The Collaborative governance among Government, Society and Enterprises in Alleviating Labor Disputes in Transitional China

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1 The Collaborative governance among Government, Society and Enterprises in Alleviating Labor Disputes in Transitional China Hongna Miao Assistant Professor School of Government, Nanjing University Abstract The economic market-oriented reform in China from the end of 1970s has brought in the massive layoffs of state-owned enterprises workers, which exerted pressure on social harmony and stability. But the Chinese dual-transition is peaceful overall from most scholars perspective. This empirical study focuses on industrial conflict governance, and discusses the roles that government, society and enterprises played in safeguarding labors rights and interest and alleviating industrial conflict. Among others, government and enterprises provide workers financial compensation and conflict resolution mechanism by a substantial number of laws, regulations and rules in industrial area; mass media come into a vital supervisory role in this process; the new social organizations stand by the workers rights protection activity; and the street-level law-enforcement officers mitigate the sharp economic conflict between labor and capital via the humanized factors in the process of institutions carryout and disputes mediation. The last but not the least, the social network rendered the economic and feeling support and guarantee for the layoff workers and also takes part in upholding social order indirectly. This research concludes that there are multiple mechanisms to manage industrial conflict in contemporary China, while all of them are imperfect. It is necessity for the collaborative governance of industrial conflict to build impartial distribution system, and rational power-sharing mechanism among government, enterprises and society. Keywords: Collaborative Governance; Labor Dispute; Power-sharing Mechanism; Transitional China Background Economic market-oriented reform in contemporary China impels series changes in enterprises management system, leadership system, employment system, salary system and social security system and other aspects by means of the introduction of FDI, development of non-public sector economy and reformation of state-owned enterprises (SOEs), and causes the differentiation and integration of social structure. The concentrated expression of the reform in labor relation is the end of permanent employment and the polarization of the working class. During this process, a mass of laid-off workers in SOEs and new generation 1

2 migrant workers dissatisfy with the benefit distribution. The dramatic increase of industrial conflict and even the recurrent mass disturbance are both serious threat to China s reform and development. Some scholars even put forward that China has entered into the critical stage of reform, (Zhang, 1999) the connection of social strata is cracking. (Sun, 2003) Because economic growth is a process of creative destruction, we need to take the growth into account, but also to solve the social conflict in the rapid change process. Under this background, this paper aims to build harmonious state-labor relationship, and probe into the collaborative governance mechanism on industrial conflict. The Self-protection Counter-movement in China s Social Transformation Karl Polanyi elaborates the double counter-movement of the transformation society, namely, the expansion of the laissez-faire economy on one hand and the self-protection movement of society against the economic disembedding. The latter is to prevent or at least reduce the catastrophic influence from market to society through protective laws and other means by the disadvantage weakened by market forces directly, such as workers. (Polanyi, 1944) In a sense, the industrial conflict and the vast of labor dispute in contemporary China can also be interpreted as the self-protection countermovement. Since the implement of Labor Law in 1995, the number of labor disputes has increased dramatically, the population involved escalated at the same time. (See figure 1) Figure 1 the worker population involved in labor dispute from 1996 No. of Laborers Involved No. of Laborers Involved in Collective Labor Data Sources: Chinese Labor Statistical Yearbook (2011), China Statistics Press Professor Yu Jianrong summarized the reasons of 200 contentious incidents of workers to safeguard rights, (see Table 1) (Yu, 2005) including the workers demand on financial 2

