Sat Oct 14th, 2006 at 04:20:38 PM EST
I must have been in high school the first time I signed up for Portside, an American Left Internet reading list, an act that I'm certain has placed me on other lists as a consequence. And those of you who've been here for a while are aware that I'm a big fan of irony, when wealth and power fail in spite of the advantages they have, I'm even more entertained.
There was a convergence of sorts in my mailbox this morning when I got this Portside article about a new labour law being proposed in China that would grant local branches of the government trade union, All China Trade Union Federation (ACTUF), collective bargaining power, and create offer workers greater employment protection by making it more difficult to fire workers. The irony involved in corporations moving production from nominally capitalist regions like the US and EU to nominally communist China, and then complaining when the country actually stands up for workers strikes me as extremely ironic.
Some of the world's big companies have expressed concern that the new rules would revive some aspects of socialism and borrow too heavily from labor laws in union-friendly countries like France and Germany.
Among those raising obejctions were not only American corporations, but also the European Chamber of Commerce. As an expert quoted in the piece states, if existing labour laws were actually enforced the pay of migrant workers who produce goods for Western markets would likely rise by 50% or more. As Tim Costello of Global Labor Strategies notes corporate objections to the new law lay bare the idea that economic growth alone is sufficient to raise living standards.
"You have big corporations opposing basically modest reforms," said Tim Costello, an official of the group and a longtime labor union advocate. "This flies in the face of the idea that globalization and corporations will raise standards around the world."
There is a corporate class that spans the globe, and as much as they profess allegiance to the rule of law, the secret of their success has been that they've been able to break laws and regulations without consequence while bemoaning the lack of flexbility in labor markets.
A closer look at the full report issued by Global Labor Strategies shows jus how modest the proposed reforms are, they would essentially raise Chinese labour standards to the level found in most European countries, hence the objections of global corporations, and the slant at European social model.
Contract protections for all workers
The new law would create an implied contract for any worker who receives a wage, giving millions of workers rights and benefits now denied them. It stipulates that any ambiguities in the interpretation of a contract will be made in the employees'favor. AmCham opposes these provisions on
the grounds that, "These provisions are not consistent with the recruitment system of modern enterprises."11 Instead, companies want to set pay and terms of work for all workers without signed contracts unilaterally. Management alone would determine "All problems...such as pay confirmation, the way of handling the social
insurance, the method of dismissal and the standard of compensation."
Collective bargaining with employees
The new law provides for negotiations over workplace policies and procedures, layoffs, health and safety, and firings with a union or an "employee representative." Foreign corporations demand unilateral authority, not negotiation.
Freedom to change jobs
Non-compete agreements are a regressive feature of US and other western systems that have crept into the Chinese economy. They prevent workers from changing jobs easily if they have access to proprietary knowledge as determined by an employer. For a developing economy like China, knowledge transfer is essential. The new law caps damages employers can seek for workers who change jobs, makes it more difficult to claim confidentiality has been breached, and allows for geographic exemptions to foster the spread of skills throughout the country.
Limited probationary periods
Currently corporations can set probationary periods unilaterally, often for an entire year, keeping people in a highly precarious employment status. The new law sets standard probationary periods of from one to six months depending on the type of job.
Payment for training
Under current practice employees sign a separate contract that allows companies to recover any training costs if a worker terminates his/her employment. Under current law almost anything that management considers "training"--including many of the kinds of on-the-job training that are standard for any new job--can be subject to re-payment, leaving a departing worker either in debt or, if unable to
repay the training expenses, bonded to his/her current employer. The new law limits costs employers can recover by, for instance, defining "training" as instruction that takes place "off-the-job," on a full-time basis, and lasting for at least 6 months.
Companies oppose the new law because "the employer would not be entitled toclaim compensation from the departing employee for [on-the-job and other types] of
There is theoretically no at-will employment in China; all workers are supposed to have labor contracts--although in practice many do not. Most contracts are for a "fixed term," after which an employer can dismiss a worker without penalty and a worker can leave without penalty. This system encourages highly unstable employment relationships. The new proposal encourages stable employment by requiring employers to provide severance pay to workers whose contracts end, but not to those whose contracts are renewed. Management opposes this provision as "most unreasonable."17 A pathway from temporary to permanent work Chinese companies employ a large number of temporary workers hired through temp agencies. Temporary work encourages management to avoid the protections and commitment that come with standard employment. Under the new law, temp agency workers would become permanent employees after one year of employment at a client firm, thus reducing the number of insecure, contingent jobs. According to the companies, "This stipulation impedes the right of the employer to find the best person for the job and will reduce the flexibility of human resource allocation."18
A fair system for lay-offs
In practice corporations frequently lay-off workers at their own discretion. Under the new proposals, corporations would have to lay people off on the basis of seniority. Management opposes seniority based lay-offs in part on a novel argument: "It is a discriminative policy against the new staffto fire them while they work for the [same] enterprise as the old staff."19
There's a very simple reason why this law is being proposed now. Labour unrest in China has been rising for several years, and it's very clear that the Chinese government is fearful that unless actions are taken to provide workers protections within existing institutions, workers may feel the need to create their own paralell institutions that threaten state power. Above all else stability is preferred, and with the indications are that the ACTUF has been infilitrated by serious and sincere labor activists. By changing from within the neededs adjustments cen be had by reform and not revolution, and that's a beautiful. It's just a shame that American and European companies are fighting this so hard.