Salesman demands equal pay for equal work

11 June 2012

Huang Canhui was a salesman for Wang Laoji herbal tea, one of China’s most popular health drinks. However, he did not actually work for the Guangdong company 加多宝 (JDB) that made the product. Huang was instead contracted to a labour agency based in another province entirely.

According to the Labour Contract Law, such agencies are only supposed to fill temporary gaps in staff rosters not full-time positions, but, like many other companies in China, JDB was using the employment agency system as a cheap long-term alternative to hiring full time regular staff.

After making numerous complaints about being cheated out of overtime and the other benefits he would have got as a regular employee, Huang resigned after less than a year on the job and launched a campaign not only to get what he was owed but also to highlight the injustices of the labour agency system that is now so ingrained in China’s workplaces.  He talked to CLB Director Han Dongfang in October 2011 about the inequities of the system at JDB and his efforts to rectify them.

Reputation and reality

Huang Canhui, a graduate from the Wuhan Institute of Industrial Technology, joined the JDB sales team for northern Guangdong in March 2009, soon after the company’s well-publicised 100 million yuan donation for disaster relief following the Sichuan earthquake of 2008. It was a supposedly a boom time for the company. Huang had heard that the company was fairly easy to get into and that it was paying a year-end bonus of up to 8,000 yuan:

I realised it was a pretty prestigious outfit; there was something of the cult about it. Many of us, when we joined, we came in a spirit of reverence and worked with passion, as if that 100 million yuan donation meant we were actually working for the common good. But in fact, on the job, you just got abused.

The work entailed a lot of travel. Working in teams of some 150 per district, they were required to make sales as quickly as possible, on the back of a nationwide poster and exhibition campaign for the drink. “If you could not meet the targets and other benchmarks — not just for sales — they would dock your bonuses,” Huang said.

Huang soon found fellow employees were voicing their discontent about wage cuts and layoffs in online forums like Baidu Tieba. It seemed that JDB had passed the peak of the expansion it enjoyed after the earthquake donation, and now had more salesmen than it needed. In the year that Huang worked at JDB, it turned out that almost the entire sales force of more than 5,000 were hired from employment agencies.

Initially, Huang did not realise that his pay package was significantly inferior to that of regular employees. His main complaint was that overtime pay was being reduced, allegedly because the company was switching over to a “comprehensive working hours system” (综合工时制). Gradually, he began to notice other problems. The basic wage for agency employees, of around 1,000 yuan a month, was at least 50 percent lower than the 1,683 yuan the regulars got. He was also missing out on a wide range of benefits and allowances, such as the accommodation allowance for travelling sales staff. He was likewise cut out of the company’s housing provident fund. Basic social security, medical insurance and work-related injury insurance were all provided, but not at Guangdong’s high rates. Instead, he got the welfare benefits at the rates of the poorer inland province of Jiangxi where the labour agency was headquartered.

Arm’s length employment

Huang’s contract was with Jiangxi Yingtan Bosheng Human Resources Service Co., Ltd. The agency, which has since changed its name to Yingtan Lantuo, was part of a state-owned enterprise ultimately headquartered in neighbouring Zhejiang. When Huang signed his contract, the counterparty was an assistant at the personnel office of Jiangxi Yingtan Bosheng, but he did not sign it in the presence of Huang. Instead a signed copy was given to a JDB employee who presented it to Huang for signature. The Labour Contract Law requires contracts to be signed face-to-face. Huang was not able to study the terms of the contract because it was taken away as soon as his name was on the paper. As a result, he was not even sure who exactly was paying his wages.

Throughout Huang’s time working at JDB in Guangdong, he got Jiangxi welfare-benefit rates and his pay slips were sent to a post office box rather than his workplace in violation of the Labour Contract Law which stipulates that pay for agency workers should be sent to the actual workplace. The most obvious violation however was of Article 66 of the Labour Contract Law, which states that agency workers should work in “temporary, auxiliary or substitute” (临时性、辅助性或者替代性) positions. Huang’s job was none of these — he was effectively a full-time employee at JDB. He was doing the same job as regular employees, but was being treated as a temporary worker.

Huang grew more disenchanted. He was short-changed after working on Saturdays, during the October National Day Holiday in 2009, and then again during the New Year holiday. Huang submitted his resignation in January 2010. The company then gave him an “application form for resignation” which already had the name of the person who was to replace him and take over his sales brief. Once he signed the “application” it was sent to the personnel department at the northern Guangdong sales office. Huang was not given a copy.

Media advocacy

Soon after quitting JDB in January 2010, Huang launched a campaign to expose the exploitation of temporary agency workers at JDB and throughout China. He began with online posts on several forums at the end of February 2010 but soon ran into problems:

I wrote a full account of my complaints, and after a week, everything was removed from Baidu Tieba, and my username was also deleted.  At the end of March, the blog on Sina was blocked; they said that there was no such registered subscriber. As for the stuff on Tianya, the posts I had left there, I was the only one who could read them. They could not be opened by anybody else.

Huang believes he was the victim of PR companies hired by JDB to put pressure on forum administrators to remove negative or harmful comment, a tactic eventually admitted to by a JDB personnel manager. 

Huang then discovered there was a similar problem involving agency hires employed as production line workers at Coca-Cola plants in Guangdong. He drew inspiration from their campaign and set up his own microblog entitled “Wang Laoji JDB Rights Activist” to promote his cause.