3 interest, the democratic rights and the relative deprivation psychologically. Table 1 Reasons of 200 Contentious Incidents of Workers Reasons No. of Incidents Percentage % Reform of SOEs Arrear or unpaid earnings Social insurance Aftercare of employees of bankrupt enterprises Tax and fee payment Working hours Corruption of enterprises officers The immediate impact of reform is the interest re-distribution in social classes. The Mistreatment of workers disproportionation of financial interest becomes the primary cause of China s industrial dispute, which Include the problems of labor remuneration, such as arrears and unpaid earning, reduction of wages and reduction of overtime pay; as well as the social security problems which are manifested as the inoperability of the Minimum Wage System and the low security level of enterprises. The industrial conflicts in China rarely aim to power struggle, but strive of financial interest, that is the livelihood issues. Even the collective actions in which workers demand democratic rights are also resolved following the arrangement of ceasing of reform, dismissal of party and government leaders and cadres, and retroaction of payment. The direct target of contentious politics in China is neither seizure of political power, nor dominant of civil society, but pursuit of specific interest under the control of government. (Yu, 2008) Rights of Democratic Management. Although the political power is not the major objective of industrial conflict, the situation that there are lack of rights of democratic management in the enterprises and short of representative in political system has become the inevitable reason. The democratic management rights of staff and workers comprise the democratic participations in the process of formulation and implementation of labor contract and in the process of decision-making and management in the enterprises. The democratic 3

4 rights are not paid attention to even it has been underlined repeatedly since the foundation of PRC in The restructuring, closure and bankruptcy of SOEs or layoffs often become the fuse of labor dispute even mass disturbance. That is not because of the low economic compensation, the break-off of social insurance between works and enterprises, the inoperability of staff resettlement scheme, but also owing to the distemperedness of democratic process, the imperfect of working, such as without the deliberation of Congress of Workers and Staff, and violation of the right to know and right to democratic participation of workers and staff. In the non-public-owned enterprises, the investors and managers have absolute rights on the formulation of collective labor agreement and on the termination of the contract unilaterally, which also causes a great part of labor disputes. Social Justice. The industrial conflicts in China are also bound up with the unreasonable distribution policy and the corruption of enterprises leaders and cadres. The distribution system according to work and the factors of production facilitates the shareholding incentive of enterprises leaders and polarizes the interest allocation. The corruption of managers worsens the labor conflict, and urges the formation of group identification and class-consciousness of working class. (Wu, 2008) The combination of the demand for social justice, the material benefit lost and the under-esteeming of democratic rights consolidates the self-identification of workers as the disadvantage in the reform and the feeling of depressed and despair, deteriorates social trust among social status, and turns into concurrency of labor conflict in contemporary China. Literature Review on the studies of Chinese industrial conflicts Reformation of Danwei: the social structure analysis of industrial conflicts Most Chinese scholars pay close attention to the impact of social structure reformation on the inner power structure and resource allocation in Danwei system and on the typology of labor disputes in the perspective of constructivism, (Li & Li, 2000) and lay stress on the 4

5 social cohesion and new social governance structure in post-danwei system. (Cao & Chen, 1997; Liu, 2002) While western scholars are more interested in the social structure after the collapse of Danwei system which is the implement of authoritarian state control, and analyze the labor disputes on these grounds. (Walder, 1986; Lu & Perry, 1997) They account the traditional Danwei system as the cornerstone of urban society, as the platform for state control. The Danwei system assures the citizens institutional dependency on state and the industrial harmony. The layoff policies in SOEs imply the end of perpetual labor relationship between workers and the SOEs paternal protection, and bring extensive labor dispute and labor collective actions in. (Chen, 2000) From the middle of 1990s on, with the deepening of market-orientated reform and increase of FDI, more and more studies have surpassed the scope of Danwei system and the workers in SOEs, and taken the rural migrant workers into account. Influenced by feminism theories and culture research, class, gender, urban and rural, or ethnic division are all brought in the political study of Chinese labor relationship (Solinger, 1999; Ngai, 2005). In these studies, the changing Chinese workplace engenders the workers class differentiation based on gender, the social estate of urban and rural place, the localism and ethnics, and intensifies the imbalance of market power in China and abroad. As it were, extant researches emphasize the removal of the institutional dependency of workers on Danwei, and the fundamental change of the nature of Chinese labor relation. The confrontation between labor and capital might facilitate the industrial union of labor collective actions, and threaten the social stability. Corporatism: Institutional framework of industrial conflict governance Corporatism is considered as the institutional framework of industrial conflict governance. Studies on this area explain the reasonableness of its application to Chinese context in cultural, political and social structure perspective, (Anger & Chen, 2001; Chen, 1993) view it as the new pattern of industrial conflict governance, (Cao & Wen, 2006; Liu, 5

