Management and Labour relations in China

Fang Lee Cooke, MBS, UK 1

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 2

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 3

ANBS Fellow, Australia
80% of workers work in the construction and catering
industries are rural migrant workers

Fang Lee Cooke, MBS, UK 4

ANBS Fellow, Australia
Worst jobs, big contribution to urban
economy, but little rights

Fang Lee Cooke, MBS, UK 5

ANBS Fellow, Australia
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

Fang Lee Cooke, MBS, UK 6

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 7

ANBS Fellow, Australia
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

Fang Lee Cooke, MBS, UK 8

ANBS Fellow, Australia
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)

Fang Lee Cooke, MBS, UK 9

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 10

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 11

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 12

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 13

ANBS Fellow, Australia
 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)

Fang Lee Cooke, MBS, UK 14

ANBS Fellow, Australia
 TU structure at local levels
Municipal government

District ACWF at ACFTU at

government Municipal level Municipal level

District level ACWF at ACFTU at

governmental district level district level
departments
Trade union
units in
workplaces at
municipal level
ACWF at ACFTU at
county level county level

ACWF at ACFTU at
township level township level

ACWF at
village level

Fang Lee Cooke, MBS, UK 15

ANBS Fellow, Australia
Table 1. Union membership level in organisations where unions
were established

No. of No. of No. of No. of No. of full-

grassroots employees Female Membership female time union
Membership
Year unions (1,000 employees (1,000 members officials
density (%)
(1,000 units) persons) (1,000 persons) (1,000 (1,000
persons) persons) 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.

Fang Lee Cooke, MBS, UK 16

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 17

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 18

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 19

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 20

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

Fang Lee Cooke, MBS, UK 21

ANBS Fellow, Australia
 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)

Fang Lee Cooke, MBS, UK 22

ANBS Fellow, Australia
 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

Fang Lee Cooke, MBS, UK 23

ANBS Fellow, Australia
 Table 2. The disposal of labour disputes (2003)
Item Total State- Collective- Hong Kong, Share holding Limited Private Individual State Organs Others
owned owned Macao, Taiwan Joint Liability Enterprises Economy and
enterprises enterprises and Foreign Ownership Corporations Institutions
Funded Enterprises
Enterprises
No. of cases left over from last period 16,276 4,263 1,483 2,061 1,981 3,056 1,895 386 488 663
(case)
Cases accepted (case) 226,391 48,771 30,218 23,391 23,451 47,814 31,537 9,603 5,937 5,669
No. of cases appealed by employer 10,879 3,158 1,357 1,124 884 2,438 1,257 270 255 136
No. of cases appealed by worker 215,512 45,613 28,861 22,264 22,567 45,376 30,280 9,333 5,682 5,536
No. of collective labour disputes 10,823 3,623 1,519 1,121 733 1,801 1,248 343 221 214
No. of persons involved (person) 801,042 309,439 97,501 89,621 63,649 126,537 73,627 19,763 9,532 11,373
No. of persons involved in 514,573 294,794 47,796 45,798 18,456 54,613 37,720 6,880 3,704 4,812
collective disputes

Cause of the disputes (case)

Labour remuneration 76,774 12,637 10,168 7,775 8,351 16,903 12,244 4,571 1,367 2,758
Social insurance & welfare 44,434 11,025 6,903 3,807 4,676 9,307 5,358 925 1,423 1,010
Work injury 31,747 4,936 3,586 3,425 2,568 7,464 6,633 2,213 390 532
Occupational training 1,211 313 213 186 221 91 103 30 16 38
Change of labour contract 5,494 1,796 684 480 701 823 513 116 215 166
Relieve of labour contract 40,017 10,702 4,944 5,090 3,561 8,310 4,231 917 1,524 738
Termination of labour contract 12,043 3,671 1,918 1,608 1,217 1,708 1,039 281 382 219
Laid-off 1,540 570 438 49 185 102 44 57 54 41
Others 13,131 3,121 1,364 971 1,791 3,106 1,372 493 566 347
No. of cases settled (case) 223,503 49,528 29,376 20,692 23,557 48,105 31,092 9,312 6,062 5,779
By manners of settlement
By mediation 67,765 13,592 9,783 6,511 7,105 14,322 10,432 3,229 1,806 985
By arbitration lawsuit 95,774 23,344 12,487 9,182 10,082 20,356 11,910 3,807 2,160 2,446
Others 59,954 12,592 7,106 4,999 6,370 13,427 8,750 2,276 2,096 2,338
By result of settlement
Won by employers 34,272 9,375 4,370 3,101 4,193 6,567 3,712 880 1,239 835
Won by workers 109,556 24,636 16,298 9,733 9,954 21,845 15,878 5,462 2,730 3,020
Won partly by both parties 79,475 15,517 8,708 7,858 9,410 19,693 11,502 2,970 2,093 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 58,451 11,404 8,231 9,276 3,897 11,711 8,172 3,848 1,050 862
forms (case)

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

Fang Lee Cooke, MBS, UK 24

ANBS Fellow, Australia
 Table 3. Trends of labour disputes in China (1994-2004)

Year No. of cases accepted Increase from No. of employees involved Increase from previous Cases Means of settlement
previous year (%) year (%) settled
Mediation Arbitration Others

Total Collective Total Collective In total In collective In total In collective cases % of cases % of cases % of
cases cases cases cases cases cases cases cases total total 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.

Fang Lee Cooke, MBS, UK 25

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

Year Total cases Pay, % of total Labour % of total Alteration or % of total Others % of total
insurance & cases protection / cases termination cases cases
welfare work injury of contract
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.

Fang Lee Cooke, MBS, UK 26

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

By result of settlement
Appealed by Appealed by Cases won by Cases won by Cases partly won by
employers employees employers employees both parties
Year Cases Cases % of total Cases % of total Cases Cases % of total Cases % of total Cases % of total
settled
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.

Fang Lee Cooke, MBS, UK 27

ANBS Fellow, Australia
Fang Lee Cooke, MBS, UK 28
ANBS Fellow, Australia