AP: Report: China, Hong Kong businesses blocking labour reforms

China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.

13 October 2010
By Elaine Kurtenbach, The Associated Press

SHANGHAI - Powerful business interests in China and Hong Kong have effectively blocked recent labour reforms, raising the likelihood of further bouts of wildcat strikes and other unrest, a report said Wednesday.

The China Labour Bulletin, a Hong Kong-based group that monitors labour conditions in China, said Hong Kong business leaders recently helped block proposed legislation in neighbouring Guangdong province that would have enabled workers to initiate and join in collective bargaining with management.

It said the draft rules were a belated attempt by provincial leaders to rebalance labour relations strongly dominated by employers, usually in alliance with local governments, following a spate of strikes and other labour actions last summer.

"The government is increasingly anxious to forestall further social unrest by establishing a mechanism that can help resolve labour conflicts peacefully within enterprises, without the need for costly government intervention," said the report, titled "Swimming Against the Tide: A short history of labour conflicts in China and the government's attempts to control it."

China outlaws labour organizing outside of the state-affiliated All China Federation of Trade Unions, whose representatives lack authority and often are seen as allies of management rather than workers.

The strikes last summer, often in factories supplying Japanese automakers, came as younger workers protesting poor conditions and low pay clashed with employers that often are struggling in a post-financial crisis era of rising costs and shrinking profit margins.

Though the conflicts were mostly resolved peacefully through negotiations, often after companies agreed to ad-hoc wage concessions, China has failed to effectively enforce labour reforms such as the 2008 Labor Contract Law, or to establish a system that lets workers have a real say over their working conditions, the report said.

The reforms proposed in Guangdong, one of China's main export manufacturing hubs, aimed to defuse mounting tensions due to the imbalance in power between employers and workers, who lack any effective collective representation.

This is "not because the government has suddenly become pro-labour but rather because such moves are now more in line with its overall objectives of sustainable economic development and social stability," it said.

Despite cradle-to-grave protections in earlier decades, employers gained the upper hand as companies restructured in the 1990s, laying off tens of millions of workers. While big multinational companies tend to comply with labour regulations, abuses are common at China's tens of thousands of smaller manufacturers, both foreign and locally invested.

Although overall wages are rising quickly, the lack of protections allows companies to get away with withholding pay and forcing workers to put up with excessive, illegal overtime and hazardous conditions, the report said.

Although the Labor Contract Law took effect in early 2008, as of early this year fewer than half of all migrant workers still had not signed contracts, the report said. In many cases, those who did sign contracts were required to put their names on blank contracts to be filled in later by their employers.
The law "has failed to significantly improve pay and working conditions for those at the lowest end of the pay scale," it said.

The report urges the government to reduce fees, bribes and excessive taxes that put added pressure on companies to cheat their employees, and to allow workers to engage in collective bargaining.
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