Worker Empowerment E-newsletter issue 12/2009
30thDecember, 2009 WE-News:
Two Years to Fight for a Fair Trial and Verdict for Huang Qingnan and Shenzhen Worker Centre, China
It has been two years since China labor activist Huang Qingnan almost lost his leg to an attack on 20 November 2007. The founder person of the Dagongzhe Migrant Worker Centre (hereafter DGZ) in Shenzhen China was attacked in broad daylight for his work educating migrant workers about their labor rights.
It has been two years to fight for a fair trial and verdict for Huang Qingnan and DGZ with the persistent support from the general public and various international groups in condemning the violent attacks, endorsing the statement, writing letters, donating to and visiting DGZ and Huang Qingnan. All of the solidarity has made it possible for DGZ and Huang Qingnan to go through the most difficult period. However, in the past 2 years, the situation on DGZ and Huang Qingnan has still been tough.
The result of the second verdict on Huang Qingnan was still disappointing. In July 2009, the Shenzhen Intermediate People’s Court gave a lenient punishment on the murderer and the master mind while refused to recognize Huang Qingnan’s condition as the level 6 disability as the first verdict. The murderer and the master mind were reduced their penalties from 5-years imprisonment to 4-years imprisonment, 5-year imprisonment to 4-years imprisonment respectively. One of the criminals had been released in August. Based on the excuse that the disability identifications on Huang were invalid, the court only ruled the compensation claims on the medical and several minor expenditures on Huang Qingnan with a lump sum of RMB96,869.89. The disability compensation, cost on disability-aid tools, living subsidesand psychological damages were dismissed. Six months have gone by, however, Huang is yet to receive the compensation.
In August 2009, DGZ and Huang Qingnan were constantly under various kinds of harassment by unknown people. Huang Qingnan’s vehicle was deliberately punctured while he was out for work. On the same day, two notices displayedat DGZ were torn off by unknown persons. DGZ urgently decided Huang Qingnan to withdraw from the frontline duties in Shenzhen to protect his personal safety, while DGZ continues to struggle for daily labour services. DGZ reported these intimidations to the local Police and the Authorities but received no reply at all. Since then DGZ has been receiving sexual harassing phone calls by unknown males.
In September 2009, Huang’s appeal to the Shenzhen Intermediate People’s Court for retrial was rejected. It then puts the case in deadlock. According to the second verdict, the master mind will be released in the coming January. Early this August, DGZ was told the master mind has spent 1 million and got released.
Worker Empowerment believes the rejection of Huang’s level 6 disability certification is violating the legal regulations and provisions. The continuous intimidations towards DGZ demonstrates the ineffectiveness of theChinese laws and its implementation in protecting the most in need. In contrast, they are helplessly exposing to violence.
Worker Empowerment will continue the fight for social and legal justice for Huang Qingnan and the working people in China. In this regards, Worker Empowerment would like to urge friends, brothers and sisters of international community for continuous support.
Please contact us by firstname.lastname@example.org for details.
The first survey on the implementation of China’s Labour Contract Law (LCL) in the Pearl River Delta region (PRD) was conducted by Dagongzhe Centre (DGZ) in April 2008. The DGZ conducted a follow up survey from 17 April to 20 May 2009. The survey this time extended the geographical coverage to Yangtze River Delta region (YRD) to explore the issues faced by workers of PRD and YRD respectively and in the hope that survey findings could contribute to effectively reviewing the provisions and execution of the LCL. This research aims to raise public and government concern for labour issues to strengthen review and monitoring of the LCL.
The survey covers six industrial zones in cities along China’s coastal region: Shenzhen, Dongguan, Huizhou, Suzhou, Hangzhou and Shanghai. 600 questionnaires were completed on the streets of the industrial zones by low level workers who were selected by the methods of convenience sampling. Among them, 537 valid questionnaires were completed. Of the cases observed during the survey, three typical labour disputes were selected for in-depth interviews. Only responses from workers employed at the time of the survey were counted in the analysis in order to reflect the views of actively employed workers. 80% of the respondents were low level workers. Among them, 57% are unskillful workers and 23% skilled; 327 male and 189 female. More than half of respondents are aged between 17-25 years old. The majority of respondents received only a junior high school or vocational school education. 75% of respondents have signed labour contracts while 25% have no written contract with their employers.
A significant finding is that the LCL is insufficiently implemented to comply with the law even though the superficial situation is improved compared to the similar survey by DGZ in 2008. In 2009, the superficial finding is that more workers have signed labour contracts than in 2008. But if we look deeper into the process of signing contracts and their content, both surveys reflect the imbalance of power in industrial relations and this needs to be addressed properly. Employer misconduct and efforts to escape the requirements of the LCL are increasing and contribute to ineffective enforcement of the law. Publicity and execution of the law by the government is insufficient. The result is that very few employers are penalized for violations of the law. It is no surprise then that survey respondents’ perception of the LCL’s effectiveness is low. This situation hinders workers’ efforts to know and claim their rights. The LCL is not fulfilling its intent to reverse the current imbalance in Chinese industrial relations.
Nonetheless, generally speaking, respondents are positive that the LCL improves their situation. Since economic development, the impact of the global financial meltdown and the development of civil society are different in the YRD and PRD, workers from the two regions face different situations. Working conditions in YRD were found to be better than those in the PRD, and this suggests the government of the former region is more able to implement the LCL. If local governments of the two regions were to share experiences and resources to effectively implement the LCL, Chinese labour rights could come closer to international standards of labour rights.
