A Wal-Mart store in East China's Zhejiang Province that has been closed in April Photo: CFP

Former employees are preparing to sue Wal-Mart in China after an arbitration committee rejected their case for better compensation than what the company had offered after closing the store where they worked in Central China's Hunan Province.

Dozens of workers challenged the way that Wal-Mart Stores Inc closed the underperforming store in Changde in March and began negotiations for better compensation before turning to arbitration.

An arbitration committee heard the case over a two-day period late last month and issued its decision on Wednesday turning down the workers' arbitration requests.

Meanwhile, Changde's neighborhood committees - grass-roots arms of the government - have pressured the workers to accept an offer from Wal-Mart of 3,000 yuan ($480) each and end the dispute, workers said.

Huang Xingguo, the store's union boss who has been leading the challenge, said on Thursday that most had come around to accepting the deal and only 18 remained to continue the fight. "It doesn't matter, though. The law won't change because the number of people goes up or down," he said.

Wal-Mart closed the Changde store as part of plans to restructure in China. It said in October it planned to shut 15-30 China stores through 2016 while opening up to 110 and creating nearly 19,000 jobs as part of efforts to revitalize its business.

Employees say they were not given proper notice or compensation when the company decided to close the Changde store.

A Wal-Mart spokesman has said the company was fully compliant with the law and had the support of the local government.

The workers had 15 days from the date of the arbitration decision to file suit.