Worker Empowerment
WE are excited to publicly announce our new publication at August, 2017.
New publication: Research Report on the Labor Condition of Service Industry Workers
劳动力八月出版：
服务业工人劳动状况调查报告集
PDF download here 点此下载 2017年服务业工人劳动状况调查报告集
(只有中文版Available in Simplified Chinese character only.)
For more details welcome email to workerempowerment@gmail.com
Job-seeking and Retraining needs for Middle-aged Displaced Workers in Shenzhen
Executive Summary
Full report in Chinese is available for download here. Acknowledgement to Shenzhen Migrant Workers’ Centre and student interns for their contribution to the investigation.
Industrial upgrading in Shenzhen in recent years have resulted in closure and relocation of numerous factories in labour-intensive industries. With little savings and social protection, middle-aged workers laid off face difficulties in looking for a new job and satisfy survival needs of themselves and their families. In this investigative report, we demonstrate that the situation of a group of former toy factory workers, who were laid off due to factory relocation, exemplifies the need of these workers regarding reemployment constantly ignored by the government and trade union.
Workers affected in this wave of layoffs are usually in their 40s, and have worked in the same industry for years. Their skill development has been highly dependent on production requirement of the factories. The toy factory workers, mostly female, are responsible for supporting the living costs of both their parents and children. Furthermore, due to the substandard practices of their employment in social security, they are not yet eligible for pension entitlements and are not ready to withdraw from the labour market.
These workers have substantial work experience in the toy industry. Many of them wish to fully utilise skills developed from their past work, but they face a variety of obstacles in job searching –
Current unemployment-related policies in Shenzhen do not fit the situations of these middle-aged workers. For instance, most workers who quit their job against their will or fail to provide proof of involuntary unemployment are not eligible for unemployment insurance benefits. The rate of benefit is also inadequate to support them over the job-seeking period. Local officials are ill-informed of related regulations to assist workers in going through procedures for job matching and skill retraining services. Policies assisting start-ups are highly inclined towards young and highly educated entrepreneurs in new and hi-tech industries, which are inadequate for the needs of middle-aged former factory workers.
We hereby propose the following suggestions for improving existing policies regarding reemployment –
Statement from Hong Kong Labour Groups on the Prosecution of Labour Activists in Guangdong
16th July, 2016
Guangdong labour activists Zeng Feiyang, Meng Han, Zhu Xiaomei and Tang Huanxing, who were arrested by Chinese police on 3rd December, 2015, were charged with “disturbing social order” by the People’s Procuratorate of Panyu District, Guangzhou Municipality in June and will be on trial in the near future.
In the December incident, more than 50 activists were interrogated and seven were detained or went missing. This prosecution is part of President Xi’s crackdown on labour activists and gravely threatens the survival of civil society in China. The detained were denied the right to meet with their lawyers. Relatives of the detained appointed lawyers to meet with the activists in detention, but police turned down their requests, either claiming that the activists had already hired their defense lawyers or without providing any reasons or documentary proof at all. Zeng Feiyang was not allowed to see his lawyer for six months and in the meantime was slandered in government controlled media. Worse yet, relatives of activists have been surveilled in their homes, violently harassed or verbally threatened.
We believe that the Guangdong police’s actions trampled on the judicial principles of fairness and justice, violated the basic rights of the activists, and seriously violated domestic Chinese law. Article 11 of the Universal Declaration of Human Rights states that “Everyone charged with a penal offence has the right to be presumed innocent until proved guilty according to law in a public trial at which he has had all the guarantees necessary for his defence”; Article 14 of International Covenant on Civil and Political Rights states that arrested persons have the right to “defend himself in person or through legal assistance of his own choosing”. “Own choosing” must be an autonomous decision made by the persons involved without threats, coercion or capitulation. The Principles for the Protection of All Persons under Any Form of Detention or Imprisonment expressly stipulate that any detained person “shall be entitled to have the assistance of a legal counsel” and “communicate and consult with his legal counsel.” The Constitution of People’s Republic of China states that “the accused has the right to defence”. Article 14 of the Criminal Procedure Law of the People’s Republic of China states that “the public security organs shall safeguard the procedural rights to which participants in court proceedings are entitled according to law.” Article 33 states that “he or his close relatives may file an application with the legal aid agency for help.”
