In 2014 the Hong Kong based China Labour Bulletin carried out a survey of the causes of labour disputes in China.[22] Of course, each dispute is specific and, apparently, has its own particular causes. However, the CLB is concerned to point out that each of the three major factors it identified have been greatly exacerbated by the year-on-year decline in China’s industrial output.
The most common factor is employers seeking to move their factory to take advantage of cheaper labour elsewhere – moving to inland China or, even, Bangladesh – some of them attempted to sell off equipment and flee the scene, not only leaving Chinese workers with no job but attempting to avoid payment of wages owed, statutory redundancy and other obligations. Claims for compensation give rise to about one third of all disputes.
The second most common factor is attempts to reduce labour costs by, for example, re-classifying Saturday and Sunday working as ‘normal hours’ so as to avoid paying double time for weekend work, or ending weekend working and forcing workers to work extra overtime during the week which is paid at a lower rate. Many workers get a pay raise only when the local government increases the minimum wage, but employers are, more and more, attempting to claw back any such increase in pay by reducing, or even eliminating, housing and other allowances, or by cutting bonuses. Another technique is to delay the payment of workers so that they work not a week, but a month in arrears. Problems with wage arrears and overtime payments account for about a quarter of all strikes.
The third most common cause are straightforward claims for an increase in wages to compensate for increases in the prices of consumer goods, rent, etc. Claims for wage increases account for about one fifth of all disputes.
The above ratios refer to factory workers and the experience of other sectors will be different. For example, teachers in the smaller cities and villages are often poorly paid, especially when compared with civil servants and other public employees with the same experience and qualifications. It is not unusual for teachers to go several months without being paid at all. CLB recorded 69 teacher strikes over the period of its report the great majority for payment of wage arrears and increases in pay.
In most factories the actual working day is at least ten hours (including compulsory overtime) and rest days are provided only if there is a break in production, such as during the low season. In the event of a rush order, employees are required to work 12 hours/day in sequential shifts. The situation in many factories is that employees work at least 72 hours each week, far more than the total allowed by Chinese law (40 hours each week, and 36 hours overtime work per month).
It is to be expected that under such conditions, accidents at work are commonplace. Indeed, the International Labour Organisation has stated that, officially, about 380,000 Chinese workers die annually in industrial accidents, but industry is characterised by gross under-reporting:
… (T)here were more than 20,000 industrial and mining enterprises with occupational hazards problems in Dongguan (a major export centre on the Pearl River Delta in Guangdong Province). They employ more than 5.5 million workers, but only 6,000 enterprises report occupational hazards to the related government offices. The State Administration of Work Safety only monitored 280 of these …[23]
Possibly the most extreme conditions are to be found in the construction industry which, in 2010, employed about one-third of all migrant labourers. Safety standards are appallingly low. Even in Hong Kong, scaffolding for high rise buildings can be no more than lengths of bamboo tied together with what looks like string. A major reason for the transient nature of the construction workforce is that, in 1984, the government introduced new regulations which made it an offence for construction companies (especially those under state-ownership) to retain permanent on-site staff. From then on the norm has been for workers to be hired by sub-contractors who recruit teams of cheap, unskilled migrant workers from rural areas.
It is normal for workers employed by sub-contractors to work on subsistence wages, expecting to receive their pay as a lump sum at the end of the year. The big problem, especially in the construction industry, is that many sub-contractors simply disappear at the last moment leaving the workers without even the means of returning home. This scandal of unpaid wages is the cause of over half of all China’s strikes, many of which have resulted in violent clashes between furious workers and police.
The PRC has begun to recognise the unsustainability of this situation and in 2008 enacted the Labour Contract Law which accords some workers the right to challenge their employers in the courts. However, those worse hit are effectively excluded from this process because the worker must have a contract before his/her case can be heard, and in some SEZs – and in the construction industry – nearly two-thirds of the workers do not have one.
A second barrier is the obvious anti-worker bias of the great majority of court decisions. Local government finances depend heavily on the success of local enterprises. Hence, the resulting intense competition between localities for outside investment has sensitised local courts to the needs of employers, such that enforcement of labour laws is patchy. However, there is every likelihood that a higher court (or the CCP) will overturn any judgement in the workers’ favour: “Under these circumstances, workers’ rights often end at the courtroom door.”[24]
Many barriers have been erected to prevent workers ever reaching that courtroom door. Before a case can be presented to a court, workers must first go through a mandatory arbitration process, and for the few who possess a contract, that process is complex and lengthy.