1. Employers avoid the LCL, disabling worker rights
1.1. Increase of employer misconduct, soft tactics to force workers to resign and renounce layoff compensation
The survey reveals that there is a change of renewal contract with the long working year workers since the LCL took effect. 42.07% of more senior workers in PRD and 66.67% in YRD were denied contract renewal. This is a serious violation of the law, since LCL requires employers to sign non-fixed term contracts (or “open-ended employment contracts” in LCL) with workers who’ve worked consecutively for 10 years with one employer. Among the forms of misconduct, 60% of respondents mention common tactics like employers moving to a new factory, not “re-hiring” existing employees but hiring workers from human resource firms with employment contracts set to expire upon completion of a specific job or developing new punitive rules to justify job termination. All of these tactics contribute to shorter term labor relations.
1.2. The percent of respondents having a written labour contract in the PRD is 67.30% and 83% in the YRD. Few respondents have a permanent contract
On the whole, about 75% of respondents report having written labour contracts with their employer in the YRD and PRD. The common contract period is one to three years. 8% of respondents have permanent contracts. Enterprises with or below 100 employees were found unlikely to sign labour contracts at all.
1.3. Employers manipulate the content and signing process of labour contracts while workers have no bargaining power at all.
In processing labour contracts, 65% of respondents are not informed and do not discuss the contents of the contract with their employer (This figure is 50% and 79% for YRD and PRD respondents respectively). Respondents reported that employers in PRD more frequently do not comply with basic elements of the LCL. Employers from the PRD required 30% of respondents to sign two different versions of their contracts and 56% of respondents from that region were not given a copy of the contract.
1.4. Substandard contract: labour rights and occupational hazards are not stipulated in contracts
The LCL requires all employers to stipulate basic coverage in every labour contract. However, the survey reveals the content of contract is often vague and ambiguous. 50% of respondents who have written contracts in PRD said that there is no statement about the hazards of their work in the contracts. And 25% of PRD respondents were unaware of the occupational hazards and required personal protection equipment for their work. This poses a serious risk to occupational safety in the PRD. Some contracts list the items required by the LCL, but these items are left empty. The employer’s information very often only refers to the employer via abbreviations or a nickname; the employer’s address might not include a detailed address and only mention a district such as Shenzhen. Job descriptions are sometimes stated simply as, “according to the production arrangements of the factory”. Employees’ names are spelled vaguely. All these ambiguities have adverse effects for workers in the event of labour disputes over occupational injuries, layoffs, relocation of factories and so forth. Legal processing will be difficult even if there is written contract at hand.
1.5. Real working conditions do not meet the conditions stipulated in written contracts, a tactic that most respondents tolerate
20-30% of the PRD respondents suggest their working conditions deviate from the conditions specified in their written contracts. 10% in YRD respondents reported similar arrangements.
Among 371 respondents, 20% respondents express tolerance for these differences; 5% of respondents opt to resign when situation gets intolerable. 35% will continue the job while seeking other alternatives: hunting for a new job and resign with a new employer (15%), complaint to upper officials (9%), complaint to the related government departments (6%), or contacting affected workers to lodge a collective complaint with the employer (5%). Most respondents’ tendency to tolerate violations of the law is reinforces employers’ willingness to violate the law.
1.6. Using soft tactics to force termination of employment without layoff compensation
60-70% of respondents opted to resign when terminating their previous employment. 50% of the respondents in the two regions suggest their employers added new factory regulations since 2008. This left workers more vulnerable to termination on the basis of violating factory regulations, which permits the employer not to pay layoff compensation. This termination strategy is prevalent in the PRD, with 70% of respondents referring to such soft tactics were appeared in their working place. In the YRD, 85% of respondents did not get the statutory layoff compensation of one month of wages per year of service, while 12% got the payment. Many workers do not know they’re entitled to layoff compensation when a contract expires. Also, respondents do not know how to define “illegal dismissal”, and employers frequently use soft tactics to force workers to resign.
Below is one account from respondent, Mr. Lee:
“In April 2009, the factory closed for the holiday. The shop floor was locked and some 80 workers left at once. Wages were paid but not the layoff compensation! The factory in charge was found and we asked for the layoff compensation. He, on the contrary, scolded the workers. Workers took photos of the evidence and lodged a complaint with the Labour Department. The Labour Department asked workers to submit written evidence to process the case. It is impossible for workers to present written evidence, so they dispersed helplessly.”
2. Basic wages only represent half of the monthly income. Basic wages are insufficient to support family basic living
Basic wages in YRD are found higher than PDR. The average basic wage of former is 958 Yuan; 830 Yuan for the latter. The survey shows that the basic wages are close to the statutory minimum wages of the different districts.
The average income of respondents in the YRD is 1606 Yuan while it is 1417 Yuan in the PRD. The ratio of the basic wage to monthly income is 58% in the YRD and 55% in PRD. It can be inferred that half of respondents’ income is from overtime and/or other living allowances or benefits. Most respondents stated that their basic wages are insufficient to support basic living and family expenses, and their income largely depends overtime.
