Fang Lee Cooke, MBS, UK ANBS Fellow, Australia 1 Management and Labour relations in China.

Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

1

Management and Labour relations in China


2

Rural migrant labour in China: Trade union’s response and organising strategy

Overview:

The rapid growth and role of rural migrant labour in urban economy

Working conditions of rural migrant labour in urban areas

The role of the Chinese trade union

Trade union’s response to rural migrant labour

Ways of organising

Barriers to union organisation


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The rapid growth and role of rural migrant labour in urban economy

200 million rural migrant workers are working in urban area

Construction sites, foreign-owned manufacturing factories, catering industry, and community services the main employing sites

Rural migrant workers now make up over 46% of the workforce in the secondary and tertiary industrial sectors


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80% of workers work in the construction and catering industries are rural migrant workers


5

Worst jobs, big contribution to urban economy, but little rights


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Working conditions of rural migrant labour in urban areas

3/4 of the rural migrant workers did not receive their wage payment on time

Construction industry employers the worst offenders – local governments among the worst debters

84% of the migrant workers have no employment contract

Over 80% of those suffered in work-related injuries in non-state-owned sector were rural migrant workers – mining, construction & manufacturing among the worst sectors


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While children are wishing for their best Christmas and birthday gifts in the West, the Chinese workers are losing their fingers in their production

Fingers crossed/chopped off?


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Working conditions of rural migrant labour in urban areas (cont…)

Over 80% of the rural migrant workers did not participate in any form of social insurance

25% of rural migrant workers earned below local minimum wage, 45% had no rest day

Less than 10% of the rural migrant workers ever received any training – leading to more industrial accidents


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Living conditions of rural migrant labour in urban areas

The vast majority of migrant workers live in very poor environment - in crowded dormitories and eat in crude canteens to economise on their social reproduction cost and maximise production time

Social discrimination & exclusion another problem endured by rural migrant workers & their families living in urban areas, e.g.

– Little coverage of social insurance & welfare

– No access to education for their children

– May be subject to discrimination & bullying – Lack of respect from urban citizens

Social discrimination regarded by migrant workers as the most formidable social barriers to their integration into the urban life

Consequences – mingong huang (shortage of rural labour)


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Reasons for mingong huang

• Low wage & work intensity main reasons for shortage of labour, e.g.

– In Guangdong Province wage only increased 68 yuan in 12 years

– A migrant worker in this area earns 6,000 yuan a year, while the average annual wage of all workers has been increasing by more than 1,000 yuan per year to 14,040 yuan in 2003

• Improved farming policy has made farming less unbearable – tax relief

• Developed areas no longer have the monopsony of job markets – plants are moving towards western regions for cheaper labour and other costs


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Reasons for mingong huang (cont…)

• Rural migrant workers choose to work nearer hometown for cultural proximity

• Reduction of young workers as a result of one-child policy

• Retention of skilled migrant workers – workers jump ships collectively for better wage and better working conditions/better treatment

• Lack of labour market information – mismatch of demand and supply

• Lack of supply of skilled labour and excessive supply of unskilled labour


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Trade union’s response to rural migrant labour

Little interest of the TU on rural migrant workers until recently

TUs instructed by the Government in late 1994 to launch a campaign ‘to set up unions in all the non-unionised foreign-invested enterprises, with the ultimate declared purpose of implementing collective bargaining’

Success was limited – only 32% of non-state-owned firms are unionised – even less clear of its impact on workers

By the end of 2004, there were about 20 million rural migrant worker union members. ACFTU set a target to recruit 6.6 million each year in the next four years

Policy drive at the top is not always embraced with enthusiasm at grassroot level


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The role of the trade unions

– TU-Communist party tie goes back to 1920s (1st May 1925 founded)

– Only one union recognised – All-China Federation of Trade Unions (no ‘trade’ characteristics)

– Welfare role and training role under the leadership of the Communist Party

– Unionisation level high in the state sector but low in private sector

– Trade unions more organised and competent in certain sector (e.g. large SOEs) but influence in management decisions is generally declining

– Union presence has little impact on wage level


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The role of the trade unions (cont…)

– Misguided perceptions of managers and TU reps about their role

– Union reps lack of collective bargaining or negotiation skills and other resources

– Low opinion of workers on the effectiveness of the TU

– New role of the trade unions in light of changing employment relations?