International society will not forget the arrested activists. The four labour activists are now going to trial. On account of the violations of the arrested activists’ basic rights and the harassment and surveillance of their families by the Guangdong Police, we make the following public statement:
Signed by:
Asia Monitor Resource Centre
China Labour Bulletin
The editorial committee of Red Balloon Solidarity
Globalization Monitor
Hong Kong Confederation of Trade Unions
Labour Action China
Labour Education and Service Network
Students and Scholars Against Corporate Misbehaviour
Worker Empowerment
Disney has long emphasized magic in its products. Yet, for workers in Disney’s supplier factories in China, this magic has never worked. In reality, these workers are exploited by Disney: facing risks of having their fingers crushed by the old machinery and being exposed to chemicals and dust, they work long hours but earn low wages. These people have put in a great deal of effort to produce products, thus helping to sustain and spread the fantasy woven by Disney. However, their contribution has never been acknowledged – they even lack a proper and legitimate remuneration.
Mizutani (Shenzhen) Toy Factory Co. Ltd. (hereafter: Mizutani), a Hong Kong registered enterprise which mainly produced toys for Tokyo Disneyland, abruptly announced closure and relocation of its Shenzhen plant to the Philippines in June, 2015, at the request of Disney. According to China’s Labour Contract Law and Social Insurance Law, Mizutani still owed its 196 employees a total of 9 million Yuan of social insurance contribution, economic compensation (severance compensation) and housing provident fund. However, Disney only agreed to pay workers 500 yuan for each year of service as a “living allowance”, which was less than one tenth of the actual compensation amount. With the assistance of trade unions and labour organisations, workers made repeated requests for a meeting with Disney over the past year. But Disney turned a blind eye to them.
In fact, workers in other Chinese supplier factories of Disney face the same exploitation. On 14th June, 2016, Students & Scholars Against Corporate Misbehaviour (SACOM) issued an investigative report, revealing the poor working conditions of workers in Disney’s supplier factories in China: workers worked over 10 hours a day on average, with 1 day off a week. Some even worked 144 hours of overtime in a month, exceeding the legal limit of 36 hours a month as prescribed by Chinese Labour Law.
Besides employers’ request, the extremely low basic wage and per piece rate left workers with no choice but to work long hours in order to make ends meet. Long working hours, as well as old equipment and insufficient training, made workers more prone to injuries – a dozen accidents occurred within one month in one of the investigated factory’s departments. Worse still, injured workers were not properly compensated.
In a separate report, an investigation by China Labor Watch echoed that of SACOM’s, citing issues including long working hours, low wages and exposure to chemicals.
The labour organisations staged a protest at Disney’s CSR office in Hong Kong, calling for Disney to help Mizutani workers claim their missing compensation and to also improve the labour conditions in Chinese supplier factories. Again, Disney not only refused to comment, but also rejected to accept the petition.
It has been one month since the release of the reports – Shanghai Disneyland has already opened its doors to create a “magical” experience for thousands of visitors. But for the plight of Chinese workers and demands of labour organisations, Disney has still “kept their doors tightly shut”.
“Our dream comes true”, said Robert A. Iger, Disney’s chief executive at the opening ceremony of Shanghai Disneyland. But what about the dreams of workers?
Disney blatantly violated Chinese law and its International Labour Standards Programme – which required all its suppliers to follow local laws – and have shown a complete disregard for the lives of workers. We are enraged.
As the world’s second-largest media conglomerate, Disney ‘s revenue was over 130.05 billion in 2014, which is 3.14 million times a worker’s annual income at one of its supplier factories. Indisputably, this considerable revenue comes from workers’ contributions, and there is no reason for Disney not to protect them.