3. Workers have some but limited knowledge of the LCL
The majority of respondents know they are entitled to a copy of a labour contract. But many do not know that employers who refuse to sign written contracts are liable to pay damages of double the wage amount. In the YRD, only 39% of respondents know of this punitive clause, 25% do not believe it and 36% do not know about it. Workers’ knowledge of the LCL is stronger in the PRD with 61% of respondents knowing of the punishment for employers who refuse written contracts. 70% of PRD respondents know of the clause that requires employers to pay damages equivalent to twice a standard layoff compensation for illegal dismissal (twice the one month of wages for every year of employment). 65% of respondents in the two regions know that the LCL requires new factory regulations to be discussed thoroughly in the employee congress. 30% of respondents were not familiar or did not understand this clause. Almost half of respondents in PRD and YRD are not aware of the law’s requirement that “employees in employee congresses have the right to recommend the trade union to negotiate a collective contract with the enterprise”. Many respondents showed limited knowledge of their rights stipulated in the LCL.
4. Open lies to challenge the legal justice system, circumvent the LCL
The survey reveals some workers’ legitimate rights are rejected in the course of litigation. One presiding judge said, “Our superiors’ instructions are that the internal “new three rules” are applicable to all current labour dispute cases”.
“Liu has worked many years in a Shenzhen factory that never signed a labour contract with him. In January 2009, Liu finally learnt of his rights and sued the factory for double wages as stipulated in the LCL. In April 2009, the arbitration committee dismissed his claim. It stated the factory offered Liu a labour contract in August 2008 but Liu refused to sign it, and he should therefore bear the responsibility of having no written contract with the factory.”
In Liu’s case, we have to refer to the Articles 82 of the LCL and Articles 5 and 6 of the Regulation on the Implementation of the Employment Contract Law of the People’s Republic of China. If Liu refused to sign a labour contract, according to the LCL, the employer should terminate labour relations with Liu not later than the end of January 2008, rather than continually employ Liu until January 2009. According to the LCL, responsibility for not signing a labour contract belongs to the employer, and not Liu. Liu is therefore entitled to economic compensation.
After the “three new rules” applied, according to the Article 21 of the “the Guangdong Supreme People’s Court  No. 13 document”: “From the date of employment, for labour relations of more than one month but less than a year, if the employer has sufficient evidence to prove the failure to sign a written contract is exclusively the workers’ responsibility, and the employer is without fault, the employer need not pay double wages.” It is difficult for workers like Liu to fight for their rights in this unfavorable situation. The local courts only accept evidence from employers Furthermore, survey respondents report that employers seek out lawyers to help them “imitate workers’ signatures on fake labour contracts” to win lawsuits and avoid paying worker double wages for not having written contracts. DGZ has noticed from labour disputes in Shenzhen in the second half of 2007 that lawyers were employed to give false testimony to win lawsuits concerning overtime payments. Such illegal behavior is spreading as employers seek to circumvent their legal obligations. This is a serious challenge to China’s system of social and legal justice.
5. Conclusions and recommendations
Geographically, implementation of LCL in the PRD and YRD differs. The survey suggests that PDR working conditions are worse and the LCL is less effectively implemented than in the YRD. Likewise, PRD respondents show a higher rate of dissatisfaction to current working conditions than respondents in the YRD. Survey results do suggest that some workers have experienced improved working conditions including the ratio of workers having written contracts. However, employment conditions are worsening on a number of issues including the labour contract signing process (employers give no explanation of the content of the contract), contract contents (employers develop unreasonable additions to labour contracts, factory regulations, new punishments; and decreasing the basic wage which is explicit in the contract while increased less visible and less dependable allowances), incongruities between actual working conditions and contract conditions, terminating workers to circumvent statutory compensation, etc. Employers are deploying all kinds of methods to circumvent corporate social responsibility and labour laws. In response, workers tolerate the unfair situation on one hand, and seek alternatives to claim back the rights on the other by using other methods like sending complaints to upper officials (9%), complaints to relevant government departments (6%) etc. A minority of workers contact other affected workers to lodge collective complaints against their employer.
This survey reveals a number of problems in connection with the LCL. A number of factors affect the enforcement of the LCL and the defense of workers’ rights including economic development of the region, corporate social responsibility, the commitment of local government and NGO participation in labour law publicity and education. Tackling the problems mentioned here to fulfill the intent of the law will require all stakeholders’ attention and actions. Below, DGZ wishes to present the following recommendations and hopes to see a positive response on these issues in the future.
5.1 Strengthen education for factories and workers on the LCL and workers’ democratic participation; encourage civil society’s active participation in LCL monitoring.
The survey suggests that most LCL publicity and education is carried out by trade unions and NGOs. The government should encourage the organizations such as trade unions and NGOs to:
a) Regularly launch LCL publicity and educational activities in industrial areas to support official publicity. In turn, these organizations can inform the government and society of workers’ opinions;
b) Regularly launch union education in industrial areas to encourage workers’ democratic participation in unions and active monitoring employer misconduct.
A premise of the above recommendation is official recognition of NGOs’ legitimate role. The government should provide a reasonable registration procedure to encourage NGOs’ social function to complement the role of government bodies. NGOs are rooted in communities and have a good view of workers’ issues from the front line. Strengthening NGOs’ capacity in labour law counseling, labour education, occupational safety and health education will raise labour rights consciousness, enhance workers’ mutual help networks and build a more harmonious community.
