China’s legal power know that all the powers theoretically held by the Central People's Government in Table 1 are actually exercised by local governments, or at least exercised by local governments first. Specifically, there are the following obvious differences between the practice of legal power and the legal-rational configuration in Table 1.First, in terms of legislative power, regarding the practice of residual legislative power, local governments usually take the initiative to conduct experimental legislation, rather than the Central People's Government exploring it.Second, in terms of the practice of the power of legislative interpretation, the central legislative body only conducts legal interpretations occasionally; the vast majority of legal interpretations are implemented by the Supreme People's Court of the People's Republic of China (sometimes jointly with the Supreme People's Procuratorate of the People's Republic of China) in the form of "judicial interpretations" or "replies". More importantly, the legal interpretations of the Supreme People's Court of the People's Republic of China are usually lagging. Through judicial guidance opinions, judicial meeting minutes and other forms, local people's courts have actually conducted a large number of creative "judicial interpretations", among which a small part are absorbed by the Supreme People's Court of the People's Republic of China as national judicial interpretations.Third, in terms of the practice of judicial power, the vast majority of cases are tried by local people's courts and concluded at local people's courts at different levels (among which a very limited number of cases are eventually transferred to the Supreme People's Court of the People's Republic of China for trial). At the same time, the trial divisions (including circuit tribunals) of the Supreme People's Court of the People's Republic of China hear major cases of first-instance, second-instance or retrial through legal procedures. The absolute number of these cases is not small, but their proportion is very small compared with the total number of cases heard by courts across the country.Therefore, the trend of the transfer of legal power to local governments in practice is very obvious.

Then, the corresponding question is: what does this phenomenon of the transfer of power to local governments mean? How to determine the attribute of the state’s constitutional structure regarding the current configuration and implementation of China’s legal power, in comparison with the operational criteria for distinguishing between the unitary system and the federal system mentioned in the previous text? To answer these questions, we must return to the operational criteria for distinguishing between the unitary system and the federal system mentioned in the previous text. In terms of the "dimension of power distribution", on the whole, the legal-rational configuration of China’s legal power is closer to the third operational criterion; however, in its implementation, it has demonstrated a certain degree of autonomy of local legal power, and thus is closer to the fourth operational criterion mentioned in the previous text. Of course, the core issue of the fourth operational criterion is how to judge the "autonomy" of local governments in exercising power and its connection with the unitary system/federal system.

Here, we provide a further operational definition of "autonomy". We believe there are three criteria to measure the autonomy of local governments in exercising legal power. First, when the Central People's Government has no relevant legal systems in place, can local governments carry out institutional innovation and implement "new and original" legal systems? Second, when the Central People's Government has relevant legal systems in place, can local governments, in light of local actual conditions, implement "different" legal systems? Furthermore, third, when local governments implement different legal systems, can they contradict central legislative or judicial principles and implement "opposite" legal systems within their respective jurisdictions? We believe that whether local governments can implement "opposite" legal systems to those of the Central People's Government without explicit authorization from the latter is the primary litmus test for determining whether a state structure has federal attributes. Moreover, if the phenomenon of local governments implementing legal systems opposite to those of the Central People's Government is very common, the country as a whole is a federal state; conversely, if this situation only occasionally occurs in individual fields, the country is on the whole a unitary state. Below, we analyze this in combination with the practice of China's legal power.

First, regarding the issue of "new and original" legal systems, which means when there are no national legal systems in place, can China’s local governments innovate in legislation and judicial practice? The answer is yes. In fact, legislative innovation and judicial innovation by local governments are the norm in the development of contemporary China’s legal system, particularly reflected in experimental legislation and judicial practice.There are numerous examples in terms of legislation, and such innovation is also protected at the doctrinal level of law. In terms of judicial practice, although the judicial interpretations of the Supreme People's Court of the People's Republic of China play a crucial role in filling gaps in legislation, the Supreme People's Court of the People's Republic of China usually cannot provide timely rule-based guidance for local judicial practice. To resolve disputes, local people's courts often need to conduct their own "judicial interpretations" in a timely manner and apply them within their respective jurisdictions in the form of "guiding opinions". These local judicial guiding opinions are typical examples of judicial power innovation. Of course, in many cases, taking into account local differences, central legislation or judicial interpretations explicitly state in certain provisions that "localities may formulate implementing rules or judicial standards for their respective jurisdictions in light of their own actual conditions".

Second, regarding the issue of "different" legal systems, which means when there are national legal systems in place, can local governments implement legal systems different from the national ones in legislation and judicial practice? The answer is also yes.There are two scenarios here. One scenario is that the central authorities explicitly stipulate that specific regions may implement legal systems different from the national ones. A typical example in this regard is the Pilot Free Trade Zones (FTZs). When Shanghai established its Pilot Free Trade Zone in 2013, the Standing Committee of the National People's Congress (NPCSC) specially decided to suspend the application of relevant foreign investment laws in the Shanghai Pilot Free Trade Zone, and allowed the Shanghai Pilot Free Trade Zone to formulate its own legislation and implement a different foreign investment legal system.The other scenario is that the central authorities set a baseline standard as the default national legal system, but allow localities to adopt different systems above this baseline. An example is the minimum wage standards specified in the Labor Law of the People's Republic of China. In judicial practice, it is also the norm for local people's courts to apply different standards for sentencing, compensation and indemnification.