We demand Disney and its suppliers to implement the following:
1) Respond to the problems depicted by the investigative reports and open talks with workers and labour organisations
2) Fulfill its promise to protect workers’ rights across the supply chain: to investigate the Mizutani case and to help their workers claim their missing compensation, including double severance calculated by wages payable, in addition to premiums of workers’ social insurance and contributions to the housing provident fund (since commencement date of employment). If Mizutani fails to do so, Disney should bear responsibility for ineffective supervision, and compensate workers directly
3) Disney should introduce comprehensive changes to the labour conditions of supplier factories:
a) increase basic wage and overall income, pay overtime payments, ensure manufacturers sign official labour contracts with workers and make contributions to social insurance;
b) replace old machinery and provide workers with protective equipment and training, pay injured workers appropriate compensation;
c) ban the use of child labour, and adopt “equal pay for equal work” for dispatched and student workers;
d) organise a trade union at each facility in which the executive committee is democratically elected by workers;
e) disclose names and addresses of all Disney’s suppliers and allow the media and public to monitor
Signed by (in no particular order):
Students & Scholars Against Corporate Misbehaviour
China Labor Watch
Hong Kong Confederation of Trade Unions
Worker Empowerment
The extravagant, newly-opened Disneyland in Shanghai is no disguise for workers being exploited by Disney suppliers. Mizutani workers are still fighting for their rights regardless of the hostility of the Mizutani and Disney management. WE writes about that with other supporters of Mizutani workers on OpenDemocracy.
Shenzhen Dagongzhe Centre, Worker Empowerment’s partner organisation in Shenzhen, has just released a report on the impact of minimum wage on workers in Shenzhen in 2016. The report is published in Chinese, and an executive summary in English is also available.
Full text of the report in Chinese:
2015年深圳工人工资与生活开支调查报告
An Investigation on Wage and Living Expenditure of Workers in Shenzhen in 2015 – Executive Summary
Shenzhen Dagongzhe Migrant Worker Centre
May 2016
As the only legally binding wage rate at the moment, not only does the minimum wage guarantee income for workers in regular working hours, but also narrows down the income gap in society. Shenzhen Dagongzhe Migrant Worker Centre has long been advocating for a minimum wage rate which guarantees decent living for workers and is adjusted in a more systematic and transparent manner. In the past few years, regardless of the promises that the government makes to adjust the minimum wage rate progressively and have it linked to the local average wage, the minimum wage still fails to cope with soaring living expenses that workers bear.
A questionnaire survey was conducted between August and December 2015 to investigate working conditions and living expenses of migrant workers in Shenzhen, complemented by a focus group session for workers to elaborate on how their living expenditure is associated with wage and working hours, as well as strategies deployed by employers to cut labour cost. 89 valid questionnaires were collected. Workers participated in the survey work in the electronics, toy, metal, plastics, sporting goods, furniture, cleaning and service industries.
From the survey and discussion with workers, the significance the legal minimum wage in determining workers’ income is confirmed. The basic wage adheres to the legal minimum wage for almost 70% of the workers, which means that the annual or biennial adjustment of the minimum wage is the rare chance when their basic wage is lifted. It shows that most of their employers merely fulfill the minimal legal requirement in remunerating workers.
The minimum wage rate can hardly cover living costs in Shenzhen for most workers, partly because it does not catch up with inflation. Some of them cannot secure the minimum wage level after social insurance premiums are deducted from their basic wage. It is not new for workers to expand their income by working overtime, which severely endangers work-life balance. Nevertheless, some of them suffer from overtime work being cut as well due to recent economic slowdown. With the basic wage hardly enough for survival, they resort to resignation, which sets their employers free from paying them the economic compensation required by law. Apart from overtime payment, the employers also play an upper hand on other variable components of workers’ wage such as bonuses and subsidies. For instance, some employers start charging workers on accommodation, and making bonuses conditional upon harsh conditions. Therefore, it is important for the legal minimum wage rate to satisfy needs for a decent living, so that workers can be shielded from the risks brought by the unpredictability of variable payment.