5.2 Intensify LCL enforcement, heavy penalties against violations
The survey finds that respondents in the PRD show a low degree of satisfaction towards government’s enforcement of the LCL. On a scale of 0 to 8 (the lowest being 0; the highest, 8) 26.19% of PRD respondents give government departments a satisfaction score of 0; 74.21% give a score 4 or below. The low satisfaction rating is most definitely linked to poor execution of the law. Reforming the existing system to improve accountability is recommended. Officials will become more directly accountable if they are delegated to a specific industrial area to carry out regular factory investigations and the officials and their departments bear full responsibility for any problems with LCL enforcement that are unknown to them.
The PRD and YRD are densely populated with factories and workers. To implement the LCL effectively, governments in two regions are recommended to share experiences and resources to support one other’s efforts.
5.3 Drive social actors to promote collective contract and collective bargaining on wage
In Nov 2009, a seminar on “Collective bargaining: theory and practice” was hosted by Shanghai Federation of Trade Unions and Shanghai Federation of Enterprises. Wang Xiansen, the speaker from Labour Relations Department of Shanghai Federation of Trade Unions Management and Vocational Institute (Gong Hui Guan Li Zhi Ye Xue Yuan) said, “The most effective measure to balance the capital sided industrial relations and unregulated working relationships is the collective contract.” He further suggested, “A collective contract not only serves to protect workers, but also creates a reasonable system for workers amid tense and conflicting industrial relations.”
Government departments, trade unions and NGOs should intensify publicity and education on the subject of collective contracts and collective bargaining of wages among employers and workers. A system of collective contracts and collective bargaining of wages should be established with democratic elections of worker representatives and open factory/enterprise policies.
New ongoing violations after the implementation of
Labour Contract Law in China
–Calling workers to learn the labour legislations actively
–Calling the society to pay close attention on workers’ rights
–Calling the government to monitor the law implementation and enforce severely
Wrote by Shenzhen Dagongzhe Migrant Worker Centre
Translated by Workers Empowerment and IHLO
Since 1 January 2008, the PRC’s “Labour Contract Law” has come into effect, which shows the government’s focus on re-adjusting labour relation and its dedication on safeguarding workers’ legal rights and interests.
After several months, it is time to ask, have workers’ legal rights and interests been effectively protected? In order to understand the effect of the law, Shenzhen Dagongzhe Migrant Worker Centre conducted a survey and interview workers in different areas of Shenzhen city, together with several invited civil organizations. In total 320 valid questionnaires, out of 380, were returned. Ten workers were invited for in-depth interviews, as the organization intended to know certain specific phenomena better, and nine valid interviews were done. From the results, we could tell that the unbalanced power relation, sometimes detrimental, between workers and employers still maintained. Even in the wake of the Contract Law, some employers continue to turn a blind eye to the new law, coming up with new “trick”. There is the summary of the major violations:
I.All sorts of peculiar labour contracts
Some employers translate the labour contracts into English, knowing that ordinary workers could not read English. Example, Mr. Yu, works at a foreign-invested toy factory, says “in the process of signing the labour contract, most workers didn’t know the English contents, so at first, we all refused to sign. Later, the management forced us to sign it, they said the contract was for one year (the real term is for two years) and we could quit the jobs whenever we want to. So most of the workers signed it, but I didn’t because I couldn’t read it.”
2.Two contracts at a time
Mr. Pan, a skilled electrician in a Hong Kong-invested enterprise, reveals, “The basic monthly wages at the factory is set at 1,500 Yuan. However, the factory required me to sign two identical contracts, each of them saying our basic wages is at 750Yuan per month, so in total, it is the same 1,500 Yuan. Other technical workers also had to sign two contracts.” To divide the 1,500 Yuan wages into two separate contracts and using only one of them as an official contract, the factory calculates the overtime wages at a half-rate and saves a significant social security premium. After the launch of Labour Contract Law, enterprises tend to use this “trick” to reduce the overtime payment for workers.
3.6 six-day a week, each day 6.7 hours
“According to your contract, how many hours do you work per day?”, workers usually answer this question with dissatisfaction, “the legal standard is set at 5 day and 8 hour a day. However, the enterprises divide 40 hours into 6 six days, each day our shift lasts 6.7 hours. In this case, we don’t get overtime payment for the 6.7 hours we work on Saturdays.” Such a practice shows that some enterprises try to interpret the law for their own interest, to avoid paying overtimes wages, which most workers work extremely hard to get it.
4.Incomplete or even blank contracts
From the survey, 3.8% of the contracts do not provide the location of employment, 10.6% do not state a clear job description, some workers report that they were offered to sign a blank paper and 5.9% of the contracts are blank contracts. It is rather risky for workers to sign blank or incomplete contracts.
Some employers even covered the content of the contracts, only showing the signature areas to workers to sign. Mr. Sun from a plastic factory said, “the company covered the contents of the contracts and asked us to just sign. At first, we all refused to sign as we found it unreasonable. However a week later, the management said those who refused to sign would have an one-month wages deduction, so we were then forced to sign.”
5.Two different stamps on the labour contracts
In our in-depth interview, Mr. Li, 28 years old, said, “since January 2008, our factory gave us contracts to sign, they even agree to give us un-limited timeframe contracts. But we saw the stamps of two different legal entities on the contracts, so we all refused to sign. The factory put out a notice, saying that workers who refused to sign contracts by 31 January would need to take unpaid leave. The factory later threatened the workers that they would be dismissed without compensation if they didn’t sign contracts. At the end, most of the workers other than 23 them signed the contracts”
It is rather common for a company to register several subsidiary-companies under it. When one subsidiary committed any violation and workers take it to court, the parent-company would unregistered the company in questioned and transfer the other workers to another subsidiary. The behaviour of Li’s factory, to have two different stamps on the contracts, may suggest something suspicious.
