The making of a trade union activist

16 April 2014

Just two months ago, very few people outside of the Walmart store in the central city of Changde had even heard of Huang Xingguo. Today, he is probably the most famous Chinese trade union official both inside the country and overseas. He was the star guest at a recent conference organized by labour academics and activists, and has been profiled by the Financial Times and Reuters.

On 4 April, the Southern Weekend newspaper also ran a long feature documenting Huang’s rise to prominence and analysing the complicated relationship between the workers, the enterprise trade union, the Changde municipal trade union, local government and the employer, Walmart.

The article also described how Huang and his colleagues had to adapt after the Walmart dispute hit the headlines and everyone’s reputation was suddenly on the line. It is one of the most detailed media accounts of the Walmart dispute so far and is indicative of the extent to which the official Chinese media is at now liberty to report on workers’ rights.

China Labour Bulletin has translated the Chinese language original “最牛工会”与沃尔玛的战争 维权VS维稳 by Southern Weekend reporter Liu Zhiyi and intern Zhu Shu in full below.

Battle of “the incredible trade union” against Walmart

Safeguarding rights versus safeguarding stability

On the evening of 31 March 2014, a truck pulled into the delivery depot of the Walmart store in Changde. The employees who had been keeping a close eye on the place quickly gathered, placing two motor scooters in front of the truck in an attempt to prevent it from driving away.

Over the past 26 days, the depot had been the centre of a tug of war between the world’s largest retailer Walmart and its employees who were about to be dismissed due to the closure of the store. Walmart wanted to move the goods; the workers refused to let it happen.

The tug of war started on 5 March. One day earlier, management had suddenly and unilaterally announced that the store would close down. From the next day on, the employees worked every day for 16 hours a day. They even slept together in the supermarket, protecting valuable assets from being taken away by Walmart. They feared that if the store assets were removed before the resolution of the dispute on severance pay, they would lose a major bargaining chip. The depot entrance thus became a key target for both sides, since this was the only place for trucks to come in and out. Even after dozens of police forcibly cleared the supermarket on 21 March, the employees still kept a close eye on the depot.

Huang Xingguo and the Walmart employees in the store’s delivery depot

On the evening of 31 March, while the employees were blocking the truck with the motorcycles, Huang Xingguo was sitting in the nearby Martyrs' Memorial keeping in contact with the employees on site by phone.

Huang is the chairman of the Walmart Changde store trade union. He used to be the vice-chair and was unanimously elected chairman in 2013. After being in office for less than a year, Huang is now leading what is probably China’s first really significant trade union campaign in defence of labour rights in recent decades.  Huang was not present at the scene of conflict for fear that if he was taken away the campaign might lose its legitimacy without a “union leader.”

Be a “true union chairman” for once

It all happened very abruptly. On 5 March, Walmart suddenly announced plans to close down the Changde store and pay off the store’s 135 employees. Walmart set the date of 19 March as the deadline for the employees to accept its settlement plan and prepared for a “communication meeting” in the store.

On March 19, frontline workers were replaced by colleagues from elsewhere. They could no longer access the system with their employee numbers, and a great number of strangers showed up in the store. The employees were jittery and most refused to attend the “communication meeting.”

According to the standard procedure of closing a store, a trade union should be informed one month in advance and hold a meeting to notify the staff.

In the settlement plan released by Walmart, two options were given – reassignment to another store or severance payment. However, the closest store to Changde is located in Yiyang, which is about a hundred kilometres away. Most ordinary employees live in Changde, so the additional cost makes this option unrealistic.

Meanwhile, the severance payment offered by Walmat was (N+1) month’s salary (“N” stands for the number of years of service), but the amount is still in dispute.

Huang had originally intended to accept the company’s offer and take up a position at a Walmart store in Changsha or Yiyang with the same management level and the same pay. It was suggested that he might even be in line for a promotion if he accepted the deal.

However, most employees were never told about the closure plan, and, one day before Walmart formally posted the announcement of closing the store, Huang changed his mind.

“I saw that the employer was too powerful while the employees were way too vulnerable.” he said. One of the supervisors was unwilling to meet and talk (about the settlement plan), but he was spotted by the vice president and chased by three people for a talk. This normally sturdy individual ran to the store’s home appliance section and broke down in tears.

