Labour relations FAQ

What rights do China’s workers have under the law?

China has a comprehensive legal framework that gives workers a range of entitlements and protects them from exploitation by their employer. Workers have the right to be paid in full and on time, a formal employment contract, a 40-hour working week with fixed overtime rates, social insurance covering pensions, healthcare, unemployment, work injuries and maternity leave, severance pay in the event of contract termination, equal pay for equal work, and protection against workplace discrimination. Workers also have the right to form an enterprise trade union (see below for more details), and the enterprise union committee has to be consulted by management before any major changes to workers’ pay and conditions. Since China’s economic slowdown in the mid-2010s, however, there has been little new legislation to bolster workers’ rights and senior government officials are now openly discussing rolling back some existing protections in a bid to create a more pro-business legal environment.

A list of major Chinese laws and regulations on labour relations

 

How is the law enforced?

Local governments in China are responsible for enforcing labour law and ensuring that workers’ rights are protected. However, the local labour authorities are generally under-funded and under-staffed and lack the ability and the will to enforce the law.  Local governments have generally been more concerned with boosting the local economy and creating a business-friendly environment than in protecting workers’ rights. During the reform era in China, it could be argued that the government gradually abdicated its power in labour relations to business owners, giving employers the ability to dictate the pay and working conditions of their employees. As such, it has largely been up to the workers themselves to ensure that labour law is enforced by taking collective action to demand that wages and overtime are paid in full, proper contracts are signed, social insurance contributions are paid in full and that compensation is paid in the event of injury or contract termination.

 

Coal miners in the north-eastern city of Shuangyashan stage mass protest on 9 March 2016 to demand payment of wages in arrears

Do workers in China have the right to strike?

The right to strike was removed from the Constitution in 1982 as part of the “modernizing” reforms of then leader Deng Xiaoping. However, there is no legal prohibition on workers taking strike action. In fact, workers often have no option but to go on strike if they are to get their employer to listen to their demands. China Labour Bulletin’s Strike Map shows that strikes and other forms of collective protests are commonplace across the whole of China and in all sectors of industry. Occasionally, workers will be arrested after taking part in strike action but if they are charged at all, it will be with public order offences such as “gathering a crowd to disturb social order” rather than with taking part in a strike per se. A more common form of retribution is for strike leaders to be sacked by management either during the strike or a few months afterwards, in a process known in China as “settling scores after the harvest is gathered” (秋后算帐).

 

Do workers in China have freedom of association?

No. There is only one legally-mandated trade union, namely the All-China Federation of Trade Unions (ACFTU). All enterprise trade unions have to be affiliated to the ACFTU via a hierarchical network of local and regional union federations. (See simplified organizational chart right). The ACFTU is primarily under the control and direction of the Chinese Communist Party. Any attempt to establish an independent trade union movement is seen by the Party as political threat. The only time in the history of the People’s Republic of China that an independent union was established was the short-lived Beijing Workers’ Autonomous Federation in 1989. The BWAF was declared an illegal organization and disbanded in the wake of the military crackdown in Beijing on 4 June 1989.

 

What does the ACFTU do?

The ACFTU is the world’s largest trade union, with around 288 million members in 2.78 million grassroots trade unions, according to official figures. In reality, the vast majority of union members either do not know that they are union members or have little faith in the ability of the union to represent their interests. The majority of enterprise trade unions are controlled by management and represent the interests of management. Only very occasionally will an enterprise trade union actually support workers against management, as was the case at the Walmart store in the central city of Changde in April 2014. There are reportedly more than one million full-time trade union officials employed in various federation offices across China. They are essentially government bureaucrats with little understanding of the needs of workers or how to represent them in negotiations with management. The ACFTU sees itself primarily as bridge or mediator between workers and management rather than as a voice of the workers.

 

Worker representatives during a bargaining session with management at Hietech Precision Industry Co. in Shenzhen: May 2016

Is there collective bargaining in China?

