Recent Development of Collective Bargaining in China

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1 Recent Development of Collective Bargaining in China Mingwei Liu Rutgers University Nov.4, 2011 A Turning Point of Chinese Industrial Relations? The new labor laws since 2008 Labor contract law, labor dispute mediation and arbitration law, employment promotion law, and social insurance law Uneven, partial, and selective enforcement of labor laws in China Higher coverage of labor contracts and social insurances, longer contract terms Avoidance and circumvention of labor regulations are still common, especially in the area of labor dispatch Soft enforcement approach that emphasizes the role of mediation including even forced mediation Not able to effectively resolve labor-management conflicts as these conflicts have become more and more interest-based rather than rights-based, but has popularized labor laws in the Chinese society A Turning Point of Chinese Industrial Relations? (cont.) A wave of strikes in 2010 (more than 300) Expanded to more areas: Pearl River Delta, Yangtze River Delta, and Dalian Involved more industries with the auto industry taking the lead role Spontaneous and unpredictable, no union involvement, even demanding autonomous unions in some cases Caused by not only violation of labor rights, but also workers demand for higher wages and fair treatment (new interest) Strike first, bargaining later Most strikes were tolerated by the local governments and resolved through collective negotiations with substantial gains of workers Young generation of migrant workers has shown rising consciousness of their labor rights and played a leading role in most strikes Emerging transformation: from individualized to collective labor relations

2 Collective Bargaining and the Two Chinese Labor Movements Top-down, official labor movement Led by the official unions (ACFTU) with little workers input Goal: Maintain social stability/protect workers legitimate rights Source of power: administrative power derived from the Party-State Activities: institution building, organizing, welfare, labor emulation, collective consultation, and labor dispute mediation Major method: top-down, bureaucratic campaign with quotas Current focus: equal consultation and collective contracts/collective bargaining The twelfth five-year plan calls for actively and soundly expand the coverage of collective consultation of wages (CCW) 18 provincial Party committees/government have issued documents on CCW; 15 provinces have included CCW in the government performance appraisal system; 7 provinces have enacted local regulations on CCW; and 22 provinces have issued documents on promoting CCW through the tripartite consultation system ACFTU s 3-year plan: CCW covers 80% of unionized enterprises; target fortune 500 companies Collective Bargaining and the Two Chinese Labor Movements (cont.) Bottom-up, spontaneous labor movement Workers spontaneous participation without formal organization Goal: protect workers legitimate rights and improve working conditions Source of power: solidarity and strike leverage Activities: collective bargaining Major method: industrial actions including work stoppages, strikes, and demonstrations Collective Bargaining in China Argument: effective collective bargaining in China needs integration of the strength of the two labor movement, namely, workers strike leverage and strong government support Two dimensions, bargaining level and bargaining initiator, classify collective bargaining in China into four patterns

3 Four Patterns of Collective Bargaining in China Bargaining Level Enterprise Industry/Region/ Occupation Pattern I: Consultation for Rights Pattern III: Negotiation for Stability Pattern II: Bargaining for Interests Pattern IV: Petition for Fair Administration Official Unions Bargaining Initiator Workers PatternⅠ: Consultation for Rights Often in state-owned enterprises, international joint ventures, and large foreign-invested or private-owned enterprises Issues: legal rights based, few interest based Parties: enterprise unions and employers Process: consultation, no or limited involvement of workers, nominal or limited Party/government s support of unions Outcome: nominal or limited gains of workers Major limitation: employer dominance of enterprise unions Case 1: XCMG Collective Consultation Case 2: HZJD Collective Consultation Pattern Ⅱ: Bargaining for Interests Often in foreign-invested and private-owned enterprises Issues: both legal rights and interest based Parties: workers and employers Process: bargaining often follows strikes, no or limited involvement of enterprise unions, possible involvement of the Party/government/regional union federations as the middle man or supporter of workers Outcome: possible substantial gains of workers Major limitation: workers lack bargaining power or skills Case: Collective Bargaining in Yantian International Port, Shenzhen

4 Pattern Ⅲ: Negotiation for Stability In counties/districts, towns/jiedao, communities, and local industries Issues: legal rights based or key issues that cause instability Parties: regional union federations or industry union associations and employers or their associations Process: consultation or negotiation, no or limited involvement of workers; nominal or limited Party/government s support of unions Outcome: nominal or limited gains of workers Major limitation: unions high dependence on Party/government support Case1: Regional Collective Contracts in Qiujiang Town, Guangdong Province Case 2: Industry Wage Negotiation in Xinhe Town, Zhejiang Province Pattern Ⅳ: Petition for Fair Administration Often in low end, service occupations in informal employment Issues: unfair administrative or work rules Parties: workers, administrative agency or government Process: strike or petition followed by formal/informal dialogue Outcome: possible substantial gains of workers Major limitation: vulnerable to government crackdown Case: Truck Drivers Strike in Yantian International Port, Shenzhen The Development of Collective Bargaining in China: Barriers Government: collective bargaining may lead to social instability, lower enterprise efficiency and slow down economic growth Employers: authoritarian management Unions: non-independence from government or employers Workers: lack of mobilization and organization; low labor market power

5 The Development of Collective Bargaining in China: Opportunities Central government: shift of focus from economic development to employment and income protection Progressive local governments: a third party role in strikes, support of workers /unions bargaining, and institution building efforts Unions: strengthened representative role, democratic elections of workplace union chairs Workers collective action is the fundamental driving force Employers: more awareness of the role of collective bargaining in keeping productive workforces The future lies in the integration of the two labor movements