Third, regarding the issue of "opposite" legal systems, which means to further ask: can local governments contradict central legislative or judicial principles and implement "opposite" legal systems within their respective jurisdictions, or in other words, can localities say "no" to the central government’s legal systems? From a doctrinal perspective of law, due to China’s highly centralized central political power and the constitutional provision of "under the unified leadership of the central authorities", it is unlikely for legislators and judicial personnel of local governments to say "no" to the central government’s legal systems. However, in practice, it is not uncommon for local legislators and judicial personnel to negotiate and bargain with the central authorities through various means and secretly implement legal systems opposite to those of the central government. For example, before its amendment in 2013, the Company Law of the People's Republic of China required all companies to adopt the actually paid capital system for registered capital. In practice, however, company registrations in almost all localities across the country evaded the actually paid capital requirement to varying degrees. A common practice was that intermediary institutions would provide funds on behalf of clients for registration, and then withdraw the funds after the registration was completed. To improve the efficiency of company registration, Zhuhai City formulated the Regulations on Commercial Registration of the Zhuhai Special Economic Zone in 2012, which broke through the requirements of the Company Law of the People's Republic of China and adopted the subscription-based capital system locally. Although Zhuhai City, as a Special Economic Zone, has relatively extensive local legislative power, there is considerable controversy over whether such local legislation, which clearly contradicts national legislation, is in line with the Legislation Law of the People's Republic of China and the constitutional system governing central-local relations. In terms of judicial practice, there are also occasional cases where local "judicial interpretations" and judicial practice contradict the judicial interpretations of the Supreme People's Court of the People's Republic of China. For instance, our previous research found that when handling private lending cases, many local people's courts have actually broken the "four-times interest rate rule" that central legislators and the Supreme People's Court of the People's Republic of China required to be uniformly implemented.

It can be seen from this that China’s local governments have a certain degree of autonomy in implementing legal systems that are "new and original", "different" or "opposite" compared with national legal systems. The question then arises: To what extent is this autonomy protected by institutional guarantees? As for local governments’ implementation of new and original or different legal systems, as long as it is within the scope permitted by law, it should, by definition, be protected by institutional guarantees. Of course, in China, since local governments do not have a decisive influence on the formulation of national legal systems, these doctrinal institutional guarantees may weaken or disappear at any time due to changes in central legislation. Therefore, although the local implementation of new and original or different legal systems has institutional guarantees in terms of doctrine, in practice, such guarantees are only "certain" institutional guarantees. As for the third scenario where local governments implement legal systems opposite to those of the central government, there is no guarantee in terms of doctrine. The Legislation Law of the People's Republic of China clearly stipulates that local legislation may be rejected by central legislative bodies, and final judgments of local people's courts may be overruled by the Supreme People's Court of the People's Republic of China. Therefore, whenever local governments exercise legal power in violation of central legal systems, such exercise of power has no institutional guarantee in terms of doctrine.

However, in practice, even the practice of local legal power that violates the central authorities’ principles is often "final in practice". This is mainly caused by the following two reasons. First, China has a vast territory and a large population. In fact, a single Central People's Government (including one central legislative body and one Supreme People's Court of the People's Republic of China) cannot possibly legislate or adjudicate on all issues. Even when problems are found in the practice of local legal power, it can only "turn a blind eye to them" due to constraints such as human, material, and financial resources. In other words, in a large country like China, the time costs, procedural costs, and other costs for the Central People's Government to change local legal practices are very high. Without strong external impetus, the Central People's Government usually will not rectify local legal practices. Therefore, as long as local legal practices do not cause serious reputational or substantive harm to the Central People's Government, even those that violate central legal systems may exist for a long time. Second, also due to China's vast territory and large population, the differentiated practice of local legal power is highly reasonable. The central legislative bodies and judicial organs also recognize that if they forcibly standardize and unify the differentiated local practices, it will inevitably lead to irrationality. Therefore, the central legislative bodies and judicial organs largely tolerate and acquiesce in the autonomy of local legal power practice. Conversely, the local legislative bodies and judicial organs also understand this logic, and in the dynamic game with the central legislative bodies and judicial organs, they create and practice some legal systems that are opposite to those of the latter. For this reason, the autonomy of local legal power also has a certain "behavioral" institutional guarantee.

To sum up, according to the operational criteria we defined above, we hold that regarding the configuration of China’s legal power between the central and local governments, although the doctrinal keynote is a unitary system, it exhibits a certain degree of federal characteristics in practice (see Table 2). For this reason, we define the configuration and implementation of China’s legal power as "unitary system as the keynote + federal elements". Its implication is that: although the Central People's Government exercises unified leadership over national legislation and judicial affairs in terms of doctrine, local governments have autonomous legislative and judicial power in many fields, and frequently create legal rules that are new and original, different, or even opposite—compared with national legislation or judicial practices—and in fact obtain a certain degree of institutional guarantee or persist for a long time in practice.

Table 2 Attributes of the Vertical Configuration and Implementation of China’s Legal Power

2.Federal Practices in China's Labor Contract Law Field

After proposing the concept of "Unitary System + Federalism" above, we continue to take the field of Labor Contract Law as an example to demonstrate the federal practices within it (since the unitary system as the keynote is the default institutional setting of China’s current central-local relations, we will not focus on its discussion here). The main reason for choosing the field of Labor Contract Law is that, compared with other legal sectors (such as Criminal Law and Civil Law), the contemporary Chinese labor contract legal system has a stronger local character and affects the rights and obligations of every Chinese worker. We will first outline China’s labor relations legislation since the reform and opening-up policy from the perspective of central-local relations, and then focus on institutional cases such as "resolution of disciplinary violations in labor contracts" to provide a detailed description of the federal practices of legal power.

