Labor law strengthens Chinese
union By Han Dongfang
From a legal standpoint, the protection of
workers' rights in China is systematically
improving, with the government adding another
major component, the Labor Contract Law, to its
already substantial canon of labor legislation at
the start of the year.
Since the
promulgation of the Trade Union Law in 1992 and
Labor Law in 1994, the government has regularly
introduced new legislation and regulations
designed to protect the rights and interests of
workers.
However, while the interests of
workers are increasingly enshrined in law, their
rights on the factory floor remain precarious and are
routinely ignored or violated
by management. The cause of this apparent
contradiction is not hard to find: put simply,
workers in China still do not have the right to
collective bargaining.
There is a labor
union in China, the All China Federation of Trade
Unions (ACFTU), which could potentially represent
workers in collective bargaining with management.
The ACFTU, however, is first and foremost a
servant of the Chinese Communist Party (CCP) and
therefore an instrument of the party-state -
representing labor and protecting workers’ rights
is secondary.
ACFTU chairman Wang Zhaoguo
freely admitted in a speech in December 2006 that
China's unions "cannot blindly copy union models
in Western countries". The ACFTU sees itself as a
"bridge" between labor and management, not merely
as an advocate for labor. As such, it does not
actively defend workers' interests in negotiations
with management but seeks to facilitate a
compromise between the two sides.
The
ACFTU's approach may seem attractive on paper, but
in reality it has categorically failed to protect
workers' rights and interests. Take the minimum
wage for example. Because there is no freedom of
association or genuine collective bargaining in
China, employers can get away with paying the
minimum wage to all employees regardless of the
profits they make or the productivity of the
workers.
Indeed, in the vast majority of
enterprises across China today the minimum wage
mandated by law has become the basic flat wage
paid by employers by default. In other words, the
minimum wage regulations designed to protect
workers' interests have become the legal
foundation of management's exploitation of labor.
China's Trade Union Law mandates the ACFTU
to represent workers' interests in wage
negotiations. Since, however, in the majority of
enterprises, ACFTU branch union officials are
appointed by or in some other way beholden to
management, they would not dare raise an effective
challenge to management on behalf of the
employees. There is a mechanism - the "collective
consultation and collective contracts system" -
developed by the government and ACFTU over the
past two decades, through which workers' demands
for higher wages can in theory be discussed.
Yet because there is no genuine collective
bargaining between labor and management, most of
the collective contracts that the ACFTU has
announced do not represent the workers but are
rather the results of a "collective contracts
production line". These mass-produced contracts
are typically copied from the provisions of
relevant labor laws and regulations and are of
little or no help to workers on the factory floor.
There are also strict rules and
regulations covering work hours and overtime.
However, because of the excessively low wages paid
by employers, workers very often cannot earn a
living wage by working eight hours a day. Because
they cannot bargain collectively, individual
employees will certainly not dare to ask for a pay
rise on their own. Their only option is to ask to
work longer hours. In the majority of incidents
where employees work long hours, it is because
they requested it, and as such, the labor bureaus
- who are supposed to monitor breaches of work
hour regulations - are powerless to intervene.
The Labor Contract Law has numerous
provisions designed to protect workers' rights and
enhance job security. One key provision is that
workers who have been employed at the same
enterprise for 10 years or more will be legally
entitled to an "unlimited" labor contract, which
should guarantee them adequate financial
compensation should they be made redundant.
Many employers have panicked on learning
of this provision and urged, bribed or coerced
long-serving employees to take early retirement or
voluntary redundancy. The most noted example of
this tactic was the move by Huawei - the former
state-owned enterprise and now privately owned
telecommunications conglomerate based in Shenzhen
- to persuade about 7,000 employees who had been
with the company for more than eight years to
resign. In return, the employees received a lump
sum of one month’s salary for every year of
employment, plus one additional month’s salary,
and were allowed to rejoin the company on a
short-term contract.
Huawei's reaction to
the new legislation was rational in a system where
laws are largely theoretical and all the power
inside enterprises resides with management.
China's numerous labor laws are like swords
suspended above the heads of factory owners and
managers. They can all see the swords but none of
them can really be sure what will happen if one
falls.