It can take a journey of several hours to reach the relevant Ministry building, and having done that it can take days of petitioning, and being sent from one department to another before the correct bureau is found, invariably crowded with other workers seeking redress. If more than five of the applicants appear at any one time they are guilty of an illegal gathering and can be arrested (as the Artigas workers found, see Section 16.3) and, if migrant labourers, stripped of their residence permits and returned to their villages. The workers must argue their own case against professional lawyers and whatever the court decision, there is invariably a lack of will by the local government to enforce it and the workers often end up worse off.[25]
The same obstacles are placed in the paths of any women who seek legal redress for breaches of China’s anti-discrimination laws, with the addition that lawyers screen their cases to avoid this type of dispute because of their low fee potential and limited access to legal aid.[26]
The traditional ‘labour aristocracy’ of the Chinese working class was in heavy industry and mining, and it is these workers who have suffered most under the so-called reforms. The means used to carry through the privatisation of the giant SOEs included such promises as being kept fully informed of all relevant plans, substantial redundancy payments, of being found new jobs and of payment of large sums of money obtained from the sale of the enterprise.
Many, if not most, workers received none of these things. Instead local officials, enterprise managers and privateers proceeded to plunder the state assets for personal gain. According to official estimates, since China first began restructuring the SOEs, state assets valued at between 80 and 100 billion yuan have been embezzled annually.[27]
In March 2007, the vice-chairman of the ACFTU, Xu Deming, stated unpaid wages owed by SOEs which had been ‘restructured’ amounted to over two billion yuan, together with a total of as much as one billion yuan in unpaid compensation. He further noted that in enterprises that had been privatised, 25% of the laid-off workers were not receiving any form of social security benefit.[28]
To redress their grievances the workers were encouraged to use the so-called petitioning process whereby citizens, either individually or collectively, can appeal to the authorities over specific grievances. In China this is a well-established procedure. But it is a system that serves as a buffer protecting government officials, absorbing the petitioners’ anger but without any meaningful outcome. For laid-off SOE workers it was a bureaucratic trap, with complainants being sent off on an endless paper chase as bureaucrats passed the buck and covered each other’s backs. When the wrongdoing was by a government department the accused person was a high-level official or business associate of the government, cases were quietly shelved.
Worse, the system generally meant petitions ended up in the hands of the organizations and officials being complained about, and who might be the employers of the complainants. Thus, petitioners could be putting themselves at risk of retaliatory action by those targeted in the complaint.
In parallel with petitioning, workers were taking their cases to the courts. But all too often the case would include government officials and government departments who were also often direct beneficiaries of the privatisation. As the number of privatization dispute cases rose rapidly China’s senior judicial authorities instructed the courts to stop hearing such cases. On 26 March 2006 the All-China Lawyers’ Association directed its members that if they took on a collective case then they had a responsibility to “actively assist the judicial authorities”, that is to collaborate with the accused against their clients.[29]
When they discovered that the system served to shield the corrupt and, possibly, expose complainants to the risk of retaliation, the workers soon lost all faith in it. As a result, many workers proceeded with their own actions, just about every SOE restructuring/ privatisation programme led to some kind of dispute with the laid-off workers demanding payment of wages owed, payment of a pension, medical insurance and social security benefits, along with assistance promised in securing re-employment.
Left with little alternative the workers were forced to demonstrate on the streets to make their demands heard. However, many of the local government officials and Party tops were personally involved in the privatisation deals and saw these worker demonstrations as a threat to their own positions which, of course, they presented publicly as a criminal threat to “political stability”. Using their influence with the police and judiciary they attempted to have the demonstrations broken up and banned and the activities of the protest leaders arbitrarily punished. Under Chinese legal procedures the police can hold protestors charged with criminal offences for an extended period of time, weeks, months and even years without trial.
