Management and Labour relations in China

1
Management and Labour relations in China
2
Rural migrant labour in China Trade unions
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 unions response to rural migrant labour
• Ways of organising
• Barriers to union organisation

3
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

4
80 of workers work in the construction and
catering industries are rural migrant workers
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Worst jobs, big contribution to urban economy,
but little rights
6
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

7
Fingers crossed/chopped off?

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

8
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

9
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 unions 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
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Table 1. Union membership level in organisations
where unions were established
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Two ways of organising rural migrant workers

• 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)

• 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

21
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)
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Table 3. Trends of labour disputes in China
(1994-2004)
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Table 4. Labour dispute cases classified by
reasons for disputes in China (1997-2003)
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Table 5. Labour disputes appealed and settled by
arbitration committees in China (1995-2004)
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