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Trade unions need update
By Jiag Jingjing (China Business Weekly)
Updated: 2004-12-19 13:37

China's top trade union organization is urging multinational giants to allow establishment of trade unions in their Chinese companies.

The All-China Federation of Trade Unions (ACFTU) has vowed to spare no effort on pushing unions forward although "the phenomenon of turning down union requests widely exist in China."

An ACFTU official, who only gave his name as Dong, told China Business Weekly that more than 90 per cent of conflicts between employees and employers happened in companies without unions.

"Unions work as a bridge to communicate between employees and company owners to deal with conflicts, and therefore protect workers' rights," Dong said.

Most State-owned enterprises have unions. However, the situation in private firms is quite different.

Statistics from the Standing Committee of the National People's Congress indicate only 32.7 per cent of employees at private enterprises join unions.

There were 743,000 private enterprises in China, with 25 million employees by the end of last year, according to a survey released by the ACFTU.

Dong pointed out that Wal-Mart had claimed it had never established any union for its worldwide operations, and, therefore, it has no plan to set one up in China.

Guan Huai, a consultant for the drafting of Trade Union Law, said: "What multinationals fear is that employees will take advantage of unions to fight against company owners, which will make management difficult."

Meanwhile, foreign companies take advantage of the incomplete law system in China. Trade Union Law states that companies should set up union branches and that employees can voluntarily join them, but it does not require companies to push forward union branches, which makes it difficult for the ACFTU to find any legal base to sue firms without unions, some experts say.

Dong said the ACFTU is not going to place any lawsuits against those firms, but the federation will continue to urge firms to set up branches.

Experts urged the ACFTU to improve the way trade unions work.

Yang Tiren, professor with the School of Labour Relations and Human Resources, under the Renmin University of China, said: "The focus should not be on whether companies should set up unions or not, but rather if they have effective communication systems."

His comment came after ACFTU blamed some world famous big names for not allowing to set up unions in their Chinese operations.

Those companies include Wal-Mart, Kodak, Dell and Samsung.

Unions, which have played an important role to protect employees' rights in the last century, should also be advanced with new elements to improve work efficiency, Yang suggested.

"Advanced human resource management should be added on the top of unions' responsibilities. Conflict needs to be replaced by co-operation," said Yang.

The international trend is to use effective human resource management measures to resolve conflicts, rather than strikes and arbitration, Yang told China Business Weekly.

"The government should not worry too much if the formality ( of setting up unions) is completed or not, but rather focus on firms having established an effective human resource management system," Yang said.

Yang added two important reasons for "no unions in foreign companies."

"Owners worry that the union will slow down efficiency. With experiences dating back to the last century, when the power of employees was too strong, workers will shift a lot of effort from working to fighting against owners, for higher salaries and better working conditions," Yang said.

The other concern of foreign companies is that China's unions, rather than independent organizations, are all affiliated to ACFTU, which is a State-owned organization.

"Foreign firms are concerned that any political uncertainty will influence the position of the union," Yang said.

His opinion was echoed by an anonymous industrial insider. "Foreigners come to China to make business ... they do not want to get involved in any political issues."

Companies that are on the "blacklist" declined to tell any true reasons, but all of them denied that they are against unions.

Xu Jun, the US-based Wal-Mart's director of external affairs, said the company never claimed to be anti-union.

"We obey all China's laws and regulations. We have a very good mechanism of internal communication," Xu told China Business Weekly.

He admitted the firm does not have unions in the United States, and that their headquarters, so far, has not received any pressure from the public.

Kodak made exactly the same statement.

Ying Yeh, Kodak China's chairman, said in Xiamen when the firm celebrated its five-year presence in China, that the firm has been following "a complete open-door communication policy."

Each department has monthly meetings with staff to collect suggestions and demands, and those request are usually met, Yeh said.

In addition, Kodak China has an employees' club which functions similarly to the union.

"Actually, many of our staff in the past have worked in State-owned enterprises, which have unions; they do not find any difference in Kodak where there is no union," she added.

"We never stop our staff from setting up unions. If they wish to, they can. The company itself does not have the right to urge them to do anything," Yeh said.

Experts point out welfare systems in large foreign firms are normally good, and there are not many, if any, labour conflicts.

"The violation of workers' rights usually happens in small domestic private firms," Yang said.

"Multinationals usually strictly obey laws and regulations, and offer quite a good working environment."

In those small companies, people work for a merely amount of salary. It is difficult to organize them together to fight if conflicts happen, since none of them can afford to lose their jobs, Yang said.

"Those firms should be the target to push forward the unions, rather than multinationals," he said.

His opinion is echoed by an anonymous expert with the Institute of Labour Studies under the Ministry of Labour and Social Securities.

The expert said there is actually no difference in multinational giants, whether they have unions or not, since they have already have an advanced management system for human resources, such as South Korean giant Samsung.

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