Collective bargaining in China is at an embryonic stage. There is no formal mechanism for collective bargaining and since the trade union is currently unable to represent the workers in bargaining, the workers have been forced to take matters into their own hands. Collective bargaining usually only occurs after workers have gone out on strike. Workers, particularly factory workers in Guangdong, are often willing to elect their bargaining representatives and put sustained pressure on management to come to the negotiating table. In many cases, management will agree to make some concessions to workers’ demands, usually just enough to get them to call off their strike action. Once the dispute has been resolved however, there is rarely any follow up action and much of the solidarity generated by the strike tends to dissipate.

 

Is there a minimum wage in China?

There is both an hourly and a monthly minimum wage in China. Minimum wage rates are determined by regional governments, based on local living costs, local wages and the overall supply and demand for labour. As a result, there is considerable variation in minimum wage levels in major cities and poorer rural areas. The highest monthly minimum wage in June 2016 was in Shanghai (2,190 yuan), which was more than double the minimum wage in smaller cities in Guangxi or Heilongjiang (see chart below). The minimum wage is usually adjusted every two years, although local governments are not legally required to do so. Indeed, the provincial government of Guangdong decided in 2016 to freeze its minimum wage for two years in a bid to slow the outflow of business from the region.

 

 

Is the minimum wage a living wage?

National government guidelines stipulate that the minimum wage should be at least 40 percent of the local average wage. In reality, the minimum wage is usually only between 20 and 35 percent of the average wage, barely enough to cover accommodation, transport and food costs. Workers on the minimum wage, including most production line workers, unskilled labourers, shop workers etc. have to rely on overtime, bonuses and subsidies in order to make a living wage. As a consequence, if the employer cancels or reduces overtime, bonuses and other benefits, low paid workers will often demand immediate restoration. Likewise, workers on the minimum wage are determined to ensure that every last cent of what they are owed is paid in full if and when they are laid off.

 

What is the role of the courts in resolving labour disputes?

China has a four-stage process designed to resolve disputes between employees and their employer: consultation, mediation, arbitration and litigation. The key institution in this process is the local labour dispute arbitration committee (LDAC) which adjudicates in the majority of routine labour disputes in China. Minor cases might also be handled by the labour and social security inspectorate. In 2014, LDACs settled 711,004 cases, while the labour inspectorate settled 406,210 cases, according to official figures. Generally speaking, workers can only take their grievance to the civil court after the LDAC has made a ruling. If a court does accept a labour dispute case, it will be handled in accordance with civil procedures. However, courts in China (like the LDACs) increasingly seek to resolve disputes through mediation rather than formal judgements and this can adversely affect workers’ rights. Moreover, courts and LDACs are reluctant to take on collective cases and often break them down into individual plaintiffs.  See China’s labour dispute resolution system for more details.

 

How do local governments respond to labour conflict?

Local Communist Party and government officials are routinely assessed by their superiors on their ability to ensure economic growth and maintain social stability. As such, their primary concern when confronted by a labour dispute is to make it go away as quickly as possible. Local officials will often put pressure on both workers and management to reach a mutually acceptable compromise deal and get striking workers back to work. However these quick fixes rarely address the underlying causes of the dispute, and as a result it is not unusual for another strike to break out six months or a year later. It is quite common for police to be dispatched to the scene of a strike but their primary role in these situations is one of containment, ensuring that the protesters do not leave the factory compound or in any other way disrupt public order. If workers are detained by police, in most cases they are released within a few hours or a few days at the most.

 

Civil society labour activist Zhu Xiaomei addresses workers during the Lide shoe factory dispute in 2015

What is the role of civil society in supporting the workers’ movement?

There are dozens of civil society organizations in China that actively support workers in their demands for better pay and working conditions. Some of the most experienced and forward-thinking organizations are in the southern province of Guangdong, China’s manufacturing heartland. These organizations have taken the lead in helping workers formulate their demands, elect bargaining representatives, come up with a bargaining strategy and maintain solidarity among the workforce. They also help workers utilize the increasingly powerful tools provided by social media to put pressure on trade union officials in the region to support workers’ legitimate demands. In December 2015 however the authorities closed down one of the most prominent groups, the Panyu Workers Centre, and arrested its staff members in a co-ordinated crackdown on civil society labour groups in the region. The centre’s director Zeng Feiyang and three other staff members were charged with “gathering a crowd to disturb social order” for their involvement in a strike at a local shoe factory (see photo above).

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