6 2005) and forecast the corporatism state model only if the functional social organizations with high monopoly (such as All China Federation of Trade Union, the All-China Women s Federation) advance their representativeness and retain the monopoly, so that they are capable of codetermination with government and taking part of the second administrative system. (Kang, 1999) The question is how the extant functional social organizations to participate in government policy on behalf of their members. According to the corporatism pattern of industrial conflict governance, the main problem of current social structure is the lack of organized interest. Though the empirical studies point out that Chinese Workers Congress and the Labor Union have become the mechanism for workers interest (Unger & Chan, 2004; Feng, 2002), the combination unit system of politics with administration of the Congress of Workers and Staff and the duality of labor union indicate the uncertainty of the prospect that the two kinds of organizations will become the powerful workers interest representative organizations.(wang & He, 2004) More and more scholars emphasize the state as the core of corporatism analysis, (Hemerijck, 2006) and claim state has powerful control of social corporations. Nevertheless, the state only act as the balance power of the third party in interest games, neither the direct player, nor the interest community jointly with one party. Therefore, in the corporatism perspective, it is inevitable for the governance of industrial conflict to stress the strength of social organization and to adjust the mode of the state operate. Legal system: the juristic guarantee of industrial conflict governance The opinions of western scholars on the influence of the formulation and implementation of Chinese labor laws on the industrial relationship vary. One is against the law, from which the laws are not considered as the major means for alleviating the resistant of Chinese workers; (Lee, 2007) the other one support that Chinese workers use the law as weapon, so the laws actually increase the social conflict and enhance the rights awareness of 6

7 Chinese workers, and it is to use the law to contend.(gallagher. 2007) The two kind of viewpoints are need to rethink profoundly. It is normal of the increase of the industrial litigation at the beginning of the promulgation of labor laws, while the rights demands of the workers disappear immediately after the satisfaction of their financial interest, and the formal organizations are still vital for the industrial conflict governance. Hence, it might only be the researchers own wishful thinking to consider the use the law to contend as the symbol of the strengthening of worker s right awareness and the growth of civil society. The Collaborative Governance of China s Industrial Conflict Government: the supply of formal institutions and policies The promulgation of major labor laws in late 1990s regulates the industrial relationship in China. With the deepening of market-oriented reform and the carryout of labor contracts in labor-intensive enterprises, the labor conditions are worsening, including power of work and work safety. Government responds this situation by laws and regulations and safeguards workers basic rights of survive and alleviate industrial conflict by institutions for economic compensation and rights protection, such as Regulations on Workers Congress in Industrial Enterprises Owned by the Whole People (1986), Trade Union Law of PRC(amended in 2001), the Company Law of PRC (1993), Labor Law of PRC(1995), Labor Contract Law of PRC(2008) and other regulations 1, which set the standards of labor conditions and work safety, safeguard workers legitimate rights by collective contract and collective bargaining, set up a series of review mechanism for work practice, and eventually supply institutional means for resolving labor dispute. Labor laws: balancing labor security and elasticity of employment. The labor laws 1 The regulations to match the Labor Laws are as follows: The Law of People s Republic of China on Work Safety (2003); Code of Occupational Disease Prevention of PRC (2003); Collective Contract Provisions (2004); Labor Dispute Mediation and Arbitration Law (2007); Law for Promotion of Employment (2007); the Labor Contract Law of PRC (2008); Social Insurance Law of PRC (2010);and the laws which is in the process of formulation, such as Labor Supervision Law of PRC, Occupation Skill Development Law of PRC, and Law of Labor Protection of PRC. 7