It was then that Huang decided to become a “true union chairman.” At 5.00 pm. on 4 March, he told Walmart that the company’s sudden and unilateral closure announcement violated the union’s right to know about major management decisions one month beforehand. The union committee drew up a list of 15 demands and submitted it to the labour inspectorate, the petitions office and the local police station.

The union also sent a letter asking the Changde Municipal Federation of Trade Unions for help. On the second day, the employees displayed banners on the street stating their demands. Such a campaign pushed Huang and the union committee members towards the edge.

Three points of contention

On the afternoon of 7 March, Changde Municipal Federation of Trade Unions organized a meeting with the store union and Walmart. Local government officials also attended. During the meeting, the demands were narrowed down from the original 15 items to 14 items. However, the last three items remained unresolved.

The employees were most concerned about the fact that the company made every single decision unilaterally. “The employer had no respect for us at all, so we wanted to fight for the respect that we deserved,” said Zhou Zhigang, a former Walmart employee.

The employees could all remember the Walmart slogans they learnt when they joined the company, “Respect for the Individual, Service to our Customers, Striving for Excellence.”  As one female employee said: “I think Walmart has now completely violated its first principle.”

On 20 March, the union made an offer on behalf of the 77 employees who were still holding on to negotiate with the store regarding the three outstanding employee demands. These were: 1) doubling the current amount of compensation; 2) covering the additional living cost of children changing schools, renting accommodation etc. if the employees were to be transferred to another store; 3) paying for the remaining salaries calculated based on the outcome of the 2014 collective wage negotiations.

However, at this point Walmart was determined to close the store at its own pace and was no longer willing to return to the negotiating table.

An official from the Changde Municipal Trade Union, who had attended many meetings, said Walmart would have had to get permission from its US headquarters before agreeing to revise its offer. This would affect the closure policy for all stores and represent a tremendous increase in cost for the company.

Li Chengfang, Walmart’s regional public relations director said in an interview with our reporter from Southern Weekend, “It’s normal to have disputes and arguments. If no agreement can be reached, it is acceptable for us to resort to either labour arbitration or the courts.” He noted that all had gone smoothly while closing down other stores in China, and as such the settlement plan had become routine.

The Changde store union, on the other hand, claimed that Walmart’s practice represented an “economic layoff” and illegal dismissal, and that it should pay double the amount of compensation according to the relevant laws. Whether or not the closure of the store fell into the category of “economic layoffs” had become the focus of dispute.

Chang Kai, the head of the School of Labour and Human Resources at Renmin University, who had participated in the drafting of the Labour Contract Law, was entrusted by the workers and the store union as a legal adviser. Chang argued that that even if there were differences over the interpretation of the law, both sides could still sit down and discuss the issue of compensation. However, because Walmart’s closure procedure violated the Labour Contract Law in that it ignored the existence of its employees and its union, it should take full responsibility for the dispute. In addition, the store flatly turned down the invitation of the Changde Federation of Trade Unions to take part in collective negotiations. Such response was a violation of the Trade Union Law.

Organized by the union, the Changde store employees started to fight back. Meanwhile, the Federation also sent the word – as the “family” of the store union, that it supported the union for its legal campaign but warned that the campaign should not be “expanded and politicized.”

However, the impact of the campaign has already extended beyond China’s borders. UNI Global Union (headquartered in Switzerland) and the American Federation of Labor and Congress of Industrial Organizations (AFL–CIO) announced their support for the demands made by the employees of Walmart’s Changde store and Maanshan store on the 24th and 28th respectively. The Maanshan store was closed last month.

Chang thought the takeaway from the Walmart’s Changde incident was how to put specific procedures stipulated in the Trade Union Law into practice and how to lay down laws and regulations to standardize business closures, employee settlements and workers’ collective actions.

The union’s safeguarding of rights versus the government’s safeguarding of stability

Three years ago, when Huang was getting union training in Hengyang, it would be hard for him to imagine how difficult it would be to be a “true union chairman.”

On 21 March, several police cars and an ambulance pulled up to the store. Dozens of policemen went inside to forcibly clear the supermarket. The employees were forced out of the workplace and two employees were even taken away by the police. One of the detained was released after pointing out that she was pregnant, while a male employee was detained for five days for the “forcible occupation of the Walmart supermarket with others.”

Huang wondered why the government was willing to help the employer forcibly clear the place before negotiating or even before the arbitration process began. Apart from the possible “political factor,” related to a multi-national enterprise, a vice chair of the municipal federation said that sometimes the government “attached too much importance to the employer’s interest” for the sake of economic growth.