Huawei's management could not be
sure if the Labor Contract Law would hurt them or
not, and so they did everything in their power to
minimize the potential damage. Management had the
power to persuade long-serving employees to give
up their contracts, so it did. Yet again, a new
law - intended to protect workers - instead led to
the violation of workers' rights.
The
Huawei case begs the question: do the workers
really want long-term contracts or is this just
something that legislators and concerned academics
think they want or should have? In the Huawei
case, if the workers had the right to free
collective bargaining, this situation would not
have arisen. Even without a new law requiring
employers to give employees unlimited contracts,
workers and management could have sat down
together as equal partners, raised their concerns,
made their demands and ironed out their
differences at the bargaining table.
If
the employees wanted unlimited contracts, their
representatives would be empowered to negotiate a
deal with management on the issue. If workers did
not consider unlimited contracts to be of great
importance, they would not place it on the
negotiating table.
With a collective
bargaining system in place, workers would no
longer walk into the "dead end" of rights
protection that exists at present. Workers and
employers would in addition both be able to
improve their "fire prevention" work. An effective
collective bargaining system would lessen the risk
of labor disputes igniting into conflagration and
allow both labor and management to focus on
prevention, rather than trying to put the blaze
out after it had already erupted and most likely
caused irreparable damage.
China Labor
Bulletin has closely monitored the workers'
movement in China over the past decade and has
repeatedly noticed labor disputes that could have
been prevented or resolved through a system of
collective bargaining escalate into strikes,
public protests and demonstrations simply because
the workers had no other outlet.
Over the
last few years, disputes over the non-payment of
wages, low wages, forced overtime for little or no
additional pay, unsafe working conditions and the
lack of benefits, have all developed into mass
protests. As a result, what should have been a
simple matter between labor and management became
a complex and very costly public matter.
Had an effective collective bargaining
system been in place, the dispute would most
likely have been resolved within the enterprise
and the local government could have avoided
expending its time and resources on trying to
bring about a peaceful end to a dispute that had
already gotten out of hand.
In terms of
developing a collective bargaining system, the new
Labor Contract Law comes at a good time and
occupies a favorable position in China's
legislative landscape. It is a propitious time
because both those in the central government in
Beijing and ordinary workers across China now
agree that - after three decades of accumulated
tension between labor and management - something
has to be done.
If the situation continues
in which management routinely exploits labor and
violates workers' rights with impunity, workers,
as in the past, will increasingly resort to
protest and even violence in order to seek
redress, and this will benefit no one.
The
law occupies a good position because it
effectively builds on China's existing foundation
of labor legislation and regulation. In
particular, the Labor Contract Law stipulates that
it is the employer's responsibility to sign a
collective labor contract with the employees'
representative. If the ACFTU and its branch unions
can grasp the opportunity presented by the law, it
is probable that after a couple of years of
finding their way and gaining experience in
negotiations with management, the creation of a
genuine and effective collective bargaining system
in China will no longer be a problem for the
unions.
The big push for collective
bargaining should come from grass-roots unions.
Right now, the vast majority of the so-called
"unions" at the enterprise level are controlled by
management - they do not speak for the workers nor
do they really listen to the higher-level unions
that are supposed to supervise them. If the
workers, however, can democratically elect their
own union leaders, and those leaders can
effectively represent the employees in
negotiations with management, the union will not
only gain credibility and the trust of the
workers, it will be much more willing to listen to
and benefit from the expertise and skills offered
by the higher-level unions in terms of organizing
and negotiating with management.
Thus, by
developing collective bargaining at the grassroots
level, the enterprise-level unions will both be
transformed into a representative labor
organization and once again become a functioning
part of the ACFTU. In short, therefore, a
collective bargaining system can, at the
fundamental level, both protect workers' rights
and provide the ACFTU with an excellent
opportunity to rebuild itself as a genuinely
representative trade union.
Han
Dongfang is the founder and director of China
Labor Bulletin, a non-governmental organization
based in Hong Kong that seeks to promote workers'
rights in mainland China.
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