In the midst of the investigation, there has been widespread news about nation-wide economic slowdown and rising labour costs. The Guangdong provincial government took the move to freeze the minimum wage rate in the coming 2 years. We believe that among many factors of the economic slowdown, workers already living on a shoestring should not be held responsible for that. Freezing the minimum wage would only further widen the income gap and strengthen social inequality. In order to secure workers a fixed wage which covers basic needs under the uncertainties at work, we urge the government to:
Full report: “Suppliers Escaped: Disney Abandoned Mizutani Toy Makers Viciously”
This is an independent case report documenting a series of violations of labor rights in a manufacturer of Disney-branded products in mainland China, namely Mizutani (Shenzhen) Toy Factory Co. Ltd. This case demonstrates how Walt Disney has not been successful in fulfilling its corporate citizenship goals for managing a responsible supply chain. It is important for the public especially the customers to pay attention to the workers’ sufferings behind the Disney-branded products.
The primarily evidence collection and analysis of this report has been prepared by Worker Empowerment (WE) since the second collective dispute broke out in June 2015 and completed jointly with Hong Kong Confederation of Trade Unions (HKCTU). All the information on the labor disputes of Mizutani were compiled from first hand sources from Mizutani workers, official and public record on the company profile, laws and regulations as well as views from experts.
Major Findings
1. By underpaying social insurance contribution, severance compensation and unlawfully dismissing workers, Mizutani has violated China’s Labour Contract Law and Social Insurance Law.
2. The livelihood of 196 Mizutani workers has been severely affected by the sudden factory closure. Most of these middle-aged workers have served in Mizutani between 10 and 20 years and seeking new jobs would be a big challenge for them. Missing social insurance contribution would leave them no pension and this would create serious trouble when they retire.
3. Walt Disney Co.’s International Labour Standards Programme requires all its suppliers to follow local laws, they are specifically required not to threaten workers and respect freedom of association (including rights to organize and collective bargaining). However, it has ignored Mizutani’s grave violations of the above-mentioned labour rights. Those include:
a. Violations of Chinese labour legislations: Mizutani is moving to the Philippines and is financially sound. Yet, it deliberately violates Labour Contract Law and Social Insurance law and owes workers some 9 million Yuan.
b. Rejection of collective negotiation: since the announcement of the closure of the factory, workers had requested to negotiate with Mizutani but it refused.
c. Denial of workers’ rights to organize: out of desperate, workers launched a strike and road blockage. They were violently taken away by riot police and 23 workers were detained.
d. Refusal of paying severance compensation and threatening workers to “voluntarily resign”: when it announced to close its Shenzhen plant in June 2015, it forced workers to sign “voluntary resignation agreements”
4. Walt Disney Co. has been informed of these labour rights violations and the dispute at Mizutani through formal complaint and media exposure, yet it has only reacted to this dispute through emails, phone calls and a non-constructive meeting. Until now, no formal investigation has been seen and no solution has been provided to these violations.
Key Recommendations:
1. Disney must investigate the case and fulfil its commitment to workers’ rights across the supply chain and help the Mizutani workers reclaim their missing compensation in the wake of the company’s abrupt factory closure in June 2015.
2. Mizutani unilaterally terminated workers’ labour contracts. By law, it should pay double severance compensation and Disney should pay the missing part of the compensation, which should be calculated by wages payable.
3. Mizutani must pay the missing premiums of workers’ social insurance and housing provident fund since their dates of commencement.
