Are trade union and labour officials in Guangdong beginning to take their responsibilities seriously?

Encouragingly, trade union and government officials in the province have responded forcefully to this threat by pointing out that wages in Guangzhou have failed to keep up with inflation and the overall growth rate of industrial output (see Table1) and actually need to be increased further. Officials have, in addition, vowed that employers who default on wage payments to migrant workers will be pursued and punished. On 18 February, Liu Xiaogang, the chairman of the Guangzhou Federation of Trade Unions, stated that wages should be adjusted inline the local consumer price index, while Liu Youjun, the Party head of the Guangdong department of labour and social security, claimed on 15 January that the authorities had arrested 29 employers wanted for defaulting on wages due to migrant workers in the province over the previous 20 months.

Does this mean that Guangdong’s trade union and labour officials are now determined to take their responsibilities seriously, and defend the rights and interests of workers in the province? Crucially, Guangdong union officials have now acknowledged that the most effective way to protect wage levels and ensure regular payment is through direct negotiations between labour and management. Liu Xiaogang told a meeting of Guangzhou People’s Congress in February that the only way to ensure employees earned a decent wage was to change the “unilateral decision-making system of the enterprise” to “a system of consultation and common resolution between enterprise and employees.”

Liu was quoted by the Information Times (Zixun Shibao) as saying the establishment of an open and equal negotiation system and the signing of wage agreements between enterprise representatives and workers’ (trade union) representatives would be conducive for normal wage growth in a market economy.

The legislative and policy framework for negotiating collective wage agreements has been in place in China since the mid-1990s, however, because of the lack of genuine worker participation in the contract negotiations, these wage agreements have brought only limited benefit to China’s workers. The shortcomings of the current “equal consultation and collective contracts system,” as is known, have been pointed out by academics and labour rights groups in China for many years, and now some trade union officials are finally beginning to take note.

In December 2007, the Shenzhen Federation of Trade Unions (SFTU) co-hosted with the Shenzhen Lawyer’s Association, a Forum on Collective Bargaining and Corporate Social Responsibility. According to a report in the Southern Metropolis Daily (Nanfang Dushi Bao), the conference heard that: “Most collective labour contracts are not worth the paper they’re written on, and that trade unions’ negotiating and bargaining capacity must be strengthened.”

The SFTU agreed to host the conference after being given a wake-up call eight months earlier by the crane operators’ strike at the Yantian International Container Terminal in Shenzhen. The strikers themselves organized a delegation to engage in collective bargaining with management and successfully negotiated a settlement that significantly increased wages and benefits and ended the strike. The Yantian strike showed how direct collective bargaining between representatives of management and labour could effectively and rapidly resolve disputes, while the collective consultation system remained largely ineffectual.

Conference delegates agreed that collective bargaining was clearly the way forward but admitted that because of the gross imbalance of power between labour and management the vast majority of Chinese enterprises, it would be difficult to kick-start the process. Professor Shen Mingming of Beijing University, was quoted by the Southern Metropolis Daily saying that, although the new Labour Contract Law gave collective labour contracts some binding authority, “few trade unions have a real bargaining capacity, workers clearly lack bargaining skills and experience, and over the years all sorts of employers have got used to dealing with workers who are submissive and resigned to poor working conditions. In the near future it’s going be difficult to get them to sit around a table with workers, engage in collective negotiations and sign collective labour contracts with them.”

For collective bargaining to get started in China, local level trade union officials can not simply talk about collective bargaining, they have to act on their words. There is little point drafting well-intentioned laws and policy statements if those initiatives are not acted upon. Indeed, the current legislative framework is more than sufficient for the development of collective bargaining in China.

The biggest obstacle to collective bargaining is not the lack of legislation but the inability of the official trade union to act as proper representative trade union. The vast majority of “trade unions” in enterprises are controlled by management. They do not speak for workers and do not even listen to the higher-level unions that are supposed to supervise them. In this regard, as the Yantian strike has shown, the All-China Federation of Trade Unions (ACFTU) will have to learn from the workers themselves how to conduct genuine collective bargaining. The ACFTU should encourage and give its full backing to pilot projects in factories across China so that not only workers gain experience in collective bargaining but the ACFTU itself becomes more familiar with and accepting of the concept.

The actions of trade union officials in Guangdong this year, and over the coming years, will provide the answer to the question of whether or not they are serious about defending and promoting workers rights. As CLB director Han Dongfang has pointed out, “by developing collective bargaining at the grassroots level, enterprise-level unions will be transformed into labour organizations that genuinely represent the rights and interests of workers and once again become a functioning part of the ACFTU. In short, a collective bargaining system can fundamentally protect workers’ rights and provide the ACFTU with an excellent opportunity to rebuild itself as a genuinely representative trade union.”

Industrial output and wage growth in Guangzhou (percentage increase)