II.Abuse and manipulate the factory regulations
1. Price hikes on meals and dormitory
The survey shows that 22.2% of workers suffered from an increase in the price for food and accommodation. Ms Yang from a toy factory said angrily, “our food charges have gone up to 250 Yuan a month. We heard that minimum wages has been increased and therefore the employer would charge us more for food and accommodation. But we have less overtime work now but a higher bill on food and penalties. How come our government doesn’t regulate the price on food anymore?”
2. A growing list of penalty items
The survey shows that 22.3% of the workers told that the items of penalty have gone up. 57.2% of the workers said they did not agree with those regulations. Mr. Sun, a some 30-year old puncher at a metal factory said, “our factory regulation says, 50 Yuan fine for a minor mistake, which includes late for work for a minute or verbal argument with supervisors. For major mistakes, like arguing with the manager, the fine goes up to 200 Yuan. The factory often sends us warning letters and each warning letter costs us 50 Yuan. The second warning letter means dismissal…”
III.The Enforcement of the Labour Contract Law is not so Sanguine
1.Many factories still not offer a contract to workers
General lack of contracts amongst local invested, small factories, 73.4% of workers from the survey said they had signed a contract (though they have all sorts of problems as mentioned above), while 26.6% of workers still work without contracts. 41.9% of local-capital factories and among small-scale factories, i.e. less than 1000 workers, 35.8% of them do not offer contracts to their workers. For larger factories, i.e. with more than 1,000 workers, only 6.1% of them do not sign contract with workers.
2.28% of the contracts with wages lower than legal minimum wages
The survey shows that 28% of the contracts offer monthly wages lower than 750 Yuan, and 51.60% of contracts offer wages between 750 and 1,200 Yuan. Starting from October 2007, the legal minimum wages for outskirt Shenzhen was set at 750 Yuan and it would be increased to 900 Yuan on 1 July 2008. The legal minimum wages is the bottle line for workers to live and factories fail to live up to that standard, how could they talk about workers’ personal development?
3.Falsehoods between the contracts and reality
When we asked the workers “are there any falsehoods between the contracts and the reality at workplace?”, a majority of them, 63.83% said their work hours are different from the contracts, 4.26% said they work in a different location than stated on the contract, 3.19% revealed there are difference between factory names and other types of differences reach 11.70%.
IV.Calling for better implementation, join hands by all sectors of the society
The survey shows that 79.2% of workers are dissatisfied with the situation in the factories. It shows that the labour contract law needs further and better implementation.
1.Circumvent is never a solution
As a company, deducting workers’ wages and avoiding the overtime payment as a mean to operate, instead of improving their technical level, creativity and management skill, which tends to exploit workers to keep up in competition is not a sustainable move. They would soon either be punished by government or would lose workers, suffer from the so-called labour shortage. Currently it is established to have 740,000 workers short in Shenzhen, which is a warning to the enterprises, telling them that if they want to develop, they would need to be law-abiding and establish a correct direction of development.
2.Calling the workers to get familiar labour legislations
As a worker, aware of their own rights, methods to safeguard themselves could help themselves to combat with their employers, at labour departments, at courts, by clearly telling their demands. It is the only effective way to get the Labour Contract Law fully implemented.
3.Close attention to workers’ rights from all sectors in the society
Workers are the creator of social wealth, as well as the motivity of social development. As a member of this society, we all have responsibility and obligation to pay close attention to labour right and the workers’ condition. If most of the workers cannot enjoy a sustainable life, it definitely will impact on the stable and development if the society. Furthermore, if the worker cannot develop and build up their capacity, it will limited the overall development of the society as well.
4.Calling the Government for strengthen on promotion, monitoring and enforcement
In this research, it clearly showed that large scale of illegal practices is still exist in the labour contracts signed. If we ignored the voice of the workers and only concentrate on the rate of contract signed, it will definitely lead to misapprehend. The workers know about the illegal situations in the factories most clearly. Therefore, the Government should pay more attention to the actual situation of workers and listen to their voice; at the same time, encourage the people’s organization such as the trade union, women federation, and civil groups to display their function on promotion, communication, facilitation and monitoring of Labour Contact Law. Meanwhile, the Government could set up clear incentive payment to encourage the social groups and individuals to report the illegal enterprise.
Since the Labour Contract Law came to effective, “tricks” happened frequently in those illegal enterprise, these acts not only undermined the legal right of the workers, but also defied and trampled down the Law. In front of such a rigorous situation, we are calling the workers to get familiar labour legislations; calling for a close attention to workers’ rights from all sectors in the society; and, calling the Government for strengthen on promotion, monitoring and enforcement
Worker’s View on new Labour Contract Law & Research on Furniture Industry in Pearl Delta Area
Workers’ Skepticism on the enforcement aspect of the New Labour Contract Law
Workers Training and Education are urgently needed for Substantial Worker Protection
On 29 June 2007, the 10th session of the National People’s Congress (NPC) Standing Committee (the Committee) passed the Labor Contract Law (the Law). This Law will take effect on 1 January 2008. The Law was first submitted to the Committee for reading on 24 December 2005. The second draft was released for public consultation on 20 March 2006. Following its release, the NPC then received over 19,000 pieces of public opinion (the second highest number since the establishment of the People’s Republic
Chessboard for Labour Protection and Enterprise’s Interest
From December 2005 to June 2007, players from the business sector, especially the multinational cooperates were extremely active in lobbying for the law, the American Chamber of Commerce and European Union Chamber of Commerce in China both expressed similar concerns on the issue of a potential cost increase which may ultimately led to the removal of foreign investments in China when the law takes effect on 1 January 2008.