2.1 The Legal System of Labor Relations from the Perspective of Central-Local Relations

In the planned economy era, work units generally implemented a lifelong employment system and took care of all employees' needs. Labor relations were more about political, economic, and social relations rather than legal relations. After the reform and opening-up, the main direction of labor relations reform was to implement the labor contract system and shift toward legal relations. Correspondingly, the government also recognized the importance of legislative regulation. However, in practice, the Central People's Government did not formulate legislation; instead, localities took the lead in exploring the labor contract system, which was gradually affirmed by the Central People's Government. At that time, the state designated three provincial-level administrative regions——Guangdong Province, Shanghai Municipality, and Zhejiang Province——as pilot areas for the labor contract system. Guangdong Province conducted a pilot of the labor contract system in Qingyuan County; Zhejiang Province chose Hangzhou City, Shaoxing City, and Changguang Coal Mine for its pilot; and Shanghai Municipality issued the Circular on Trial Implementation of the Contract Worker System in Some State-Owned Enterprises. In 1983, the Ministry of Labor and Personnel affirmed the then ongoing trial implementation in some regions in its Circular on Actively Trial Implementing the Labor Contract System. On the basis of summarizing the legislative experience of various localities, the State Council issued the Interim Provisions on the Implementation of the Labor Contract System in State-Owned Enterprises in 1986. This document served as an important legal basis for promoting the labor contract system and also marked a phased victory in labor market reform.

The Labor Law of the People's Republic of China, adopted by the Standing Committee of the National People's Congress (NPCSC) in 1994, marks a very important watershed. As the first national legislation regulating labor relations in the People's Republic of China, this law comprehensively and systematically stipulates the basic rights and obligations of workers. After the adoption of this law, the then Ministry of Labor promptly promulgated the Opinions on Several Issues Concerning the Implementation and Enforcement of the Labor Law of the People's Republic of China on August 4, 1995. Subsequently, the Supreme People's Court of the People's Republic of China also issued the Interpretation of the Supreme People's Court on Several Issues regarding the Application of Law to Employment Disputes (Fa Shi [2001] No.14) and the Interpretations of the Supreme People's Court on Some Issues concerning the Application of Laws for the Trial of Labor Dispute Cases (II) (Judicial Fa Shi [2006] No. 6) successively. However, the aforementioned central-level legislation, legislative interpretations, and judicial interpretations still could not cope with the complex local legal practices across the country. Therefore, localities have taken various measures to improve labor laws. The characteristic of local legislation at this stage is that the "judicial interpretations" of local legislative bodies and local people's courts advance side by side. In the process of such local legislation and judicial practice, localities have also created many new systems.

Since the beginning of the 21st century, in view of the increasing complexity of labor relations, and on the basis of the aforementioned Labor Law of the People's Republic of China and the practice of local labor contract legal systems, the Standing Committee of the National People's Congress (NPCSC) enacted the Labor Contract Law of the People's Republic of China in 2007, which further clarified the rights and obligations of workers in terms of the signing, performance, modification, termination, and dissolution of labor contracts.In 2008, the State Council promulgated the Implementation Regulations for the Labour Contract Law of the People's Republic of China, which clarified several important provisions of the Labor Contract Law of the People's Republic of China. After this regulation by the State Council, the Supreme People's Court of the People's Republic of China, on the basis of the two previous judicial interpretations, successively issued the Interpretation of Supreme People's Court of Several Issues on the Application of Law in the Trial of Labor Dispute Cases (III) (Fa Shi No. 12 (2010) of the Supreme People's Court) and the Interpretations of Supreme People's Court on Several Issues Relating to Laws Applicable for Trial of Labour Dispute Cases (IV) (Fa Shi (2013) No. 4).

However, just as the national legislation, legislative interpretations, and judicial interpretations of the Labor Law of the People's Republic of China cannot meet the complex and ever-changing daily legal practices across various localities, the national legal systems concerning the Labor Contract Law of the People's Republic of China also fail to address the specific needs of localities for legal rules. After the promulgation of the Labor Contract Law of the People's Republic of China, although local legislative bodies did not rush to follow up with local legislation, local "judicial interpretations" have been promulgated one after another, providing more detailed provisions on certain issues. According to our statistics, in the approximately ten years from 2008 to the present, no fewer than 50 local "judicial interpretations" have been issued by higher people's courts or intermediate people's courts across the country, either independently or jointly with labor dispute arbitration institutions.

Due to space limitations, we only list some representative local "judicial interpretations" here, which will also be mentioned in the following analysis. At the provincial level, The Higher People's Court of Beijing Municipality and the Beijing Municipal Labor and Personnel Dispute Arbitration Commission jointly issued the Symposium Minutes on Issues Concerning the Application of Law in Labor Dispute Cases, Symposium Minutes on Issues Concerning the Application of Law in Labor Dispute Cases (Ⅱ), and Answers to Issues Concerning the Application of Law in the Trial of Labor Dispute Cases in 2009, 2014, and 2017 respectively (hereinafter referred to as "Beijing Interpretation 2017"); the Higher People's Court of Shanghai Municipality issued the Judicial Interpretation on the Application of the Labor Contract Law of the People's Republic of China in 2009 (hereinafter referred to as "Shanghai Interpretation"); the Higher People's Court of Guangdong Province and the Guangdong Provincial Labor and Personnel Dispute Arbitration Commission jointly issued the Guiding Opinions on Several Issues Concerning the Application of the Labor Dispute Mediation and Arbitration Law and the Labor Contract Law of the People's Republic of China (hereinafter referred to as "Guangdong Opinions") and the Colloquium Minutes on Several Issues Concerning the Trial of Labor and Personnel Dispute Cases in 2008 and 2012 respectively. At the level of sub-provincial cities or prefecture-level cities, the Intermediate People's Court of Shenzhen City issued the Guiding Opinions on Several Issues Concerning the Trial of Labor Dispute Cases (Trial Implementation) and the Adjudication Guidelines for the Trial of Labor Dispute Cases (2015) in 2009 and 2015 respectively; the Intermediate People's Court of Guangzhou City issued the Reference Opinions on the Trial of Labor Dispute Cases in 2009, the Symposium Minutes on Labor Dispute Cases (jointly issued with the Guangzhou Municipal Labor Dispute Arbitration Commission) in 2011, and the Trial Reference for Labor and Personnel Dispute Cases in 2017 respectively; the Intermediate People's Court of Suzhou City and the Suzhou Municipal Labor Dispute Arbitration Commission issued the Labor Dispute Symposium Minutes (Ⅰ) in 2010 (hereinafter referred to as "Suzhou Interpretation").