8 issued by state are the responses for the problems in the reformation process and the adjustment of industrial relationship by labor laws must balance the labor security and elasticity of employment. (Miao, 2012) Under the influence of socialism at the beginning of reformation, the state safeguards the lifetime employment security of socialist workers at the expense of the employment autonomy of enterprises and the workers freedom of seeking job; with the comprehensive carryout of labor contracts, the state looses gradually the whole safeguard for workers, and ensures the employment autonomy of enterprises; while in the face of the worsening labor relationship and workers dissatisfaction, the state enacts laws to protect workers interest and stabilize the industrial relationship. Although there are criticisms about the Labor Contract Law, it also facilitates to resolute the labor dispute by institutional means. Within the enterprises, the industrial relationship is dominated by 1) enterprises financial situation; 2) the attitude and consciousness of managers; 3) workers bargaining power determined by their scarcity and technical merit. These factors cause the discordance between labor laws and the actual industrial relationship, and intensify the tension between economic development and social order. Institutions for Economic Compensation. The institutions for economic compensation are government s choice via policies and institutions to safeguard workers moral economy and forestall the extreme behavior from the losers. Because of the means of the minimum redistribution for government to maintain social order, the institutions are considered as the lightning conductor of labor conflict. The institutions for economic compensation in China consist of the policy for re-employment of laid-off workers, the unemployment insurance system and the urbanite s minimum security system. Though most systems are the urgent need and with low level, they still become the system of three social security programs, and support the subsistence allowances for the workers laid off from SOEs. It should be noted that though the security programs can play the 8

9 role of safety net at the beginning of reformation, the further institutional adjustment need to routinize the temporary policies, and make the interest compensation more relevant and meet the needs of underclass. Institutions for rights providing. The institutions for rights protection is the ones provided for workers to against the power of capital prior to or during the industrial conflict, which contain democratic management system and collective bargaining system. The democratic management system in enterprises serves as the institutional tools to restrain the power of managers, and to change the rights of employees to power. The main bodies for the implementation of democratic management system are the Staff and Workers Congress (SWC) and the Trade Union. The original intention of the setup of the Staff and Workers Congress is to uphold staff and workers lawful rights and interest from the source via their participation in democratic management, thus the rights of SWC are review and suggestion, co-decision-making, and democratic appraisal. But practically, the SWC must balance the objective of economic growth and the rights of staff and workers. Thus the real roles of SWC become to encourage workers, to boost workers morale, and to increase the enterprises economic efficiency ; to legitimize the decisions of managers on laid-off workers, wage increase and other issues by their rights of review and suggestion; to strengthen the communication between employees and managers, to provide channels for employees interest expression and conflict resolving, and to reduce the political pressure toward state and social public sphere objectively. (Zhang, 2001) With the interest differentiation, Trade Union in China begin to underline its function of harmonization and rights protection from the role of arms of CPC, that is to coordinate labor-capital relationship, and achieve labor-capital cooperation and co-benefit. In October 2008, the Fifteenth Congress of Chinese Trade Union reasserted the nature of trade union as 9

10 socialism with Chinese characteristics, and proposed the concept of the rights protection mechanism led by CPC and government. (Qiao, 2009) Therefore, as the preventive institution to safeguard workers interest, trade union stresses the legitimate right and alleviates the negative influence of labor market and industrial conflict in theory. Practically, trade unions also play an indispensable role in the industrial conflict governance, such as establishment of organization nets for labor dispute mediation, labor law training, wage negotiation training, publicity and consultation for workers on labor laws, manual for safeguarding migrant workers right, supervision and inspection the implementation of labor laws. The collective bargaining system is the formation mechanism for collective contract, the realization process of the collective rights. The purpose of the system is to unite the scattered labors in order to against the employers collectively and achieve fair working condition. The collective bargaining is known as a great social invention to normalize the industrial conflict and a special right for every worker in democratic state, (Zheng, 2002) because it can urge the give-and-take of the two parties and lessen the possibility of labor dispute by formal rules. With the intention of upholding social order, Chinese government and political party think high of the collective contract system, and the tripartite cooperation in the carryout process of the system include All China Federation of Trade Union (ACFTU) and Ministry of Labor, State Economic and Trade Commission, and China Entrepreneur Association. With respect to government, collective bargaining still severs as the important institution to promote social stability and balance all kinds of economic strength in the market; and the signing of collective contract is the effective approach to modulate labor relationship and enforce workers participation in management. Because it is the collective bargaining mechanism which can facilitate the communication and reach an agreement between labor and capital, the institutionalized channels for collective communication and bargaining are more 10