Mizutani (Shenzhen) Toy Factory Co. Ltd., a Hong Kong-registered enterprise producing for Tokyo Disneyland since 1997, announced its sudden closure and relocation to the Philippines in June 2015. A total of 9 million yuan of severance compensation, social insurance and housing provident fund payments covering 196 employees has been in arrears. The livelihood of Mizutani workers, among which a lot of them are middle-aged and find looking for a new job challenging, is seriously affected by the sudden change.
Worker Empowerment (WE) and the Hong Kong Confederation of Trade Unions (HKCTU) have been assisting Mizutani workers in their protests against Mizutani and Disney and subsequent rounds of negotiations. So far Mizutani simply agree to settle the dispute with one tenth of the compensation to which workers are entitled according to the Labour Contract Law and Social Insurance Law, and workers refuse to accept such an unlawful compensation. Disney in Japan and USA has remained silence since a symbolic meeting with WE and HKCTU in mid-July 2015, regardless of repeated demands for their intervention.
This case demonstrates how Disney has failed to fulfill its corporate responsibility. The report titled “Suppliers Escaped: Disney Abandoned Mizutani Toy Makers Viciously” jointly published by WE and HKCTU aims at disclosing how Mizutani and Disney violate Chinese labour regulations and its betrayal to frontline workers. It is important for the general public, especially customers of Disney-branded products, to pay attention to workers’ suffering behind them.
The full report is available here, with an executive summary.
Key findings include:
1. By underpaying social insurance contribution, severance compensation and unlawfully dismissing workers, Mizutani has violated China’s Labour Contract Law and Social Insurance Law.
2. The livelihood of 196 Mizutani workers has been severely affected by the sudden factory closure. Most of these middle-aged workers have served in Mizutani for 10-20 years and seeking new jobs would be a big challenge for them. Missing social insurance contribution would leave them no pension and this would create serious trouble when they retire.
3. Walt Disney Co.’s International Labour Standards Programme requires all its suppliers to follow local laws, they are specifically required not to threaten workers and respect freedom of association (including rights to organize and collective bargaining). However, it has ignored Mizutani’s grave violations of the above-mentioned labour rights, including:
a. Violations of Chinese labour legislations: Mizutani is moving to the Philippines and is financially sound. Yet, it deliberately violates Labour Contract Law and Social Insurance law and owes workers some 9 million Yuan.
b. Rejection of collective negotiation: since the announcement of the closure of the factory, workers had requested to negotiate with Mizutani but it refused.
c. Denial of workers’ rights to organize: out of desperate, workers launched a strike and road blockage. They were violently taken away by riot police and 23 workers were detained.
d. Refusal of paying severance compensation and threatening workers to “voluntarily resign”: when it announced to close its Shenzhen plant in June 2015, it forced workers to sign “voluntary resignation agreements”.
4. Walt Disney Co. has been informed of these labour rights violations and the dispute at Mizutani through formal complaint and media exposure, yet it has only reacted to this dispute through emails, phone calls and a non-constructive meeting. Until now, no formal investigation has been seen and no solution has been provided to these violations.
We strongly demand for the following actions of Mizutani and Disney:
1. Disney must investigate the case and fulfill its commitment to workers’ rights across the supply chain and help the Mizutani workers reclaim their missing compensation in the wake of the company’s abrupt factory closure in June 2015.
2. Mizutani unilaterally terminated workers’ labour contracts. By law, it should pay double severance compensation and Disney should pay the missing part of the compensation, which should be calculated by wages payable.
3. Mizutani must pay the missing premiums of workers’ social insurance and housing provident fund since their dates of commencement.
The Labour Contract Law of China, which aims at regulating employment and protecting workers’ legally abided rights, has been in controversy since its implementation in 2008. Recent trends in industries, such as factory relocation from well-developed coastal areas due to industrial upgrade and the subsequent labour disputes, also the employment of dispatched workers becoming popular in factories, show the need to strengthen legal protection for workers. An amendment of the Labour Contract Law was introduced in July 2013 to serve this function, but the effectiveness is yet to be observed.
