Mainland China and Hong Kong sign law which provides for mutual enforcement of judgments in employment matters

On 18 January 2019, the PRC Supreme People's Court and the Government of the Hong Kong Special Administrative Region signed the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region ("Arrangement"). The Arrangement will come into force following completion of implementation steps by both Governments and will apply to judgments made on or after the commencement date.

Building on previous agreements, the Arrangement seeks to establish a more comprehensive mechanism for the recognition and enforcement of judgments in a wider range of civil and commercial matters between Mainland China and Hong Kong. Significantly, from an employment perspective, the Arrangement will facilitate the enforcement of judgments on employment matters between Mainland China and Hong Kong; this was not permitted under previous agreements. 

In addition to expanding the types of judgments which may be enforced, the Arrangement has also removed some of the preconditions to recognition which applied under previous agreements. For example, parties will no longer have to agree an exclusive jurisdiction for resolving a dispute before seeking enforcement of a judgment. Instead, it will be sufficient to show that the court that issued the judgment had a "jurisdictional basis" to do so. This can be established in a number of ways including demonstrating that the defendant has a place of residence or business in the jurisdiction, or that the contract was performed there. The Arrangement also allows the enforcement of non-monetary judgments; this was not permitted under previous agreements.

Although the Arrangement is likely to be welcomed in labour circles on both sides of the border, it does have some limitations. While the Arrangement permits the recognition and enforcement of Hong Kong labour tribunal judgments, it does not provide for the recognition of decisions by the labour arbitration committee which is the first port of call for most labour disputes in Mainland China. In addition, the Arrangement does not permit enforcement of procedural measures such as preservation measures granted in Mainland China and anti-suit or interim injunctions granted in Hong Kong.

Despite the limitations of the Arrangement, it is undoubtedly a step in the right direction. By allowing the enforcement of judgments in employment matters, it will make it easier for employers to enforce their legal rights and protect their businesses. 

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