Bank employee sentenced to re-education through labour after protesting unfair redundancy payouts

19 June 2008

Workers laid-off from state-owned enterprises with inadequate compensation often petition the central government in Beijing in the hope that an “upright official” will intercede on their behalf. However, for the great majority of petitioners the journey to the nation’s capital is a waste of time and money, yielding no positive result. Others are not so lucky. In some cases where petitioners’ activities are seen as a threat to local government or commercial interests, they can be harassed, beaten, arbitrarily detained and sentenced to re-education through labour.

In 2005, the Industrial and Commercial Bank of China (ICBC), one of China’s “Big Four” state-owned banks, underwent restructuring in preparation for listing on the Hong Kong and Shanghai stock exchanges. In the course of restructuring, ICBC management persuaded many employees to terminate their employment contract in return for a one-off payment of about 2,500 yuan for each year of service.

However many bank employees were dissatisfied with their compensation, claiming they had been pressured by management into signing termination agreements. In March 2008, CLB Director Han Dongfang talked to a front desk employee at an ICBC branch in the Guangxi Zhuang Autonomous Region in southwest China about workers’ attempts to seek redress through the petitioning system.

During the restructuring process, the employee said, branch management required bank employees to explicitly state in their buyout contracts that they “voluntarily” agreed to terminate employment. In reality, he said, most of the workers who signed contracts did so reluctantly. The branch eventually reduced its workforce from about 70 to 50, with some employees only two or three years away from retirement age.

“The company didn’t force the workers, but scared them. If you didn’t agree to the buyout, you might be next on the list of layoffs. Those who signed the agreements felt cheated so they petitioned the authorities.”

One of the complaints was that other banks, such as the Agricultural Bank of China and the China Construction Bank, offered payouts of 4,000 yuan for each year of service, while their ICBC branch only offered 2,000 yuan. When the workers took their complaints to Beijing, the employee said, they quickly incurred the wrath of bank officials. “We made a lot of noise. They warned us, if you protest again, you will be arrested.”

Senior management in Beijing told local branch management that they would be sacked if they allowed their employees to petition again in Beijing. “The local branch managers felt they had no choice. They told the law enforcement authorities to arrest the petitioners’ leaders in Beijing. They arrested one female employee who was accused of disrupting social stability.”

He claimed she was sentenced to one year’s re-education through labour, an administrative punishment that does not require the police to go through judicial proceedings.

The employee said the branch did have a trade union but that it was useless, it could not represent the workers and would not dare oppose management. Although the union head was elected by the employees, he lacked any real power. “The union head hasn’t the ability to speak for the workers. He can only handle issues like marriages and deaths. China is like that. Some union heads take orders from the boss and were appointed by the boss.”

Han Dongfang pointed out to the employee that even though the union was under the thumb of management; “You have your responsibilities as a union member. Just because you are a union member, doesn’t mean others will naturally protect you.”

Han explained that a collective labour contract negotiated by the union could help protect workers’ rights at the branch. The employee’s rights in his individual job contract could not be less than the workers’ rights stipulated in the collective contract, he said, adding that collective bargaining would be far more effective in protecting workers rights than individual protests and petitions.


Han Dongfang’s interview with ICBC employee was first broadcast in three episodes in March 2008. To read the full Chinese transcript or listen to the audio file of the broadcast please go the workers’ voices section of our Chinese language website and follow the links.
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