I started doing this in March 2010. I wanted to do something before the annual national meeting of parliament in Beijing. It would be the ideal time to get the attention of journalists, get them to look into the question of working conditions of agency employees, and how companies were manipulating the working hours system to avoid paying overtime… I sent a lot of e-mails but I never got a response.

Eventually however the strategy paid off. A reporter from Time Weekly (时代周报) saw his blog and sent him an e-mail. An interview with the influential Southern Weekend (南方周末) followed and China Business ran his story. Then things went quiet for a while until 23 October 2010, when Time Weekly ran an article accusing JDB of carrying out a program of “disguised layoffs.” This was just about the first negative coverage the company had suffered since the earthquake donation.

After that, Huang said, “it was like a chain reaction. I had people asking about the situation every week.” The national Workers’ Daily (工人日报) covered the story and the Beijing Morning Post (北京晨报) ran a series of articles, reporting in one that JDB had wrung nearly 100 million yuan out of its employees by crimping overtime — the same sum as the famous earthquake donation. Twenty-first Century Business Herald (21世纪经济报) and the Legal Daily (法制日报) also covered it. However, media outlets in Guangdong, where JDB was headquartered, were still reluctant to upset the local beverage giant. “Southern Metropolis Daily (南方都市报), New Express (新快报), Guangzhou Daily (广州日报), none of them dared to do the story,” Huang said. The reason was simple: JDB was a major advertiser in Guangdong news organizations.  “Some reporters did actually dare to write about their customer in this way,” Huang said, but the overall media impact in Guangdong was limited.

Legal action

Huang’s campaign also included legal action against both the employment agency and JDB. The case was complicated by the fact that the parties were in different provinces but Huang decided to focus on Guangdong “because it is more enlightened and there’s less resistance there.”

But even in Guangdong there were problems. Although the labour authorities said on their website that they could handle cross-border arbitration cases, when Huang actually approached them, they denied this was so. When Huang tried to show them what was on their own website:

They would not look at it, and just said no such provision existed … A lot of rules and systems are like this, on the website they say they can take things on, but in reality, when you actually go to their offices, they won’t.

Eventually Huang got a hearing with the local labour dispute arbitration committee in Dongguan. He sought a total of 16,500 yuan in unpaid entitlements but the arbitration panel ruled against him, as did the Dongguan No.2 Municipal People’s Court:

They ruled that overtime payments had been made in full, and that JDB had no legal obligation regarding payment of benefits either… In its written statement, the court of first instance acknowledged that working conditions may have been unequal for regular and agency employees, but, taking account of job descriptions and standards, it was inevitable that there would be ‘minor differences among individuals.’

The court refused to acknowledge that JDB had violated Article 66 of the Labour Contract Law by using agency staff as full-time workers, even though this point was raised repeatedly by Huang and his lawyer. Huang filed an appeal at the Dongguan Intermediate People’s Court, the result of which is pending.

The fight continues

Huang found a new job, in poultry marketing, which limits the time he can devote to his campaign but as he pointed out: 

I don’t need to actually appear in court. The angle we are working on now is, if the JDB employee manual is issued to agency employees that would mean the welfare provisions would apply to them in the same way.

Huang conceded that his chances of winning were slim but stressed:

Winning or losing is not so important… After the first session, I got offered a 6,000 yuan settlement, because they saw that I was able to muster a lot of press backing, but that would only have covered my legal costs. I said I was not interested... My main goal is to expose the injustices faced by temporary staff.

Huang explained that he’d had an interest in rights and legal matters since his school days and had actively sought out non-governmental organizations and public interest lawyers to help with his case.

I began dealing with a number of lawyers. As public interest lawyers, they could take on big-name companies. Some of them were thinking of raising their own profiles on the back of such lawsuits.

Without all that help, from public interest lawyers and groups, I could not have been so persistent. Taking legal action in this country really is very difficult… at any time they could demand additional documents, and you have to get countersignatures, and the burden of proof is always on you… You are tormented by it all, until you just do not want to go to court… I get a heavy heart sometimes… procedures were not handled well in the beginning, and when you go to labour arbitration, they do not exactly put on a welcoming face.

In the end however, Huang did get some reward in the sense that legislators are now discussing revisions to the Labour Contact Law that could make it more difficult for employers to flout Article 66. In an attempt to close some of the most obvious loopholes in the current law, the draft revisions seek to provide a clearer definition of the three types of employee positions that can legally be filled by agency staff. According to the new draft, temporary positions cannot exceed six months, auxiliary positions should specifically facilitate or assist the primary business, and substitute positions can only be filled when regular employees take a leave of absence for study, vacation, etc. for a fixed period of time.

The draft also seeks to better regulate the employment agency system by requiring agencies to be licensed by the local labour authorities and by raising the minimum registered capital requirement for such agencies from 500,000 yuan to at least one million yuan.

In addition, the official All-China Federation of Trade Unions argued for a clause that would mandate an employment contract for any agency worker assigned to an enterprise for more than two years continuously.


Han Dongfang's interview with Huang Canhui was first broadcast in eight episodes in October 2011. To read the full Chinese transcript or listen to the audio file of the broadcast please go to the workers’ voices section of our Chinese language website and follow the links.

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