– Trade Union Law (1950, 2001)


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TU structure at local levels

ACWF at Municipal level

District level governmental departments

ACWF at district level

ACFTU at district level

ACWF at county level

ACWF at township level

ACFTU at Municipal level

ACWF at village level

ACFTU at county level

ACFTU at township level

District government

Municipal government

Trade union units in

workplaces at municipal level


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Table 1. Union membership level in organisations where unions were established

Year

No. of grassroots

unions (1,000 units)

No. of employees

(1,000 persons)

No. of Female

employees (1,000

persons)

Membership (1,000

persons)

No. of female

members (1,000

persons)

Membership density (%)

No. of full-time union

officials (1,000

persons)

1952 207 13,932 -- 10,023 -- 71.9 53

1962 165 26,671 -- 19,220 -- 72.1 86

1979 329 68,972 21,717 51,473 -- 74.6 179

1980 376 74,482 25,186 61,165 -- 82.1 243

1985 465 96,430 35,967 85,258 31,492 88.4 381

1990 606 111,569 42,910 101,356 38,977 90.8 556

1995 593 113,214 45,153 103,996 41,165 91.9 468

2000 859 114,721 45,345 103,615 39,173 90.3 482

2001 1,538 129,970 50,879 121,523 46,966 93.5 --

2002 1,713 144,615 51,576 133,978 46,652 92.6 472

2003 906 133,016 50,793 123,405 46,012 92.8 465

2004 1,020 144,367 55,026 136,949 51,353 94.9 456

Source: adapted from the China Statistics Yearbook 2005, p.777.


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Two ways of organising rural migrant workers

1. Workplace organisation – to gain recognition and then organise

– Difficult to gain access but membership level is usually high at over 90% once a union is recognised

– Less cost and more employer support

– TU on site mainly play HR function and welfare role

– Limited bargaining effect

– Less competition from other service providers

– Union activities and governing framework more workplace-specific


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Two ways of organising (cont…)

2. Distant organisation – recruit migrant workers outside the workplace by offering them a range of services, e.g. training, employment information, legal help

– More costly but greater impact of information dissemination

– Individual worker oriented instead of collective

– Workers less identified with the TU

– More competition from other service providers


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Barriers to union organisation

Persistent employer resistance – union recognition seen as ‘inviting wolf into the house’

Tactics are used to delay union access

Competing demand on local government in developing local economy & protect workers’ rights – ineffective enforcement of Trade Union Law and Labour law

Disinterest from rural migrant workers to join TU due to the perceived inefficacy of the trade union


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Barriers to union organisation (cont…)

Union recognition have little impact on wage level or coverage of social insurance

Logistic problems for TU to organise & retain migrant workers members

Insufficiency of professional competence among union officials at operational level, e.g. legal knowledge, other professional skills

Lack of resources – financial constraints and job threat


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For years, MNCs like Wal-Mart have resisted the call for union recognition


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Competing service providers

Local governments

Job centres

Training centres

Employment agencies

Legal aid centres

Tongxiang hui (unofficial associations of fellow migrant workers from the same region or village)


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Ways forward for the unions

Join forces with other service providers

Bargain for more resources from the

Government

Seek closer alliances with NGOs to exert pressure on employers

Training and development of union officials

Closer partnership with local governments and employers

Educate workers and build trust and identification

More innovative delivery of effective services to workers


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Table 2. The disposal of labour disputes (2003)

Item Total State-owned

enterprises

Collective-owned

enterprises

Hong Kong, Macao, Taiwan

and Foreign Funded

Enterprises

Share holding Joint

Ownership Enterprises

Limited Liability

Corporations

Private Enterprises

Individual Economy

State Organs and

Institutions

Others

No. of cases left over from last period (case)

16,276 4,263 1,483 2,061 1,981 3,056 1,895 386 488 663

Cases accepted (case) No. of cases appealed by employer No. of cases appealed by worker

No. of collective labour disputes No. of persons involved (person)

No. of persons involved in collective disputes

Cause of the disputes (case)

Labour remuneration Social insurance & welfare Work injury Occupational training Change of labour contract Relieve of labour contract Termination of labour contract Laid-off Others

226,391 10,879

215,512 10,823

801,042 514,573

76,774 44,434 31,747

1,211 5,494

40,017 12,043

1,540 13,131

48,771 3,158

45,613 3,623

309,439 294,794

12,637 11,025

4,936 313

1,796 10,702

3,671 570

3,121

30,218 1,357

28,861 1,519

97,501 47,796

10,168 6,903 3,586

213 684

4,944 1,918

438 1,364

23,391 1,124

22,264 1,121

89,621 45,798

7,775 3,807 3,425

186 480

5,090 1,608

49 971

23,451 884

22,567 733

63,649 18,456

8,351 4,676 2,568

221 701

3,561 1,217

185 1,791

47,814 2,438

45,376 1,801

126,537 54,613

16,903 9,307 7,464

91 823

8,310 1,708

102 3,106

31,537 1,257

30,280 1,248

73,627 37,720

12,244 5,358 6,633

103 513

4,231 1,039

44 1,372

9,603 270

9,333 343

19,763 6,880

4,571 925

2,213 30

116 917 281

57 493

5,937 255

5,682 221

9,532 3,704

1,367 1,423

390 16

215 1,524

382 54

566

5,669 136

5,536 214

11,373 4,812

2,758 1,010

532 38

166 738 219

41 347

No. of cases settled (case) By manners of settlement

By mediation By arbitration lawsuit Others

By result of settlement Won by employers Won by workers Won partly by both parties