From the aforementioned national and local legislative and judicial documents, it can be seen that since the reform and opening-up, China’s legal practice in regulating labor contract relations has reflected the general characteristics described above—namely, although legislative power and judicial power are under the unified leadership and dominance of the Central People's Government in terms of doctrine, in practice, driven by subjective and objective reasons, local governments exercise legal power in a very active and frequent manner. In the following text, we will continue to illustrate the federal elements in the practice of legal power in labor contracts through cases of disciplinary termination of labor contracts.

2.2 Institutional Case: Disciplinary Termination of Labor Contracts

Disciplinary Termination of Labor Contracts is an institutional case that can well demonstrate the federal elements in the practice of China’s labor contract legal system. Article 39 of the Labour Contract Law of the People's Republic of China stipulates that where a worker "has committed a serious breach of the employer's rules and system", the employer may rescind the labor contract. This is the "disciplinary termination" clause, which is one of the core contents of the labor contract legal relationship. The employer's decision to rescind directly determines whether the worker can retain the job, so the law has strict provisions on the legality of disciplinary termination. In particular, regarding the "employer's rules and system" mentioned in the clause, Article 4 of the Labour Contract Law of the People's Republic of China separately stipulates: "When an employer formulates, revises or decides on rules or major matters pertaining to labor remuneration... which directly involves the vital interests of workers, such matters shall be discussed by the employee representatives congress or all staff who shall make proposal and give their opinion and the employer shall carry out equal negotiation with the labour union or employee representatives before making a decision.... Employers shall announce decisions on rules and major matters which directly involve the vital interests of workers or notify the workers." Although these clauses are important, for various reasons, the Supreme People's Court of the People's Republic of China has not issued judicial interpretations on the disciplinary termination clause. In practice, the interpretation of disciplinary termination matters (especially the legality of rules and systems) is concentrated in local "judicial interpretations". In these local "judicial interpretations", we find that there are "new and original", "different" and "opposite" rules compared with national laws.

First, compared with national laws, some local legislation or local "judicial interpretations" have expanded workers' rights—in other words, localities have implemented "new and original" legal systems. For example, Suzhou City has added the right to plead to workers. According to the Suzhou Interpretation, where an employer rescinds the labor contract on the grounds that the worker has seriously violated the rules and systems, etc., it shall provide the worker with an opportunity to plead to meet the basic requirements of due process; if the employer fails to prove that it has provided the worker with an opportunity to plead, and the worker claims that the employer has illegally rescinded the labor contract, such claim shall be supported.

Second, different "judicial interpretations" on disciplinary termination exist in different regions. Here, we take the relationship between rules and systems and labour discipline as an example to illustrate this point. Article 3 Paragraph 2 of the Labour Law of the People's Republic of China stipulates that workers shall "observe labour discipline and professional ethics". However, the term "labour discipline" no longer exists in the clauses of the Labour Contract Law of the People's Republic of China. So in judicial practice, can employers rescind labor contracts with workers on the ground of violating labour discipline? Suppose an employee traveled abroad without authorization during sick leave, but there are no restrictive provisions on employees' leave locations in the employer's rules and systems—can the employer rescind the labor contract with the employee on the ground of violating labour discipline? Rules and systems cannot cover every detail. Suppose an employee's behavior violates socially recognized labour discipline and professional ethics, but this behavior of the employee is not specified in the employer's rules and systems—can the employer rescind the labor contract in accordance with labour discipline?

The practice in Shanghai Municipality is that employers may rescind labor contracts on the ground of labour discipline. According to Article 11 of the Shanghai Interpretation, the performance of labor contracts shall comply with the principles of legality and good faith. In addition to the constraints of rules and systems, there are actually many agreed obligations and contractual obligations to be borne pursuant to the principle of good faith between the parties to a labor contract. For example, the provision in Article 3 Paragraph 2 of the Labour Law of the People's Republic of China that "workers shall observe labour discipline and professional ethics" is the legal basis for such obligations. If a worker raises a defense on the ground that the employer's rules and systems do not contain relevant provisions, such defense shall not be supported. However, the court system in Beijing Municipality adopts a stricter stance towards employers. In the case of "Beijing Alibaba Computing Technology Co., Ltd. v. Ding Jisheng (Labor Dispute)", Ding Jisheng was an employee of Beijing Alibaba Computing Technology Co., Ltd. He traveled to Brazil during sick leave and was discovered by the company, which then rescinded his labor contract on the ground of violating the enterprise's rules and systems. Ding Jisheng refused to accept the decision and filed a lawsuit with the Haidian District People's Court of Beijing Municipality, which ruled that the rescission was invalid and that both parties should continue to perform the labor contract. The defendant, namely Beijing Alibaba Computing Technology Co., Ltd., refused to accept the first-instance judgment and appealed to the No.1 Intermediate People's Court of Beijing Municipality. In the second-instance judgment of the case (2015) No.1 Beijing Int'l People's Court Civ. Final No. 650, the No.1 Intermediate People's Court of Beijing Municipality upheld the original judgment and held that: the appellant company's rules and systems did not contain restrictive provisions on the location of employees' leave during sick leave, and there were no restrictive provisions in the law either. This means that the employee's act of traveling to Brazil during sick leave itself was not restricted by the rules and systems or the law. Therefore, the company's decision to rescind the labor contract with the employee on the ground of the employee's serious violation of the enterprise's rules and systems lacks legal basis.

