Management and Labour relations in China

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

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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

4. 80% of workers work in the construction and catering industries are rural migrant workers Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

5. Worst jobs, big contribution to urban economy, but little rights Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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

10. 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 ANBS Fellow, Australia

11. 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 ANBS Fellow, Australia

12. 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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

13. 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 ANBS Fellow, Australia

14. 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 ANBS Fellow, Australia

15. TU structure at local levels Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

16. Table 1. Union membership level in organisations where unions were established Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

17. 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 Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

18. 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 lessidentified with the TU • More competition from other service providers Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

19. 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 ANBS Fellow, Australia

20. 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 ANBS Fellow, Australia

21. For years, MNCs like Wal-Mart have resisted the call for union recognition Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

22. 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 ANBS Fellow, Australia

23. 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 ANBS Fellow, Australia

24. Table 2. The disposal of labour disputes (2003) Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

25. Table 3. Trends of labour disputes in China (1994-2004) Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

26. Table 4. Labour dispute cases classified by reasons for disputes in China (1997-2003) Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

27. Table 5. Labour disputes appealed and settled by arbitration committees in China (1995-2004) Fang Lee Cooke, MBS, UK ANBS Fellow, Australia

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