SCMP: Guangdong collective bargaining proposal seen as bellwether for China

09 July 2014

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

Mimi Lau

6 July 2014

In August, 49-year-old Meng Han and 11 other hospital security guards unfurled large banners and climbed atop the roof of a three-storey outpatient clinic in a Guangzhou hospital, pleading for the management to negotiate an equal pay package.

But the drastic protest against the First Affiliated Hospital of Guangzhou University of Chinese Medicine in the city's Baiyun district proved a failure. The security guards were arrested and convicted by the local district court of illegally gathering and disturbing the social order.

Meng and his fellow demonstrators were jailed for up to nine months. The 49-year-old was released last month and is currently unemployed.

Meng said he had no choice: he'd been hired by an agency to work as a contract guard in the hospital. Unlike other security guards, he was paid just 1,100 yuan [HK$1,400] a month when he started in 2010, about 1,200 yuan less than those hired directly by the hospital. The hospital contributed to his social insurance plan, but some 400 yuan less than other guards, he said. "It is unfair because we were doing the same work but paid differently." Meng said.

For years he petitioned hospital management for equal wages and benefits, but without success. Meng said he would have benefited from a proposed regulation by Guangdong's provincial government that would establish collective labour bargaining.

The proposed Regulations on Enterprise Collective Consultations and Collective Contracts, first introduced by a trade union, would give workers the right to demand meetings with employers to negotiate for better wages and benefits.

A final review of the rule is scheduled for this month. Academics and labour activists say it would largely end the bitter and lengthy labour fights that many say have hurt Guangdong's economy, and that it would advance labour rights throughout China. In the spring, as many as 40,000 workers laid down their tools at Yue Yuen Industrial Holdings' shoemaking factories in Dongguan for nearly two weeks, the biggest strike in modern China's history.

"This is not just an ordinary rule, but one that would have a far reaching impact on over 30 million migrant workers in Guangdong. If this gets passed, the rest of the nation is likely to follow," says Professor Pun Ngai, a labour rights expert at Hong Kong Polytechnic University.

But the proposal's passage is far from assured. Hong Kong industrialists bitterly oppose it, saying their businesses are already struggling to survive in Guangdong, which has seen a sharp downturn in foreign orders since the global financial crisis began in 2008.

Stanley Lau Chin-ho, chairman of the Federation of Hong Kong Industries (FHKI), said the proposed legislation would deeply hurt the interests of an estimated 40,000 Hong Kong businesses there. In April, chambers of commerce in Hong Kong asked Guangdong's government to delay passage, according to the China Labour Bulletin, a Hong Kong-based labour rights group.

"If these rules could have been implemented earlier, I wouldn't have jumped up on the clinic rooftop threatening to kill myself just for a chance to negotiate my rights," Meng said.

Guangdong is one of the most prosperous provinces in southern China, with a gross domestic product of 6.2 trillion yuan last year, fuelled by more than 30 million workers who migrated there from elsewhere in China.

But according to a survey released in April by the Federation of Hong Kong Industries, businesses in the Pearl River Delta face tough challenges. They said production costs were rising by an average of 12 per cent this year over last, while labour costs increased by more than 10 per cent.

About 80 per cent of Hong Kong businesses in Guangdong said manpower was about 12 per cent short of their needs.

Over two decades, Guangdong has boosted China's economic rise. But tensions among workers and their employers has increased since 2008, when a new generation who were more aware of their rights flocked to the province for work as mainland inflation began to soar. Many workers began to feel they were being shut out of the nation's powerful growth.

The strike in April compelled Yue Yuen, a Taiwanese footwear giant, to reimburse workers after shortchanging many of them on their social insurance. The strike cost the company 167 million yuan.

With tensions rising, the Guangdong Federation of Trade Unions proposed the draft rules, first made public in March. The federation declined a request for an interview.

"This bill is about setting a protocol for collective negotiation, which would provide a channel for workers to resolve issues with employers before taking industrial action," said Zeng Feiyang , director of the Guangdong Panyu Migrant Worker Centre in Guangzhou. "It would lower the rate of strikes and [be] win-win for all, including the government, [producing] a less turbulent society."

The proposed rules would require employers to negotiate with workers under their collective contract - covering wages, work hours, rest days, workload, occupational safety, health and legal protections - provided that one third of employees submitted a written request. Employers would have 30 days to respond.

The current draft rules say employers could not terminate labour contracts should workers decide to strike or stall production if they do not get a timely response to their request. Workers would not be allowed to strike during ongoing negotiations. Employers could be held criminally liable if they refused to negotiate.

Soon after the first draft of the regulations went to the provincial legislative body in April, six major associations representing Hong Kong businesses issued a strongly worded letter opposing the bill.

On May 15, the Hong Kong Business Community Joint Conference, representing 59 commerce bodies, took out a full-page advertisement in a local Chinese-language newspaper urging the Guangdong authorities to shelve the bill.

In the ad, the business leaders said they were extremely anxious over the proposed regulations, which they said would intensify labour disputes, stall enterprise development and quickly force the closure of their struggling businesses on the mainland.

"We have expressed our concerns and we were promised a new version of the legislation every time we met" the bill's authors, said Lau, of the FHKI. "But from what we have seen so far, there have not been many changes. We are still very concerned, so we asked for the bill to be halted, but they said they would study this with Guangdong authorities."

The proposed rules would harm business interests if owners were forced to disclose operating details, including client orders, to workers in the midst of collective negotiations, he said.

"We fear workers would be mobilised by lawyers to abuse the rule to drum up more labour disputes" with ulterior motives, Lau said.

It's not the first time Hong Kong industrialists have opposed labour rights legislation. In 2007, there was intense debate over the Labour Contract Law, which went into effect in 2008.

"If collective consultation gets to be blocked again, we will miss another opportunity to properly handle labour disputes," said Pun, the PolyU labour rights expert.

Zeng, of the migrant worker centre, said workers had shown that the rules were necessary. "If the legislation is being blocked, there will only be more strikes," he said.

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