As a grassroots labour organisation based in the Pearl River Delta, Worker Empowerment concerns about the welfare of workers in the manufacturing sector and supports their right-defending efforts. Therefore, following our long-time interest in the Labour Contract Law, a survey to investigate its implementation in the Pearl and Yangtze River Deltas was conducted in 2014, in order to have a better understanding of how the law works to protect workers, particularly the dispatched ones.
The survey covers eight cities in the Pearl and Yangtze River Deltas, namely Shenzhen, Guangzhou, Dongguan, Huizhou, Shanghai, Nanjing, Suzhou and Jinhua. With the help of a number of labour organisations and university students, questionnaire survey and field study were conducted. 515 valid questionnaires were collected. Some case studies offered by the co-operating labour organisations were also adopted for analysis.
Among workers who completed a valid questionnaire for us, 60% of them are male. 70% are below 36 years old. A significant proportion of them work in electronics factories. 80% of them are formal workers, and the rest are either dispatched or temporary workers.
In general, 84.3% of the surveyed workers signed a labour contract with their employer. The proportion has increased in comparison with a survey of similar scale that we conducted in 2009, and is slightly lower than the figure officially announced by the Ministry of Human Resources and Social Security. However, it is shown that establishing an employment relationship in written form is still not a compulsory practice between enterprises and workers. A higher percentage of surveyed workers from big cities signed a labour contract, but the figure is significantly lower in lower-tiered areas. Enterprises of domestic capital are less inclined to sign a labour contract with workers.
The rationale of the Labour Contract Law is to establish a legal framework for stable employment relationship between workers and their employers. Labour contracts should also be signed under the prerequisite that both parties are entitled to equal rights to negotiate on contract terms. From the survey, however, many workers are not protected as such. For example, contracts are often incomplete, and the terms are not the same as what workers are required to do in the workplace in reality. Due to a low risk in violating the law, employers still tend to act in expediency. Examples include making working overtime regular, signing fixed-term contract with workers continuously, propelling resignation of workers to evade from paying compensations, and many more. The workers’ lack of knowledge and confidence in the law, as well as low capacity to fight against the employer collectively become an obstacle to tackle the problems from the deep root. They are also discouraged to strive for better working conditions and remunerations by renewing the contract.
In terms of employers’ malpractices related to labour contracts, some improvements are apparently shown over the years, but mostly in big cities. During the relocation of industries and labour power from coastal to inland areas, it is observed that the law is worse implemented in the latter, meaning that demonstrative effect of big cities is often limited. When improvements in coastal areas are achieved only after years of monitoring and supervision, whether inland regions would be benefited is still questionable.
The amendment of the Labour Contract Law has been implemented since July 2013 to regulate labour dispatch. Measures include keeping the use of dispatch workers within the bound of temporary, auxiliary and substitutive positions; ensuring equal pay of formal and dispatched workers; and setting a higher bar for starting a labour dispatch business. The Interim for Labour Dispatch announced in April 2014 also restricts the proportion of dispatched workers in an enterprise to 10%. From the survey, it is found that many enterprises still use an exceeding proportion of dispatched workers. Most dispatched workers do not know how their work nature is different from formal workers, and they are also generally less well paid.
Adding insult to injury, although more legal measures are introduced to regulate labour dispatch, the demand of enterprises on a flexible workforce remains high. Even if labour dispatch no longer works, hiring temporary workers and outsourcing still enable them to play down their role as employers. This makes it harder for workers to identify the party to be held responsible in case disputes arise in an employment relationship.
To strengthen the enforcement of the Labour Contract Law to protect the legal rights of workers, we reckon that the labour department should make an effort in the following perspectives:
This investigation may have its own limitations due to restraints in resources, but surveys as such from a grassroots perspective should continue. It is hoped that the survey would keep going year after year and extend to more regions, so that more workers would be better informed of the Labour Contract Law, fight for their own rights and ultimately benefit from it.
The full report in Chinese can be downloaded here: Labour Contract Law_WE_2014-7