Although the NPC said that over 70% of the opinions received were sent by individual workers, those workers still suffered from serious power imbalance since they were not organized. With the view to influence and participate in the law making process, workers have also encountered difficulties in engaging in a direct dialogue with officials and the mass media. As such, there is indeed no doubt that workers are in an extremely fragile position that urgently calls for a level playing field.
Objectives of the Law
Two of the most important objectives of the Law is the regulation of labour contracts and the standardi zation of the compensation level for termination. Article 14 of the law stipulates that if an employee has served over 10 years or two fixed-term contracts, the employers must sign an open term contract with her/him in order to provide the worker with a stable employment. Meanwhile, if the employer did not sign a contract with the employee, then the lack of a signed contract will be deemed as having open term contract with her/him.
The level for compensation that is to be awarded to aggrieved workers in cases where his/her employer violates that law is also clearly stipulated in the Law. Article 82 of the Law stipulates that where an employer fails to sign a contract with a worker, the employer will have to compensate the worker with an amount
double his/her wage. Likewise, in cases of unfair or illegal dismissal, workers are also entitled to double his/her wage.
The New Law is Not Flawless
First, the appendix of the Law states that the economic compensation on the termination of contract will be calculated from 1 January 2008. In other words, even if a worker had served the same employer for 20 or 30 years, she/he would only be entitled to 2 weeks to one month’s salary as compensation if their contract terms end in 2008. The new Law is absurd in the sense that it does not take into account the service years of a worker prior to 1 January 2008.
Second, the amended Article 41 of the Law is also defective in stipulating that if an employer was to lay-off more than 20 workers or 10% of its staff, the employer should “listen” to the opinions of the all its staff, instead of simply “getting their permission” as compared with the said draft. Commentators believed that this is a critical setback.
Enforcement Remains as Workers’ Ultimate Concern
Despite of the undeniable flaws inherent in the new Law, mainstream commentators unsurprisingly appear to welcome the new Law. Workers who are supposed to benefit from this new Law on the other hand are not that optimistic. According to a public opinion survey conducted by the China Youth Daily, only 5% of the interviewees believe that the Law can protect their labour rights for sure, while 74.3% believed that the protection of their labour rights under the new Law is heavily dependent on the relevant government departments’ implementation measures.
The result of the survey was not surprising to many workers and NGOs working on labour issues in China, since it basically reflects the real experience of every worker in China. At the moment, most of the workers in the Pearl River Delta (PRD) do not receive minimum wages and overtime payments. What is even more appalling is that even if these workers religiously follow every step of the administrative process in claiming back their overdue payments or compensations from their employers, they rarely get what they theoretically under the Law are entitled to. Workers under this regime have long been victims of administrative inaction by the labour department. We believe that it is really about time to have the theoretical aspect of the law align with the practical implementation of it to benefit workers at the grassroot level.
New Law, New Wrestling
Since the passing of the new law on 26 June 2007, Human Resource Departments in the corporate sector had carried out numerous trainings and studies for the adaptation to the new law and searching for loopholes to “minimize” the labour costs. The first battle relates to economic compensation upon the termination of a contract. Based on the Shenzhen Labour Contract Law, employers do not need to compensate their workers if the labour contract is discontinued or not extended. This article will soon be invalided once the new Law takes effect on 1 January 2008 . From 1 January 2008, employers will have to pay for compensation amounting to one month’s salary for every year of service regardless of whether the termination of contract happen during or by the end of the contract term.
Cases of non-continued labour contracts for workers with more than ten years of service were reported frequently this year. It is argued that this kind of corporate tactic is used to benefit the corporate bosses prior to the passing of the new Law. Nanfang Gongbao, a union newspaper in Guangdong, reported that factories
in PRD area already triggered a wave of “kick the old workers out”2. A month prior to the passing of the new Law, an electronic product factory had dismissed over 500 workers while their contract term ended in May. In addition, the factory also exhausted all means to force its 300 workers with open term to resign by themselves. Tactics used by the factory owner include transferring the workers to unfamiliar position, or degrading them by asking them to act as factory gatekeepers and excoriating them in front of their co-workers.
The multinational corporate also joined this battle. Coverage3 reported that KFC, an American fast food chain had recently dismissed an old worker with ten years of service when his contract term ended on 20 June, eight days before the Law was passed. The worker was a full-star trainer who had obtained more then ten
awards, including “high quality”, “best staff”, “customer satisfying”, etc. It is widely believed that this case is a reflection of the corporate’s intention to shrink their legal and social responsibility.
More Training is Needed to Gear up the Workers
While employers are busy manipulating the law, workers remained almost clueless as to how to go about defending their rights under the new Law. During a labour law seminar in WE’s partner labour centre in Shenzhen, workers showed no very limited knowledge about the new law, as well as little confidence on the successful implementtation. The new law means a new learning process for the workers to pick up this
tool to re-claim their right and attain to the compensation and stable working condition, therefore, as a labour NGO concerned Chinese migrant workers, how to string up the daily experience and the legal right, so to help the workers explore the route for right re-claiming will be the challenge for WE and the partner organizations
on the Labour Contract Law issue.