11 important than the collective contract itself. Institutions for conflict resolving. During the process of preventing and governing industrial conflict, local governments utilize kinds of resources and mobilize other social forces to form far-ranging nets for perceiving and resolving conflict immediately. Among others, consultation, mediation, arbitration, court proceedings and other alternative dispute resolutions coexist, which benefits the resolution of conflicts by the best fit means. Figure 2 illustrates the channels of the governance of labor disputes in China. Figure 2 Channels of Labor Disputes Governance in China Different from the informal coordination between workers and managers/ CPC in planned economy, after the reformation, the resolution of labor disputes in China defer to the system of mediation-arbitration-court process, that is the mediation at enterprise level, the arbitration at local level and the litigation in People s Court. When labor disputes, the involved parties can go to negotiation and mediation procedures voluntarily; and then apply 11

12 for arbitration to labor dispute arbitration committee if the mediation fails. The involved parties shouldn t bring a case to court directly without the arbitration. These procedures are undertaken respectively by Enterprise Labor Dispute Mediation Committee (civil mediation), the arbitration committee at local government level (administrative mediation) and the People s Court (mediation by the court) The mediation center for social conflict resolving is an organization setup by local government as an affiliation of the judicial department. The mediation of social conflicts is designed to build the first totally-enclosed defensive line for social stability by the introduction of mediation idea and the construction of intermediation mechanism; to advance the precaution ability for potential disputes, the mediation ability for kinds of disputes, and the disposal capability of grave disputes; to form the joint forces for resolving disputes by information linkage, work cooperation, dispute co-mediation, and advantages complementation; and eventually prevent the intensification and upgrading of contradiction. In China, the principle of labor dispute resolution is procedural justice, timely convenience, protecting the rights of the parties involved equally, and mediation first. The mediation system is regarded as the essential mechanism for conflict resolution, which also embodies the Chinese traditional culture of morality given priority over penalty, punishment combination with education, the use of law and discipline rite simultaneously, rule of virtue and is known as experience of the Orient. Labor supervision system is a special inspection move for the enforcement of labor laws launched by local governments and aims at preventing actively and investigating timely the unlawful act of enterprises. The labor supervision department takes on the tasks of labor patrol and the construction of gridding and internet. The labor patrol are the inspection of the implementation of labor laws and regulations in labor-intensive enterprises and the special inspection move for certain situations, for example, the wage arrear of migrant workers, 12

13 unlawful employment and so on. The Regulation of Labor Insurance and Supervision promulgated in 2004 formulates that the workers with wage arrear can acquire the wages payable and penalty by report to the labor supervision department, and the legal approach or labor dispute arbitrations are not necessary. The labor supervision department has the absolute power of penalty on the complaints about child labor, cash pledge and arrears of wage. The construction of gridding and internet is to divide the administrative region into grids and equip with the labor coordinator with trainings by labor security departments in each grid, with the purpose of imposing restrictions on labor dispute and screening for enterprises with hidden labor dispute. The prediction network of enterprises village (community) town (sub-district) city labor supervision department in the cities can put the measures of prediction, forecasting and preventing into practice and eliminate the hidden labor disputes effectively. So to speak, the labor dispute prevention system intervened by government offer the institutional assurance for industrial conflict resolution by means of mediation and penalty. Briefly, the state supply kinds of formal institutions to prevent or compensate the lose in industrial conflict, such as the system of minimum standard of living for city residents, system of social insurance and unemployment insurance to safeguard the subsistence right; the Congress of Workers and Staff, Labor Union, Board of Director and Supervisors, and the Collective Bargaining System to endow workers democratic rights; the enterprises labor dispute mediation committee, labor department of government, the court, Letters and Visits System, tripartite consultation system to govern industrial conflict. Yet owing to the influence of macroscopic political system, all the institutions which increase workers bargaining right don t play their prescribed role. The Social Forces in Labor Disputes Governance Mass Media. The influential role of mass media comes from the powerful pressure of 13

