China's new collective bargaining rule is too weak to ease labour conflicts
Aaron Halegua says Guangdong's failure to enact a strict regulation requiring employers to negotiate with disgruntled workers is a missed opportunity to stem the rising number of strikes
Strikes in China are on the rise: 2014 witnessed over 1,378, double the number in 2013. This surge intensified in the run-up to the Lunar New Year. Guangdong is the hub of both export manufacturing and labour unrest. The strikes there have been increasingly well coordinated and growing in size - nearly 40,000 workers at a Nike footwear supplier last year, another 3,000 workers at a Hewlett-Packard subsidiary last month.
China's strikes are unique not only because of their frequency, but also their form. In the West, strikes tend to occur after a period of collective bargaining, usually as a last resort. In China, workers' opening volley is often a strike. This is because employers are rarely motivated to negotiate until there is an immediate economic reason to do so. Further, without a functioning trade union, no practical mechanism exists to notify employers when workers are discontented and contemplating action.
But why does this difference matter? Although we read that many of these worker actions have resulted in higher wages or other benefits for employees, these strikes with "Chinese characteristics" also have very real costs to employers, the government and, most importantly, the strike leaders who are routinely fired and sometimes jailed.
Guangdong authorities recently adopted a regulation to foster collective bargaining and reduce strikes. Unfortunately, this effort is unlikely to succeed, and the pattern of strikes and repression can be expected to continue.
In practice, Chinese law affords striking workers little protection. In the Hewlett-Packard case, the worker who collected 4,400 employee signatures opposing a restructuring decision was fired shortly after the strike began. Fired strikers may turn to the courts to contest their termination, but they virtually never win.
Strike leaders face even worse consequences than loss of their jobs. They are often "blacklisted" and unable to find work elsewhere. Moreover, workers and advocates involved in organising a strike have been interrogated, beaten or detained by police, and sometimes charged with the nebulous crime of "disturbing public order". Some workers have even been convicted and served prison terms.
Workers are not the only ones burdened by China's unique labour relations system. The Nike supplier in Guangdong said the direct cost of the 40,000-worker strike last spring was US$27 million. Constantly calling out the riot police is also not cheap for local governments. Plus, strikes are problematic for officials obsessed with maintaining social stability.
This is why in 2010, Guangdong set out to change all this. The goal was to create a system by which workers could compel an employer to negotiate over workplace issues without first resorting to a strike.
Worker advocates were optimistic about the initial draft of the regulation. It made it easy for workers to request negotiations. Fines were authorised against employers who refused to negotiate, withheld information or negotiated in bad faith.
Most significantly, if the employer's unreasonable actions caused a work stoppage or slowdown, employees could not be fired for participating in such an action. In other words, it legitimised certain strikes. The draft regulation recognised that motivating employers to resolve disputes through negotiation required threatening them with the possibility of a protected strike.
But the Guangdong regulation that became effective on January 1 backed off from these reforms - and is thus unlikely to reduce the incidence of strikes.
The final regulation raised the threshold for workers to demand negotiations and removed any possible penalties against employers. If negotiations do happen, the regulation explicitly prohibits workers from engaging in a work stoppage or slowdown.
Most critically, even when negotiations break down due to the employer bargaining in bad faith, the regulation provides no protection to workers who strike in response. Quite the contrary, in the event of such a "negotiation dispute", the local government is instructed to call on the relevant agencies, including the police, to resolve it.
In short, the final regulation maintains the status quo. There are no new tools to pressure employers to take bargaining seriously. So it is no surprise that, this month, 1,000 workers at a Guangdong watch factory went on strike before there were any negotiations concerning proposed layoffs.
The Guangdong business owners, who lobbied to amend the initial draft, reportedly see the final version as a victory. Their view is misguided. Fewer costly work stoppages would benefit workers and the government, as well as employers. The regulation marks a missed opportunity to try to establish a functional collective bargaining system.
Instead, the Year of the Sheep is likely to see the strikes - along with the firings, injuries, detentions and arrests - continue to rage on in Guangdong.