Four days before the clearance, the Wuling District Labour Inspectorate issued a statement declaring that Walmart’s proposed settlement plan was legal. When interviewed by Southern Weekend, Mr. Tang, head of the inspectorate, claimed it was not the legal responsibility of the inspectorate to issue a statement, and that such statement was neither a legal document nor an administrative decision, and should not it be quoted in any effective decision making. Nevertheless, in the eyes of Huang and the union committee members, this was precisely what the government based its every action on.

Both the employer and the employees started to speculate on the government’s role and inclination. Someone close to the provincial federation of trade unions remarked that if it were not for the government’s interference, the situation would not have become so complicated. In fact, he said, “more safeguarding led to more instability.”

Huang had to change his strategy as well. At the beginning, he told everything he knew to the press. Later, he started to be concerned about the overwhelming impact of the media coverage. At first, Huang said that he was leading a “group to safeguard rights” but he later asserted that the organization had one voice only, namely “the Walmart union committee.” One of the committee members said in their discussion that if they organized campaigns of safeguarding rights in the name of the union, they would be tying the federation of trade unions to a chariot of war, and this could hold them back for fear of harming others. “If we did it in any other name, our campaign would have been suppressed long ago,” he said.

Huang stressed that he never sent any messages in the name of the union to other countries, and that such messages were only translated and posted by some volunteers online. Originally, he only considered his own idea of safeguarding rights and the relevant laws, but now he also needed to consider whether such campaign would do harm to the “situation of safeguarding stability”. The word “legal” became most commonly used in his interviews with reporters.

Yet the government’s role and inclination still didn’t seem clear. On 31 March, the arbitration application submitted to the municipal labour bureau was returned because of jurisdictional confusion. Huang was told by the bureau to hand in the materials to the district labour bureau. However, the district bureau asked him to send the materials back to the municipal bureau as Walmart was registered at the municipal bureau. Finally, the municipal bureau finally agreed to process the case, but the relevant materials had to be delivered next Thursday. Then, on the evening, the person in charge from the municipal bureau called again and said, “Don’t wait till Thursday. Send the materials tomorrow, as agreed.”

At first, the legal counsel provided by Changde Federation of Trade Unions supported their demands but later said, “there is a slim chance that the demands will be successful but I’m still willing to offer my assistance.”

Such ambiguity made everyone confused. “They are well-intentioned. Everyone is having a hard time,” Huang said. Many former employees were hanging around the site and this gave the committee members pause for thought about who to trust.

Huang held daily meetings and addressed employees from the platform of the delivery depot (see photo below). This stocky Changde native has a thick local accent. He said on 27 March: “You are all united here because you show the power of China’s workers!” He clenched his fist while speaking.

Battle for standardization

As Walmart’s Changde store was about to close down, other big supermarkets in the city were busy hiring the former Walmart employees, but the key committee members never received any phone calls offering them work.

“Don’t screw up your own reputation,” some people warned Huang and his committee members. They were told not to stand up again otherwise “no company will ever hire you.” Huang said that even if they succeeded in this campaign, he would probably have to leave Changde to look for work anyway, “but I think if we stand firm, we have nothing to fear.”

This union committee, nominated and voted by the employees, has now become a business team: some are responsible for dealing with the media and the government; some for maintaining morale; some are responsible for providing real-time updates about their progress on their micro-blog and blog.

Walmart’s Changde employees also paid attention to what was going on in Maanshan and Yancheng because the stores in these places were said to close down. “If we can succeed, then all the stores to be closed down after ours will also follow our lead,” said Mr. Shuai, vice chairman of Walmart’s Changde store union. “This is all the more reason for Walmart to hang on whatever it takes.”

The union committee members of Walmart’s Changde store were afraid that the employer would just keep dragging things out just like it did with the earlier closure of Wuxi store. In that case, the workers ran out of patience and they were forced to accept the settlement plan.

On the evening of March 31, when the two scooters were blocking the truck sent by Walmart, Huang’s phone rang. Mr. Zhang, director of the legal aid department of Changde Federation of Trade Unions told Huang not to stop the truck, or Huang as the union chairman would have to take full responsibility for the consequences.

A few minutes later, the two scooters were removed and a fully loaded truck with a Changsha license plate slowly drove away. No one made any attempt to stop it.

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