Finally, there are conflicts between local legal rules and national legal rules in certain areas. This is mainly reflected in the democratic procedure for formulating rules and systems. The Labour Contract Law of the People's Republic of China expressly stipulates the democratic procedure for employers to formulate rules and systems. However, the provisions in Guangdong Province, Zhejiang Province and other regions have lowered the requirements for the democratic procedure, supporting that rules and systems not going through the democratic procedure can still be legal under certain conditions. For example, Article 20 of the Guangdong Opinions stipulates that after the implementation of the Labour Contract Law of the People's Republic of China, if an employer formulates or revises rules and systems or major matters directly involving the vital interests of workers without going through the democratic procedure stipulated in Paragraph 2 of Article 4 of the Labour Contract Law of the People's Republic of China, such rules and systems in principle cannot be used as the basis for the employer's employment management; however, if the content of the rules and systems or major matters does not violate the provisions of laws, administrative regulations and policies, there are no obviously unreasonable circumstances, and they have been publicized or notified to workers with no objections from workers, they may be used as the basis for labor dispute arbitration and rulings by people's courts. As some scholars have commented, the interpretations made by these judicial opinions on issues such as the "democratic procedure" have actually deviated from the original legislative intent.

In addition to the disciplinary termination of labor contracts, local legislation and local "judicial interpretations" also have very obvious different provisions in many other fields. For example, in the implementation of non-fixed-term labor contracts stipulated in Article 14 of the Labour Contract Law of the People's Republic of China, local legislative and judicial practices vary greatly, and new and original, different and even conflicting local institutional practices compared with the Labour Contract Law of the People's Republic of China have also emerged. Due to space limitations, this paper will not elaborate on these other institutional cases.

2.3 Autonomy of Local Legal Rules on Labor Contracts

As mentioned earlier, when Chinese local governments exercise legislative power and judicial power, their autonomy has received institutionalized protection to different degrees in terms of legal principle and in practice respectively. In the field of the Labour Contract Law of the People's Republic of China, local governments are not only very active but also sustainably engaged in creating new and original, different or even opposite legal rules. Among some of the local "judicial interpretations" listed earlier, most of them have existed for more than 5 years. Although we have not conducted in-depth interviews, we have reason to speculate that the central legislative and judicial authorities should be aware of the new and original, different or even opposite local legal rules on labor contracts and their practices.

Of course, the central authorities' awareness of this does not mean they must take action. The most important reason for not taking action is that new and original, different labor legal rules innovated by local governments are permitted, and even encouraged, by China's legislative system. As for those local legislation or local "judicial interpretations" that conflict with national laws, the central legislative or judicial authorities may neither have the energy nor the "institutional leverage" to correct them. In particular, China's labor dispute resolution adheres to the principle of "arbitration first, then litigation", and the first-instance trial is conducted in grassroots people's courts. This means that in accordance with the procedural rule of two-instance final judgment in Chinese courts, normal labor dispute lawsuits will conclude at the second-instance stage; except for retrial or remand for trial, neither higher people's courts nor the Supreme People's Court of the People's Republic of China have the opportunity to handle specific labor dispute cases.

According to our statistics, as of April 20, 2017, the total number of judgments on labor contract disputes published on China Judgments Online was 103,578, among which 0 were made by the Supreme People's Court of the People's Republic of China, 73 by higher people's courts, 21,131 by intermediate people's courts, and 82,374 by grassroots people's courts. These data indicate that because the Supreme People's Court does not directly handle specific labor contract dispute cases, it lacks a very intuitive understanding of whether national laws are reasonable. Both the unique procedural arrangement for labor contract disputes and the general principles of China's procedural laws mean that the central legislative and judicial authorities not only have no realistic pressure to eliminate the differences between the new and original, different or even opposite legal rules innovated across regions, but also lack a strong "institutional leverage" in their work procedures. Conversely, the innovation, pursuit of differences, and deviation in local labor legislation and judicial practices have, to a certain extent, obtained de facto institutional protection. Although this protection cannot be justified at the legal principle level, it is sustainable in practice. In this sense, the practice of labor contract law has well confirmed the federal practice of China's legal power.

3.The Impact of Federal Practices on the Protection of Rights: Preliminary Empirical Evidence

As mentioned earlier, we have elaborated on the federal elements in the practice of China’s legal power by taking labor contract law as an example. Although labor contract law has significant differences in content compared with other legal sectors, from the perspective of central-local relations, the operation of power in all legal sectors has more or less similarities. To a certain extent, it can be said that federal practices permeate most areas of the contemporary Chinese legal system, especially the areas where local governments have legislative power. In this case, we must further inquire: What kind of impact will the federal practices of legal power have? What are the advantages and disadvantages of this impact on China’s rule of law construction and national governance? The former is a factual issue, while the latter is a normative issue. Given that the answer to the factual issue helps us answer the normative issue, here we continue to take the field of labor contract law as an example to prove the factual impact of the federal practices of legal power on the protection of labor rights through empirical research.

The basic hypothesis of this paper is: After local legislative and judicial authorities with certain power autonomy formulate local rules, local courts are more inclined to adjudicate in accordance with local rules; specifically in labor contract disputes, rules more friendly to workers (enterprises) may lead to adjudication results more friendly to workers (enterprises), with the existence of systematic biases. Here, we will verify the above hypothesis through an empirical research on cases of disciplinary termination of labor contracts in three cities, namely Beijing, Shanghai and Guangzhou.

3.1 Sample Introduction

Pursuant to the provisions of the Labour Contract Law of the People's Republic of China, if an employer claims that a worker has committed a disciplinary violation and thus rescinds the labour contract with the worker, it must satisfy five conditions; if these five conditions are not met, the employer is likely to be ruled to lose the lawsuit. Here, we take an employee being late as an example to illustrate the content of these five conditions. Suppose an employee is late three times in one month; if the employer intends to lawfully dismiss him, it must meet five elements: First, the employer must have rules and systems, and the rules and systems must clearly stipulate that employees who are late more than three times in a month may be dismissed by the employer; Second, these rules and systems must be adopted through democratic procedures and notified to workers; Third, the employer must collect evidence (such as attendance records) to prove that the employee was indeed late three times; Fourth, the employer must also consider factors of reasonableness. For example, if an employee is late because he takes his sick family member to see a doctor, or is late due to his own illness with a hospital certificate, the judge will also consider whether such punishment is too severe or unreasonable; Fifth, pursuant to Article 43 of the Labour Contract Law of the People's Republic of China, an employer which unilaterally rescinds a labour contract shall notify the labour union of the reason beforehand.