14 the public opinion. At the beginning of reformation, the state formed or altered public attitude and idea, and strengthened the regulation and control of social psychology via the consensus propaganda from mainstream media. The idea of reformation which reflects the dominating ideology is disseminated among enterprises and workers by the channels such as community, NGOs, enterprises and public institutions, mass media and internet, and through the strategies of verbal communication, propaganda sheet and bulletin, newspaper and books, drama and movies, school education, mass organizations and cadre staff. (Guan, 2009) All these strategies avoid the large-scale conflict during the process of adjusting industrial relationship. Since 1990s, internet has been used as the major channel for the expression of public opinion, which challenges the effectiveness of traditional media dominated by government. And the publishing got rid of the control of government gradually. Under the pressure of the reducing of state s ability to generate revenue, the government relieves itself from the financial support obligation for publishing at the cost of loosening control. The publishing with self-raised funds has only to make every endeavor to meet society s needs for existence, which increases the dominate power of social field on reading and publishing. (Kang, 1999, p142) Therefore, the commercialization of Chinese mass media and publishing together with the competition among local governments enhance the media s supervisory role during the development of Chinese society, which including the supervision from the media dominated by central government toward local government and the one from the media dominated by some local government to other ones. The exposure by mass media benefits for the formation of social right and the pressure from public opinion which pushes the superior government to punish the illegal subordinate. Informal Organizations as the complementation of formal institution. The market-oriented reformation in China weakens the patron-client relationship between the state and labors in Danwei system and collapse the informal organizations supported by 14

15 patriotism and founded at the beginning of PRC. The welfare socialization in China opens the space for the development of new informal organizations. At present, lots of informal organizations in migrant workers consist of fellow-villagers, the labor contractors in most cases negotiate with managers or local government on behalf of the workers from the same hometown, while the information organization tends to be suppressed by managers and without legal status. In the coastal region where migrant workers aggregate, there are a batch of organizations to safeguard the migrant workers interest, which start with the retaking of defaulted wage. In the rights safeguard actions, the migrant workers in second generation have realized the combination of one right with another one, so it is not necessary to only protect their only economic interest, but also to safeguard their citizen rights, including rights to organize, to obtain social security, to participate, and to elect. (Zhang & Li, 2004) More and more migrant workers organization emerges, such as education service organization for migrant workers in Guangzhou, the Institution of Contemporary Observation in Shenzhen, Workingwoman Concern in Shenzhen, Organizations for Health Career Service in Guangzhou, The Little Bird Hotline for Defending Migrant Workers Rights and Pearl River Workers Service Center.(Huang, 2007) In Yangtze River Delta and Pearl River Delta, the labor unions launched by young migrant workers are booming, and become the original structure for strive for the interest of migrant workers and bargaining with the employers. And the spontaneous groups which speak for migrant workers emerge and come into play, such as bar associations. From 1990s on, all kinds of non-governmental legal aid activities appeared in many Chinese cities. A batch of lawyer organizations in China, international human rights organizations and international labor organizations, for example, Oxfam join in the activities for safeguarding the labor rights. The analysis of Chinese workers at the bottom of society indicates that informal organizations alleviate the pressure from the losers in social distributions via their function of mutual help. 15