In the coming future, WE will join hands with the partner labour centre, to provide training of trainer to equip the volunteers and local crew members for legal knowledge and build up the worker’s point of view to the new law. Thus, the learning experience and conclusions will be adopted in the outreach labour education activities, labour law seminars and factory visits.
Extensive and Serious Labour Problem in the Furniture Industry
Call for Legislation and Inspection
In December 2005 to April 2006, WE and its migrant worker center partner with in Shenzhen carried out a research in the furniture industry in order to stir up discussions among furniture industry workers and to find ways to improve their working conditions and . The methodology of this research involved in-depth interviews and surveyed workers from over 15 furniture factories selected randomly to analyse the labour conditions and workers’ rights in the industry.
Based on our findings, labour problems in the furniture industry are very common and these problems has great ramification on every part of a worker’s life. Problems we have identified include:
Factories commonly adopted complicated wage system with low
Long working hours and unpaid overtime work;
Poor food and living condition;
Illegal deposit and unlawful wage deduction;
Factory rule as a tool for illegal wage deduction;
Lack of labour insurance protection;
Insufficient fire prevention facilities;
Lack of leisure time and facilities;
Infrequent and notified inspection have no effect;
Active and varied responds form workers reflect urgent need for improvement.
Utilisation of complicated wage system with low transparency
We found that it is not unusual for factories to use a complicated wage system with low transparency. For instance, among the 15 factories that we investigated, only four of them by their workers by hourly rate
and four of them pay their workers by piece rate. The remaining seven factories paid in mixed rate by selecting the most profitable rate during the peak and low season to control and maximize the production by the workers. During peak season, these factory owners, pay their workers in piece rate to promote quantitative production, and only pay their workers on an hourly rate without paid leave to minimize the labour cost. This is a clear example where factories can easily transfer their business risks to the workers and forced them to bear the unstable income level. Interestingly enough, regardless of whether these workers are paid on an hourly basis or by piece rate, they all have one thing in common. All of the workers that were interviewed and surveyed all have one common denominator, that common denominator is their unawareness as to how their wages are calculated. The problem of not knowing what kind of formula is used to calculate their wages are proven to be one of the greatest obstacles workers face when making a labour
Long Working Hours and Unpaid Overtime Work
Overtime work is widespread among the factory workers. They usually work overtime for 3 to 5.5 hours per day, They also do not have leave on weekends. Ten of our respondents reported that they do not have any sort of rest day arrangement per month. 8 out of 15 reported that they do not receive any overtime payments. In cases where they do receive some overtime pay, these are nonetheless far less than the legal standard.
Illegal deposit and Unlawful Wage Deduction
We also found that most of the factories classify their workers into two kinds: experienced and inexperienced. This is done so in order to curb the wage of inexperienced worker below the legal level. Another interesting finding is that factory owners usually require workers to pay a deposit prior to entering their workplace. In two of the factories that we looked at, workers’ identity cards were withhold as a tactic to control their workers. These factories usually deduct part or of the entire wage of that mobth if a workers leave their
factories, as well as they deduct the wage by irrational, law-violating “factory rule” and forced the workers leave the factories themselves, to avoid the economic compensation according to the service year of the workers.
Factory Rule as a Tool for Illegal Wage Deduction
The workers believed that the so called “factory rule” were concern about “penalty”, “fine”, and “control”. Workers were told that if they want to apply for an unpaid leave, then the factory would deduct one more day’s wage as fine. For every minor mistake, 30-50 RMB (US$ 5-6.5) is deducted. For major mistakes, 100-200 RMB (US$13-27) is taken off, while their total monthly income is around 1000-1500 RMB (US$120-190).
The regulation is also designed to control the workers’ leave entitlements and the reassignment of workers. It is also perceived that the regulation is a means to control workers’ freedom of movement at work.
Infrequent and Notified Inspection Have No Effect
Only three factories had labour inspections, but with prior notice. When a factory receives such notice, they are able to prepare for the inspection. As part of this preparation, workers are required to clean the entire workshop with no overtime pay. So really when the inspector comes in, they do not see the real state or condition of factory workers because any mess have already been cleaned up. Workers also be ordered to told a standard answer to the inspectors, and would be fined or fired if the factory owner found that they told the problems of the factories.
Call for Improvement though Legislation and Effective Inspection
Our research shows that the working condition and remuneration of factory workers in the furniture industry is appalling. Such conditions creates extensive distress and disaffection to the workers, ,As a response to these problems, we believe that substantial improvement is urgently needed for a harmonized labour relations. Our recommendations are as follows:
Accelerate the legislative process for specific industries to provide legal protection that suit the needs of the industrial workers;
Lobby for a detailed regulation to restrain the wage deduction by factory rules, and this regulation should be implemented by the Labour and Social Protection Department;
Enhance the occupation safety inspection of the furniture industry on labour insurance and precaution, to protect the workers and safeguard the worker can obtained reasonable compensation if there is any injury events;
Reinforce and the quantity and quality of inspection by more often and sudden inspection, and sending inspector though recruitment process for active evidence collection;
Increase the penalty and punish the illegal factories severely to ensure the receiving and amount of workers’ remuneration.