However, in Beijing, Shanghai and Guangzhou, we found that there are differences in the implementation of the provisions of this clause among the three places, which are mainly reflected in the first and second steps. Beijing courts strictly enforce the review of the first and second steps. Shanghai has relaxed the requirements for the first and second steps: if an enterprise has no rules and systems or the rules and systems do not stipulate the employee's behavior, the enterprise may rescind the labor contract in accordance with labour discipline. Guangzhou has loosened the requirements for the second step, that is, if the rules and systems are not formulated through democratic procedures, but the content of the rules and systems or major matters does not violate the provisions of laws, administrative regulations and policies, there are no obviously unreasonable circumstances, and they have been publicized or notified to workers with no objections from workers, they may be used as the basis for labor dispute arbitration and rulings by people's courts. It can be seen from these rule differences that Shanghai's local rules are the most favorable to enterprises, Beijing's local rules are the most favorable to workers, and Guangzhou's local rules are in the middle. According to the theoretical hypothesis mentioned earlier, we speculate that after controlling for other appropriate variables, workers in Beijing are most likely to win the lawsuit, workers in Shanghai are most likely to lose the lawsuit, and workers in Guangzhou are in the middle. With this hypothesis, we collected and sorted out the relevant judicial documents of these three cities from China Judgments Online. It is worth noting that in addition to the above-mentioned institutional differences, the three cities of Beijing, Shanghai and Guangzhou were selected for the study because they are located in northern, eastern and southern China, having certain regional representativeness; in addition, the number of uploaded judicial documents in these three places is relatively large, ensuring the adequacy of the sample.

However, judges have not cited the relevant clauses of the Labour Contract Law of the People's Republic of China in all judicial documents involving the disciplinary termination of labor contracts, which has brought difficulties to our retrieval. We have to adopt keyword retrieval to collect judicial documents. The specific operations are divided into the following steps. Step 1 is Judgment retrieval. That is, enter "rescission based on rules and systems" in the full-text search box of China Judgments Online; select "judgments" for the document type; select "civil cases" for the case type; and select the judgment date from January 1, 2014 to December 31, 2015. Step 2 is Limit the trial level. This study only includes judgments from grassroots people's courts and intermediate people's courts, excluding those from higher people's courts. The reason is that the labor dispute procedure implements the "one arbitration and two trials" system—no matter how large the amount of a labor dispute case is, it must go through the procedures of labor arbitration, first-instance trial and second-instance trial, and no case can be filed directly at the second-instance stage; in addition, after one arbitration and two trials, there are almost no cases retried by higher people's courts, so this study no longer considers higher people's courts. At the same time, considering that courts in Shanghai and other places may also rescind labor relations directly based on labour discipline, we also conducted full-text retrieval with the keyword "rescission based on labour discipline", while other retrieval items remained unchanged. After obtaining the judgments according to the above methods, we conducted manual reading one by one to confirm whether the cause of action of the judgments is disputes over the disciplinary termination of labor contracts. For example, during retrieval, we may find cases of rescission of labor relations due to incompetence for the position—since rules and systems may also involve some performance evaluations, such rescission of labor relations will also involve rules and systems, but they are not included in this study; we also examine judges' findings of facts on the rescission of labor relations—if the court finds that the labor relations have not actually been rescinded after accepting the case, but it is only a misunderstanding between the two parties, and there is no need to review the legality of the rescission of labor relations, such cases are not included in this study; similarly, if the court finds that the two parties have rescinded the labor relations by mutual agreement, it will not review the legality of the rescission of labor relations due to serious disciplinary violations. If an enterprise has rescinded the labor relations with a worker for other reasons and then rescinds the labor relations with the same worker again on the ground of disciplinary violations, such cases are not included in this study either.

We also screened the second-instance judgments. In the second-instance trial, if a worker or an employer appeals for other reasons that no longer involve the review of disciplinary termination of labor relations, such second-instance cases are not included in the scope of this study. If the second-instance trial only involves the amount of compensation or severance pay, and the two parties only have objections to the amount, such cases are also not included in this study. Finally, regarding multi-person disputes: a disciplinary termination of labor contracts may involve the rescission of labor contracts with multiple workers, which will form multiple independent labor disputes when filed; however, this study only handles such cases as one sample. Since this study does not involve workers' information and only focuses on court information and case information, this operation will not lead to information loss. After completing all the above steps, we obtained 2,071 judgments from Shanghai, 1,565 from Beijing, and 539 from Guangzhou between January 1, 2014 and December 31, 2015, with a total of 4,175 valid samples.

3.2 Variables and Coding

The main dependent variable of the empirical research in this paper is litigation outcomes, which is used to measure the possibility of protecting the rights of workers (enterprises). The remedies for cases of disciplinary termination of labor contracts are compensation and restoration of labor relations. However, when a worker claims compensation or restoration of labor relations, there are five potential outcomes. The first scenario is that the worker claims compensation or restoration of labor relations, but the court does not support either claim. The second scenario is that the worker claims compensation and the court supports the claim; or the worker claims restoration of labor relations and the court also supports the restoration of labor relations. The third scenario is that the worker claims restoration of labor relations, but the court directly orders the employer to pay compensation. This situation is more common in Shanghai and quite controversial—some people believe it is unfavorable to high-wage workers. In the sample of first-instance cases, there were 27 cases where employees sued for restoration of labor relations or employers sued not to restore labor relations, and the court supported the employees but directly ruled for compensation, accounting for a very small proportion. The fourth scenario is that the worker claims compensation, but the court orders the employer to pay severance pay (the amount of compensation is usually twice the amount of severance pay). This situation mainly exists in courts in Beijing and Guangzhou, with a total of 58 such cases in the two cities. The fifth scenario is that due to legal misunderstanding and other reasons, the worker only claims severance pay (when they are actually entitled to compensation). In such cases, the court respects the worker's wishes, and considering that the amount of severance pay claimed by the worker does not exceed the amount of compensation stipulated by law, it ultimately orders the employer to pay severance pay. There are 359 such cases in total.