16 Table 2 Findings on Social Support System (Li, 2007) Channels of Help No With few A few A lot of Not sure Support help help of help help Degree Family Family clan Personal network Community Danwei Local government CPC LU, CYL & WF Judicial/ law enforcement agencies Industrial/ professional association News media Charity organization Religious organization Letters and Visit Department Note: the Support Degree in the Table is the sum of a few of help and a lot of help. LU= Labor Union; CYL= Communist Youth League; WF= Women s Federation From the Table 2 above, owing to the weakness of community, the function shouldered by Danwei is not transferred to society after the reformation of Danwei system, but family, family clan and personal network play more important roles in safeguarding workers rights. With the increase of population of floating people and the ones without affiliation, such as the self-employed, the unemployed, the retired, the city communities bear more and more functions. Thus, the community services need to be offered by multi-organizations. Besides government and market, the social organizations such as neighborhood associations, volunteer organizations, private non-enterprises organization are vital forces for grassroots governance, and possess its own unique advantages in assisting community autonomy and supplying social services. (Yang, 2011) In short, the social organizations or workers self-organizations, such as family clan, fellow-villagers, and genetic relationship can strengthen the collective power of workers at certain degree, can alter workers values and the disadvantage position in labor and capital power structure, can mitigate the discontented sentiments and polarization actions, and 16

17 eventually play the role in industrial conflict governance that simply didn t exist in government operating procedures. Street-level Law-enforcement officers. During the process of the enforcement of formal administrative rights, the street-level law enforcement officers bring in the principles of daily life and common ideas such as human relationship, the Face and conventions to resolve conflict tactfully. (Sun & Guo, 2000) In the concrete cases of labor dispute, law enforcers urge the mediation between the workers and employers, and push the disputes to be resolved by means of the human relationship and Faces accumulated in the daily work. The influences of unwritten values, ideas, custom, habit, responsibility and obligation informalize the enforcement of formal institutions, which reduces the confrontation between labor and capital, and prevent the organized collective activities. (Liu, 2005) The leaders of enterprises often use the fellow-villager relationship to propel the implantation of enterprises regulations. For example, some enterprises in Guangdong province hire managers from different birthplace to supervise their fellow-villagers in order to lessen the industrial tension. (Gallagher, 2007, P93) In the Chinese labor dispute mediation system, the strategy of flexible law-enforcement is used for conflict resolution, which comprises complaint from employees to relieving their confrontation; inviting the meal to cool down the workers with extreme emotion; coaxing and pestering unceasingly and reasoning managers to strive for interest for workers; and balancing workers rights and managers interest. Generally, formal institutions are the rigid constraint in society and set the boundary for the resolution of labor dispute, while its effectiveness require the support of informal institutions and the enforcement tactics of the street-level enforcement officers, that is the lubrication action from human relationship, Face, and connections. The full use of Chinese traditional culture and custom to implement laws and institutions flexibly by street-level law-enforcement officers has become the Chinese characteristics. Those informal factors 17

18 have even been viewed as the much more effective approaches than laws to resolve social conflicts. But the effectiveness of the informal institutions needs to balance the economic development and the basic livelihood protection. Conclusion: Construction of Collaborative Governance Mechanism for Industrial Conflict The labor disputes during the Chinese reformation process derive from the strategies of development and accumulation prior to fairness and distribution, and the weakness of interest redistribution function of Danwei system. Hence, in post-danwei society, the governance of industrial conflict is in need of the joint forces from the state, enterprises and society. The government has constructed the legal system actively: the minimum wage system, social security system, democratic participative management system and various right relief systems; the rebuilt of the enterprises mediation committee and labor arbitration committee in 1987 after their 32 years absence, and the introduction and development of collective bargaining system and collective contract system. All these formal institutions were helping to create problem-solving forums, fostered the dependence of workers on government at the same time, and reflected the government dominance in the process of political economic transformation in developing countries. Meanwhile, the important supervisory role of mass media exerts pressure on government for industrial conflict governance; variety of social organizations increase the bargaining power of workers; the street-level law-enforcement officers relieve the tension between labor and the capital by soft strategies such as human relationship, Face and other Chinese traditional custom. What needs special attention is that the tactic law-enforcement cannot eliminate the unevenness of interest distribution fundamentally, thus does not remove the primary reason of industrial conflict. Because collaborative governance is an open process, in the model, government plays a leading role, while other governance subjects should play a 18

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