China Labour Bulletin is quoted in the following article. Copyright remains with the original publisher.
Feb 26, 2015
By Stanley Lubman
Labor unrest is on the rise in China and likely to increase as the leadership grapples with a dangerous combination of an economic slowdown and the lack of effective institutions to cope with worker unrest.
A new set of regulations put forward by one province offers a potential solution while at the same time illustrating the difficulty the Communist Party faces in effectively addressing workers’ grievances.
Regulations for “collective contracts” adopted by the Standing Committee of the People’s Congress in southern China’s Guangdong Province took effect on January 1, 2015, giving employees more leeway to initiate collective bargaining with their employers. Observers in the government, chambers of commerce, the state-backed All-China Federation of Trade Unions and workers’ rights organizations will be watching to see whether the new rules represent a meaningful step forward in advancing labor rights.
The need for rules that would allow China’s workers to negotiate better conditions is great. Labor disputes are the most prevalent form of social conflict in the country, according to the Chinese Academy of Social Science’s annual report on social trends. Labor incidents during the fourth quarter of 2014 rose to 569, more than three times the number in the previous year, according to the China Labour Bulletin (CLB), which finds that 87% of workers’ demands are for “wage arrears, pay increases and compensation.”
In 2014, workers went on strike around the country in a range of industries, from manufacturing to teaching to transportation.
The causes of the unrest varied accordingly: In April, for example, the majority of workers at a Taiwanese-owned factory in Guangdong that makes products for Adidas struck to protest the company’s failure to pay its 40,000 workers their full social security and housing allowances. The strike, which cost an estimated $27 million in loses to the factory, drew large numbers of police into the streets. Workers later accused local officials and company executive of using force to get them to return to work, though the government denied any force was used.
In December, thousands of teachers went on strike in six cities or counties in Heilongjiang to protest low salaries and the required contributions to pension plans; in Guangdong, teachers’ strikes protested low monthly salaries that were below what the government had promised.
And earlier this year, taxi drivers walked out in the cities of Nanjing, Chengdu, Shenyang, and Qingdao to protest local government limitations on taxi fares and smartphone apps that allow passengers to negotiate fares.
As the CLB notes, the majority of enterprise trade unions are controlled by and represent the interests of management. ACFTU officials, meanwhile, are “essentially government bureaucrats with little understanding of the needs of workers or how to represent them in negotiations with management.” The state-sanctioned trade union, CLB adds, “still sees itself as bridge or mediator between workers and management rather than as a voice of the workers.”
In recent years, the government emphasized mediation as a way to solve labor disputes and protect social stability, followed by what University of Michigan expert Mary Gallagher has called a “more interventionist stance” that involved government officials helping to settle disputes typically in favor of workers. All the while, Gallagher writes, collective organizations outside the ACFTU have been restricted to prevent any workers’ collective action from growing into “anything long-term, programmatic, or institutional.”
The new regulations adopted in Guangdong increase the pressure on employers by requiring for the first time that they bargain with their employees under what has rightly been called “a more detailed legal framework for orderly collective bargaining by employees.” Employees must initiate negotiations with their employers through the employer’s labor union at the enterprise if one exists, otherwise through the local ACFTU labor union. If more than half of the employees request collective bargaining, the negotiation must proceed. A time table is provided to prevent delaying tactics by employers.
The issues that may be negotiated include not only pay, but working hours, labor production quotas, occupational safety and health, insurance and welfare, special protection for female employees and minors between 16 and 18, and “other negotiable matters agreed by the parties.”
The new rules have not been welcomed by employers, which strongly opposed them. Still, a previous draft of the new rules was watered down by removing provisions that would have imposed fines for resisting workers’ attempts to bargain collectively and prohibited firing workers who stopped work to protest an employer’s refusal to negotiate. The earlier draft also sought to allow only one-third of employees to agree to proceed with negotiations, instead of a majority.
Crucially, the regulations do not reduce the position of ACFTU unions, which remain the mandatory channels that workers must use to begin the process of consultation. As The Economist magazine recently argued, “Guangdong’s aim is not to embolden workers, but to keep their grievances from erupting into open protest against the government.”
Finding ways to reduce social unrest by improving labor relations will continue to challenge China’s rulers. Recent strikes—and the new regulations — suggest that nation-wide, China must give workers more voice in the governance of relations with their employers.