Between 1998 and 2001, workers at the Ferro-Alloy Factory submitted numerous petitions to a wide range of government bodies accusing plant manager Fan Yicheng and others of embezzlement, but received no response from any of them. Fan was only investigated after more than 10,000 workers took to the streets in March 2002 and publicly pressured the government to take action. The strike leaders attempted to spread their strike to neighbouring factories and for this were arrested, beaten up and jailed for subversion and terrorism.[30]
Disputes arising from the privatization of SOEs have typically dragged on for many years, as local governments, the courts and the ACFTU failed to address the widespread injustices committed against workers in the course of restructuring. Indeed, these long-running collective labour disputes amount to a festering sore. Leaders in the fight for workers’ rights have been silenced, persecuted and imprisoned, while the grievances of those they represented have been ignored by those in authority and laid-off workers have been left to fend for themselves.
So great and obvious was the divergence between the promises and reality that it brought the officially-recognised trade unions and the labour laws into disrepute. And there is ample evidence that Chinese workers, especially women migrant workers, are increasingly prepared to by-pass these laws and self-organise: to go on strike, demonstrate in public, and take direct action such as blocking major roads, even wrecking offices or work completed.[31]
The then President and Party Secretary Hu Jintao and Premier Wen Jiabao, concerned that such hard line measures were not reducing the number of independent labour actions, introduced a softer approach and launched a campaign calling for a “harmonious society”.
Now, it is not uncommon to see court staff racing to a flashpoint where workers are publicly protesting, in desperate attempts to defuse the situation and restore social stability by giving free advice on how to take the dispute through the courts. For the time being the police are being reined in and while strike leaders are still being arrested and demonstrations broken up, any deaths are seen as a ‘mishandling’ of the situation and a blot on the career of the Party top responsible.[32]
Harmony as a social ideal has roots in the paternalistic and hierarchical ethics of Confucius. Efforts have even been made to harmonise Confucius with Marx, but this is something that can be achieved only by entirely eliminating Marx’s concepts of class struggle and revolution. The appeal to Confucianism is intended to give modern concepts a veneer of Chinese exceptionality and promulgate the idea that the PRC is following a uniquely Chinese path for the good of the country as a whole.[33]
The appeal to “social harmony” has meant that the regime has had to offer concessions to peasants and workers. In respect of the peasants, the government has reduced taxes, raised prices for farm products and provided subsidies; whereas for city workers, it introduced a substantial increase in the minimum wage in May 2015. Simultaneously, in both rural and urban areas the regime promises the expansion of educational provision and healthcare services. The government is also pledging a significant improvement in pensions provision – no doubt hoping to enlarge the internal market. Great publicity is being given to bringing the most openly corrupt of the CCP cadres to justice and there have been some high profile trials. The need to appeal for social harmony is a façade to convince workers, especially, to trust the CCP leaders and do nothing to threaten the present system.[34]
The state also excuses itself to the working class by presenting its current economic problems as being shared worldwide, that the solutions proposed are common to all workers internationally. For example, Britain’s ‘Workfare’ programme was used as an example to support China’s own plan to deny benefits to workers who do not join re-training schemes.[35]
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CLB, The Workers’ Movement in China 2011-2013, clb.org.hk.
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Dongguan Daily, 2 Aug, 2011.
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Pun, The Role of the State… Op. cit.
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Yang Su and Xin He, Street as Courtroom, Law and Society Review, 44(1)157-184, March 2010.
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Burnett, J. Women’s Employment Rights in China…, Indiana Journal of Global Legal Studies, 17(2)289-318, Summer 2010.
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Li Jinhua. Auditor-General of the National Audit Office PRC, Radio Free Asia, 30 September 2006.
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CLB, No Way Out, clb.org.hk.
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Ibid.
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Ching Kwan Lee, Against the Law: Labour Protest in China, University of California Press, 2007.
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Pun, N. and Xu, Y. Legal Activism or Class Action?, China Perspectives, No 2011/2.
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Yang Su and Xin He, Street as Courtroom, … Op. cit.
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Weil, R. A House Divided: China after 30 Years of ‘Reforms’, Economic and Political Weekly, 43(52)61-69, Dec. 2008.
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Ibid.
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Blecher, M. Hegemony and Workers’ Politics in China, The China Quarterly, No. 170 (Jun., 2002), pp. 283-303.