Worker Empowerment E-newsletter (issue 1/2007)
24 April, 2007
WE-News: Highlight of Present Labour Rights Situation in South China
Research on the Labour Situation of Migrant Workers in the Construction Sector of ShenzhenAmong the large population of migrant workers who have come from poor rural areas and have gone to Shenzhen for job opportunities, quite a number of them work in construction sector. They build the icons of modern cities, such as high-rise buildings, roads, factories, etc. However, the migrant workers in the construction sector experience a lot of difficulties in the labour process, such as unpaid work, lack of employment evidence, poor occupation safety and health protection, difficulty in getting proof of occupational injury, etc.In mid-2005, Worker Empowerment (WE) worked with a community worker centre in Shenzhen, doing research on employment protection, occupation safety and health protection, and the workers’ understanding of the legal protection and administrative interference of the local government. Through this research, WE aimed to locate solutions to the problems and facilitate the self-protection of legal right of the migrant workers in South China.There were 82 valid questionnaires collected from the workers in construction sites, and 8 questionnaires from injured construction workers in the hospitals. All the interviewees were male, most of them aged from 25 to 49, and all worked for less than half year in the construction site where they being interviewed. These were some of the basic findings: 1. The Basic Living Conditions in the Construction Sites
All the workers were living in the construction sites they worked in. The workers’ responses did not reflected high demands regarding living conditions and food; in most cases, they felt that they were impossible to change and a shelter was enough. 2. Strength of Work, Wage and Working Hours
Most of the workers reported that the job was physically affordable. They basically had no holidays and had to work for long shifts. 76.8% of them had to work 30 days a month; 84.1% of them work 9-12 hours a day. Many workers perceived that it was a ‘normal’ length of working hours, and only 35% of the workers interviewed were able to receive overtime work wages. Furthermore, none of them received the special allowance for construction workers according to the law (e.g., for working in high temperatures).
Payment of wages was highly irregular in construction sites. Most of the workers (42.7%) could only get paid when the project finished; others (20.8%) mainly were paid by the end of the year, while some others were paid every season or after completion of one floor of construction. In some cases, the workers did not even know when they could be paid. The extremely long wage period adversely impacted on the workers, and showed that the protection of workers is very weak under such an unhealthy wage system.
3. Occupational Health, Safety and Protection
Among the 90 interviewees, 20% of them experienced or were experiencing occupational injuries. The protection varies in small-scaled construction sites and construction companies: for small sites, 80% of the workers have no safety measures, only 10% of workers reported that they had a safety helmets or safety nets; for those working for construction companies, around 60% of them could obtain safety helmets or safety nets, while some others had hand gloves or safety ropes.
Even working in such a workplace that lacks protection, over half of the interviewed workers did not feel that the protections at the construction sites were insufficient. This reflects that the consciousness of occupational safety of workers was very weak. At the same time, not many interviewed workers joined the insurance scheme, especially at the small-scaled sites, with only 5% of workers joining the private insurance scheme, and having the insurance fee deducted from their wages directly.
4. Legal Protection, Monitoring and Execution
According to the research, 29% of the interviewed construction companies’ workers said that there were safety or quality inspections at the sites, but only 2.5% in the case of workers at small-scaled sites. This showed that inadequacy of safety inspection was a significant problem, as well as the lack of transparency and involvement of workers.
Most of the workers did not realize which Government Departments were responsible for the construction site inspections. When there were violations to their rights, workers tended to negotiate with the boss directly even though only 25% of them received any compensation afterwards.
Of the workers interviewed, 48.8% knew that there was improper behavior or incidents going on at the sites, and they knew that they could report them to the Labour Department; however, most of them (65.9%) never thought of reporting it, because they did not feel their right were being violated, were worried that it would take a long time, were afraid of getting into trouble or did not think that it would be useful.
5. Legal Knowledge of the Workers
Most of the workers did not know much about their legal rights. Only 11% of them heard about the Labour Law before, and only 6% could mention some right they were entitled to, such as standard working hours (8 hours per day). The others were ignorant of the law protecting them.
6. The Situation of Injured Workers
Among the workers, 20% had experienced or were experiencing occupational injury. The research found that the perception of occupational injury of the workers is different from the general understanding. They believed that it was ‘normal’ and ‘unavoidable’ to have some ‘slight injury’ and they tended to handle the ‘slight injury’ themselves. Therefore, there were a lot of hidden occupational injuries in the industry.
Among the 8 injured workers interviewed in the hospital, more than half of them came from a construction site without any safety measures. It reflected that lack of safety measures was the significant factor in the level of occupational injuries. Injured workers also had to work for 12 hours a day, without safety measures, insurance, or inspections from the Government departments.
Among the 8 hospitalized workers, only one of them received wages and allowance for food, medical services and nursing; among the 7 workers who had no wages, 2 did not even have nursing allowance, and 1 had neither food nor medical service allowance. For those who worked for construction companies the remuneration was relatively better, because the companies had insurance. For those who worked at small-scaled sites, they even had to apply for proof of occupational injury on their own, hence, leading to a longer time for settlement. 7. Recommendation
Amend the Construction Law, to respond to the urgent problem of lack of labour protection for construction workers; Strengthen the monitoring and regulation of the construction sector, including safety and quality inspection, and respect andimprove workers’ right to know and participate in it; Regulate the wage system and payment according to the specific situation of the industry; Reinforce the occupational safety and health at the construction sites monitoring the implementation of social security and the follow-up of injured workers; Review the subcontract system in the construction sector.