State of the unions

For former UK Prime Minister Margaret Thatcher, the labour unions were “the enemy within”. So much so that she relished confronting them, culminating in the brutal Miners’ Strike of 1984/5.

But in China the trade unions are a less adversarial bunch. The workers, on the other hand, seem to be showing signs of becoming a lot more restive themselves.

On paper, the All-China Federation of Trade Unions, the only union permitted at a national level, looks like a big-hitter. It sits astride a network of regional federations and industrial unions with more than 200 million members. It has faced down the bête-noire of labour activists worldwide too, getting Walmart to accept a unionised workforce at many of its Chinese stores.

But down on the factory floor, there are those that question the ACFTU’s contribution. At the factory-of-the moment – Foxconn in Shenzhen – reports suggest that only a handful of the thousands of employees are signed up union members. Union bosses have also been criticised for not doing enough to secure pay rises or shorten long hours of overtime.

And during the Honda strike in Foshan, strikers tried to negotiate directly with management. They even came to blows with their own union officials, who they accused of failing to represent them (see WiC63, Talking Point).

Admittedly, that did lead to an open letter of apology, in which union leaders regretted the “misunderstandings and verbal imprudence” of some of their local representatives. But it also called for a return to the status quo. “Please trust the union,” it pleaded. “Trust each level of party officials and government. We will definitely uphold justice.”

The apparent discord between the leadership and the rank-and-file makes more sense in light of the ACFTU’s priorities. Priority number one for senior officials is minimising social unrest. Which is not always the same, of course, as directly representing their members’ interests.

When disputes flare up between workers and their bosses, union officials often serve more as mediators between the two sides. Some claim that relations with company bosses often get too cosy, especially when every effort is being made to keep the factory busy, hit local growth targets and woo foreign investment.

As the Global Times notes, this has meant that “extremely few, if any” strike actions have ended up successful.

This is a “top down” industrial relations landscape. At the summit is the ACFTU. Reporting up to it, a series of provincial or county-level bodies. And, at the bottom of the pile, the enterprise or company level unions themselves.

The grassroots has not had much of a voice traditionally. Nor is there a clear right to strike (it was removed from the Chinese constitution in 1982, although there is also no legislation specifically banning stoppages, creating a grey area that has prevented unions from advocating action).

Instead, the union set up process is usually a more conciliatory affair. District level officials will speak to company management for their approval in establishing a branch. Together they agree on a union chairman; the news is then announced to the workforce.

Clearly, this can leave workers feeling a little sidelined. A new walkout this week at another plant in the Honda supply chain, this time an exhaust systems firm in Foshan, reinforces the point. Within the list of demands: that the union president be replaced. He also happens to be a senior manager at the factory.

But are there signs of a closer alignment between union leaders and the workers that they nominally represent?

Certainly, media coverage of the Foxconn suicides and Honda strikes has included calls for better representation of workers. The state newspapers must have got the nod to raise this, and they’ve concentrated this week on highlighting that wages have been in decline for years as a percentage of GDP. An op-ed in the People’s Daily went further, questioning whether the government attitude towards business might be “too friendly”.

Implicitly, that is also a criticism of the ACFTU, albeit an easier one to make when it is foreign-owned factories in the firing line. Stung by the commentary, ACFTU seniors have released an urgent notice calling for branches to push more for workers’ interests.

Particularly they want to see more promotion of collective wage negotiations. Collective bargaining was championed as part of major labour law reform two years ago. Although experts say that many workers are now more aware of their rights under the new legislation, actual implementation so far has been patchy. The Economic Observer agrees that few firms have agreed to collective bargaining on a full basis for setting wage levels.

Of course, that might change if there are more strikes and further stoppages. And there are signs this week that labour shutdowns are starting to spread more widely, with workers emboldened by the success of the strike at the Honda transmission plant in Foshan. Xinhua is reporting stoppages at a number of KFC and Pizza Hut restaurants in Shenyang. The South China Morning Post reported six further strikes today.

The Financial Times agrees that industrial action is “proliferating” and strikes have started to happen in a “concerted fashion”.

That might mean that the ACFTU concludes that maintaining social stability coincides with a stronger representation of workers’ demands. Hence the media coverage now focusing on ‘fair’ factory floor wages.

But if many more workers choose to down tools, the authorities will face something of a quandary. On the one hand, higher pay for employees should contribute towards policy goals in boosting domestic consumption. On the other, Beijing won’t want a wave of strike action across the country developing an independent momentum of its own. At that point, events might move beyond ACFTU control.

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