The "winning the lawsuit" defined in this paper is in the broadest sense, that is, including the latter four scenarios mentioned above. Regarding the third scenario, due to the limited information provided in the judicial documents, it is impossible to distinguish one by one whether it is unfavorable to workers. In the fourth scenario, in many cases, if strictly in accordance with legal provisions, the burden of proof for the reason for rescission is clearly allocated to the employer, and accordingly, it is determined that the employer fails to provide evidence and shall bear adverse consequences, and the employer is ordered to pay compensation for illegal rescission of the labor contract to the worker, then due to the limited information in the judicial documents, it is also impossible to screen them one by one. Furthermore, the number of these two scenarios is not large. Although only the first-instance cases were counted above, since the second-instance trials uphold the first-instance judgments in most cases, the approximate results can also be inferred, and they account for a small proportion in all samples. Therefore, this paper adopts the broadest definition.

Considering that the situation of enterprises may also have an impact on the outcome of cases, we also retrieved relevant information about the enterprises involved in litigation from the official website of the State Administration of Industry and Commerce, including ownership type (1 = State-owned enterprises; 2 = Private enterprises; 3 = Foreign-invested enterprises), enterprise duration (the number of years from the establishment of the enterprise to the litigation), enterprise registration location (0 = Non-local; 1 = Local), industry sector (0 = Service industry; 1 = Manufacturing industry), etc. Regarding enterprise information, we planned to collect the number of employees to measure enterprise scale; however, since the State Administration of Industry and Commerce does not list the number of employees for all enterprises, this variable can only be regrettably abandoned. In addition, based on case information, we added the following two independent variables: multi-person disputes (indicating that multiple workers are involved in the litigation dispute: 0 = No; 1 = Yes) and labor arbitration outcomes (indicating the result of the pre-litigation arbitration procedure: 0 = Workers lost the arbitration; 1 = Workers won the arbitration).

3.3 Statistical Analysis

Based on the data and variables mentioned above, we conduct a two-step statistical analysis in this paper. Step 1 is to perform a simple correlation analysis on the two variables we are most concerned about, namely city and litigation outcomes (see Table 3). Then Step 2 is, after controlling for many variables listed earlier such as year, trial level, and enterprise ownership, to further examine whether regional factors have a significant impact on litigation outcomes through regression analysis (see Table 4).

From Table 3, it can be seen that the average winning rates of enterprises involved in litigation in Shanghai, Beijing and Guangzhou are 54%, 28% and 38% respectively. The average winning rate of enterprises in Shanghai is the highest, while the average winning rate of workers in Beijing is the highest, with Guangzhou in the middle, and this difference is statistically significant. Then, is this regional difference caused by other factors? From Table 4, it can be seen that after controlling for multiple case variables and party variables, the city variable remains statistically significant. Specifically, for enterprises involved in litigation, their probability of winning the lawsuit in Guangzhou and Beijing is lower than that in Shanghai (and their probability of winning in Beijing is even lower than that in Guangzhou), and this difference still remains statistically significant.

Table 3 Enterprise Win Rates in Different Cities

Table 4 Regression Analysis of Factors Affecting Enterprises' Win Rates

We hypothesized earlier that after controlling for other appropriate variables, with regard to disputes over the disciplinary termination of labor contracts, workers in Beijing are most likely to win the lawsuit, workers in Shanghai are most likely to lose the lawsuit, and workers in Guangzhou are in the middle. The two-step statistical empirical research in this paper has fully verified the above hypothesis. This empirical research based on Beijing, Shanghai and Guangzhou indicates that differences in local legal rules will actually affect the courts' different positions on the protection of rights, and the value preferences of the rules will ultimately be reflected in the preferences in judicial adjudications. In other words, the federal practices of legal rights will actually affect the different protection of rights in different regions.

4.Conclusion

We focus on two questions in this paper and provide corresponding answers. One question is how to theoretically understand such a legal phenomenon with distinct Chinese characteristics: although in terms of legal principle, the central legislative and judicial powers in contemporary China have unmatched dominance over the implementation of laws nationwide, in practice, the importance of local legislative and judicial powers is no less than that of the former. Through sorting out the concepts of Unitary System/Federalism and their similarities and differences, as well as the operational definition of the "autonomy" of local power exercise, we argue that this phenomenon indicates that the vertical allocation and implementation of state power in contemporary China do not actually present a typical unitary state structure, but a state structure characterized by "Unitary System + Federalism". Furthermore, taking the field of labor contract law as an example, through the descriptive analysis of "new and original", "different" and "opposite" local legal rules, we have demonstrated the "Federalism" in the legislation and implementation of labor contract law in contemporary China. The other question is: if the "Federalism" exists, what kind of factual impact will it have on the protection of citizens' rights? Based on the empirical research on the judgments of disputes over the disciplinary termination of labor contracts in three cities, namely Beijing, Shanghai and Guangzhou, we have confirmed the impact of the federal practices of legal power—that is, the different local legal rules in various regions will lead to the differential protection of citizens'/enterprises' rights. In the field of labor contract law, this is specifically reflected in the fact that legal rules favorable to workers (enterprises) will lead to judicial adjudications favorable to workers (enterprises), which is statistically significant.