223,503

67,765 95,774 59,954

34,272

109,556 79,475

49,528

13,592 23,344 12,592

9,375

24,636 15,517

29,376

9,783 12,487

7,106

4,370 16,298

8,708

20,692

6,511 9,182 4,999

3,101 9,733 7,858

23,557

7,105 10,082

6,370

4,193 9,954 9,410

48,105

14,322 20,356 13,427

6,567

21,845 19,693

31,092

10,432 11,910

8,750

3,712 15,878 11,502

9,312

3,229 3,807 2,276

880

5,462 2,970

6,062

1,806 2,160 2,096

1,239 2,730 2,093

5,779

985 2,446 2,338

835

3,020 1,724

No. of cases unsettled (case) 19,164 3,506 2,325 4,760 1,875 2,765 2,340 677 363 553 Number of cases settled by other forms (case)

58,451 11,404 8,231 9,276 3,897 11,711 8,172 3,848 1,050 862

Source: China Statistical Yearbook 2004, pp. 876-7.


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Table 3. Trends of labour disputes in China (1994-2004)

Means of settlement Year No. of cases accepted Increase from previous year (%)

No. of employees involved Increase from previous year (%)

Cases settled

Mediation Arbitration Others

Total cases

Collective cases

Total cases

Collective cases

In total cases

In collective cases

In total cases

In collective cases

cases % of total

cases % of total

cases % of total

1994 19,098 1,482 -- -- 77,794 52,637 -- 68 17,962 9,362 52 3,465 19 5,135 29

1995 33,030 2,588 73 75 122,512 77,340 58 63 31,415 17,990 57 7,269 23 6,156 20

1996 47,951 3,150 45 22 189,120 92,203 54 49 46,543 24,223 52 12,789 27 9,531 20

1997 71,524 4,109 49 30 221,115 132,647 17 60 70,792 32,793 46 15,060 21 22,939 32

1998 93,649 6,767 31 65 358,531 251,268 62 70 92,288 31,483 34 25,389 28 35,155 38

1999 120,191 9,043 28 34 473,957 319,241 32 67 121,289 39,550 33 34,712 29 47,027 39

2000 135,206 8,247 13 -9 422,617 259,445 -11 61 130,688 41,877 32 54,142 41 34,699 27

2001 154,621 9,847 15 19 467,150 286,680 11 62 150,279 42,933 29 72,250 48 35,096 23

2002 184,116 11,024 19 12 608,396 374,956 30 63 178,744 50,925 29 77,340 43 50,479 28

2003 226,391 10,823 23 -2 801,042 514,573 32 37 223,503 67,765 30 95,774 43 59,954 27

2004 260,471 19,241 15 78 764,981 477,992 -5 -7 258,678 83,400 32 110,708 43 64,550 25 Sources: adapted from China Statistical Yearbook, from 1995 to 2005.


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Table 4. Labour dispute cases classified by reasons for disputes in China (1997-2003)

Year Total cases Pay, insurance &

welfare

% of total cases

Labour protection / work injury

% of total cases

Alteration or termination of contract

% of total cases

Others % of total cases

1997 71,524 41,145 58 2,256 3 18,673 26 9,450 13

1998 93,649 51,602 55 6,931 7 20,661 22 14,455 15

1999 120,191 73,522 61 7,820 7 29,608 25 9,241 8

2000 135,206 73,021 54 13,008 10 35,794 27 13,383 10

2001 154,621 76,330 49 18,171 12 43,590 28 16,530 11

2002 184,116 91,766 50 23,936 13 49,782 27 18,632 10

2003 226,391 121,208 54 31,747 14 59,094 26 14,342 6

Sources: adapted from China Statistical Yearbook, from 1998 to 2004.


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Table 5. Labour disputes appealed and settled by arbitration committees in China (1995-2004)

By result of settlement

Appealed by employers

Appealed by employees

Cases won by employers

Cases won by employees

Cases partly won by both parties

Year Cases Cases % of total Cases % of total Cases settled

Cases % of total Cases % of total Cases % of total

1995 33,030 -- -- -- -- 31,415 6,189 20 16,272 52 8,954 28

1996 47,951 6,254 13 41,697 87 46,543 9,452 20 23,696 51 13,395 29

1997 71,524 2,751 4 68,773 96 70,792 11,488 16 40,063 57 19,241 27

1998 93,649 4,446 5 84,829 91 92,288 11,937 13 48,650 53 27,365 30

1999 120,191 6,039 5 114,152 95 121,289 15,674 13 63,030 52 37,459 31

2000 135,206 5,985 4 120,043 89 130,688 13,699 10 70,544 54 37,247 29

2001 154,621 7,840 5 146,781 95 150,279 31,544 21 71,739 48 46,996 31

2002 184,116 11,863 6 172,253 94 178,744 27,017 15 84,432 47 67,295 38

2003 226,391 10,879 5 215,512 95 223,503 34,272 15 109,556 49 79,475 36

2004 260,471 11,136 4 249,335 96 258,678 35,679 14 123,268 48 94,041 36

Sources: adapted from China Statistical Yearbook, from 1996 to 2005.


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Fang Lee Cooke, MBS, UK ANBS Fellow, Australia 1 Management and Labour relations in China.

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