The research in this paper has potential theoretical significance in at least the following aspects. First, it broadens the methodological perspective for legal scholars to study central-local relations or the form of state structure in contemporary China. As mentioned earlier, the Chinese legal circle almost habitually examines the allocation of state power between the central government and local governments from the perspective of political and legal jurisprudence, and the vast majority of scholars take "Unitary System" as the intellectual premise and conclusion of their discussions. However, as demonstrated in this paper, both a prudent legal dogmatic interpretation and empirical research on central-local relations may lead to different conclusions. Even if we take a step back and adhere to the perspective of political and legal jurisprudence, a longer review of contemporary Chinese history shows that a typical Unitary System is not necessarily the only answer to China’s central-local relations. In fact, on the eve of the founding of the People’s Republic of China, communists did not abandon the idea of implementing Federalism in China. The assertion put forward by Mao Zedong in his article On Ten Major Relationships that "two types of enthusiasm" should be brought into play, as well as the absorption of this assertion in the 1982 Constitution of the People's Republic of China, all mean that the central-local relations in contemporary China should have richer connotations than a mere Unitary System. If we view this from the perspective of China’s several thousand years of national governance history, the contradictory unity and complexity of centralization of power and local decentralization further highlight the narrow-mindedness and laziness of the stance that "Unitary System is the only correct institutional choice". The conclusion of "Unitary System + Federalism" in this paper may not be the most accurate, but it is undoubtedly an effort and attempt. As some scholars have pointed out, the autonomy in the allocation and implementation of local legal power is not the localization or division of China’s national "sovereignty", but the rational allocation of national "governance power" in the context of central-local relations, and there is no harm to national sovereignty.

Second, the empirical research in this paper on whether Federalism practices affect the protection of legal rights helps us better answer the in-depth value question of whether the decentralization of legal power is desirable. Some scholars believe that the existence of Federalism practices can reduce the cost of mutual learning in the construction of the rule of law among different regions. On the contrary, other studies argue that the federalization of legislation or judicature may lead to the negative effect of "race to the bottom" rather than the positive effect of "race to the top". We believe that such discussions are of great significance, but whether their conclusions hold water depends on more factual research to prove the value and drawbacks of decentralization. The research in this paper on the judgments of cases of disciplinary termination of labor contracts in Beijing, Shanghai and Guangzhou provides a model for academic practice.

Finally, this study can help us better understand the development mechanism of labor legal systems from the perspective of central-local relations in the sense of comparative law. Take the United States and Japan as examples. Traditionally, the United States implements the at-will employment system, meaning employers can dismiss employees for any reason (or even no reason at all). Over the past few decades, the U.S. court system has also developed some exceptions to at-will employment—for instance, dismissal decisions cannot violate public policy or the good faith principle of contract law. However, courts in different states have varying degrees of acceptance of these exceptions: some states still maintain the at-will employment principle, some states have added the principle of not violating public policy, and others have added the principle of not violating good faith. Given that differences in local rules bring significant uncertainty to corporate investment, the National Conference of Commissioners on Uniform State Laws (NCCUSL) formulated the Model Employment Termination Act in 1991. To date, however, the effect of this model act being adopted into state legislation by various states has not been significant. One of the reasons for the failure of this Act is that there are differences in views on dismissal protection across regions—the NCCUSL made compromises with various parties during the formulation process, and the result of these compromises was dissatisfaction among all parties. Some states believed the Act conceded too much to employers, while others thought it imposed too many restrictions on employers; therefore, in the end, no state adopted this Act. A couple of years ago, the American Law Institute (ALI) formulated the Restatement of Employment Law, attempting to unify the standards for dismissal protection once again. During the formulation process, however, one of the criticisms the Restatement received was that it was drafted without consensus. Today, although the Restatement of Employment Law has been formulated, whether it will be adopted by courts and whether judges will cite it in specific case rulings remain to be seen. Therefore, from these U.S. experiences, it is very difficult to formulate an act that is accepted by all states when there are differences in economic development and social culture among the states.

Japan is also a Unitary System country in name, but in judicial practice, judges of lower courts in Japan have also created new rules to guide judicial practice. For example, in the field of dismissal protection, initially, according to the Civil Code of Japan, enterprises had the right to dismiss employees at will. To restrict enterprises' dismissal rights, local courts in Japan successively established the "Abuse of Right" doctrine and the "Just Cause" doctrine to restrict employers' dismissal rights. After a period of application, the "Just Cause" doctrine was gradually abandoned by courts, and the Supreme Court of Japan finally established the approach of restricting enterprises' dismissal rights by adopting the "Abuse of Right" doctrine. Although from the perspective of central-local relations, the United States and Japan represent typical Federalism and Unitary System respectively, both countries, like China, see local governments playing a very important role in developing the country's labor legal systems. In this sense, to understand the labor legal systems of large countries, central-local relations seem to be an unavoidable perspective.

Of course, this study also has certain limitations, especially in terms of empirical research. Although the Supreme People's Court of the People's Republic of China requires that judicial documents of local courts should, in principle, be uploaded online, local authorities still cannot ensure the quality and quantity of uploaded judicial documents to this day. For this reason, this paper only compares three cities, Beijing, Shanghai and Guangzhou, resulting in certain limitations in sample representativeness. At the same time, due to inconsistent standards for judgment preparation and inconsistent upload formats across different regions, it was necessary to sacrifice some useful variable information in the empirical research. For example, we could have incorporated information on legal representatives into the model. We speculate that whether a litigation party retains a lawyer may have an impact on the case outcome; however, the lack of lawyer information in many judicial documents prevented us from incorporating this factor into the model. Nevertheless, we believe that the research in this paper has positive reference significance for the theory and practice of central-local relations in contemporary China, the improvement of labor legal systems, the quantitative empirical research on judgments, and even the construction of the rule of law in China.