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IBM and Nokia Punished Strikers
IHLO, 11 March 2014

More and more employers are minimizing the cost of corporate re-structuring by violating the due procedure in terminating contracts, observing only the legal minimal severance compensation, and stepping up the harassment and retaliation against workers who use strikes to obstruct the re-structuring. On 10 March, IBM Systems Technology Company (ISTC) sacked twenty workers for taking part in the strike against the merge with Lenovo. Two weeks ago, the 70 strikers sacked by Nokia (Dongguan) in the strike against retrenchment last year took their employer to the arbitration court, asking for reinstatement. Greater pressure is likely to fall on the judiciary as more and more strikes are driven by economic re-structuring, while the enterprise unions and federations are weak to protect job security and strikers against employers’ aggressive punishments.

IBM in Shenzhen sacked 20 workers in strike against restructuring

Twenty striking workers were sacked on 10 March by IBM Systems Technology Company (ISTC) in revenge for taking part in a strike to demand better severance package. ISTC in Shenzhen announced on 27 February the acquisition of its server service by Lenovo at US$2.3 billion, to be finalized in the next six months. ISTC promised the same work and pay conditions in the new contract after the merger and workers are given the choice between rounding off their severance compensation with ISTC according to law before 7 March, or preserving their seniority in the new contract.

It was not accepted by the workforce who took a strike on 3 March. Many workers employed under non-fixed term contract at ISTC fear that job security would not be protected under the new contract and more re-structuring are yet to come. They demand higher severance of two months’ salary per year of service and stronger protection on pension, maternity protection and body examination for those who would sign a new contract.

At the moment the Chinese law does not oblige the employer to economic compensation in M&As and corporate re-structuring if workers’ seniority and benefits are protected in the new contract. The labour bureau claims their hands are tied by the law. Whereas the provincial FTU of Guangdong province also confessed a year ago that it did not support workers asking for more protection if they object to the restructuring decision or the terms.

However many employers are not following due procedure stated in the Labour Law and Labour Contract Law to mandate prior information and consultation with workers and the enterprise trade union 30 days before terminating or changing the employment contract, provoking workers to go on strike and demand double compensation. Besides consultation on corporate re-structuring, the Trade Union Law also requires the ACFTU to mediate for a resolution to end a stoppage of work. Yet the enterprise unions and local federations are unable to play an effective role in disputes related to restructuring. By keeping themselves away from the strike, the official trade union has been silent to the employers’ retaliation.

The elected workers’ representatives in ISTC and their families were harassed by un-identified text messages on the first day of the strike, threatening dismissal. Rejecting a formal negotiation with the representatives, the management held a ‘consultation’ meeting with workers’ representatives they selected on 7 March. Twenty strikers were fired on 10 March for absence from work, disturbing production and breaching the company rules.


70 workers sacked by Nokia (Dongguan) took the company to court for reinstatement

Unfair dismissal is used by employers to aggressively punish workers for taking part in strikes. There is no law in China to check the employers in using breaches of the company rules and the Labour Law to sack strikers. 213 workers from Nokia (Dongguan) were fired last year for taking part in the strike to demand a negotiation with the employers after the announcement by Microsoft of acquiring the mobile phone section of Nokia in September 2013. Seventy of them took the company to the arbitration court on 10 February 2014 demanding reinstatement.

More than 2000 Nokia workers in Dongguan took on strike on 19 November 2013 suspecting the company of preparing a retrenchment by changing the rules of work without prior consultation. The new rules allow the management to easily discipline and fire workers. They were also dissatisfied by the verbal promise of the management about seniority and benefits protection in the new contract. The strike spread from a few departments to the whole plant on 21 November. A total of 213 workers had been sacked since 20 November which effectively ended the strike. Seventy of them were decided to seek arbitration.

The company argues in the court that it has the right to terminate the contract of workers for absence without leave and breaching the company rules. The company also rejects the sacked workers’ request for reinstatement saying that their positions in the plant have been replaced.

Without a precedent on reinstatement, the sacked workers and their lawyer could only use the Trade Union Law to argue that workers’ absence from work should not be punished when the trade union had not taken action to press the employers for a negotiation. The Trade Union Law is the only legal reference regarding workers strikes in China by obliging, though vaguely, the official trade union to step in for mediation of a resolution in a ‘stoppage of work’ without giving it a definition. The court is actually challenged to decide the protection of workers in strike if the official trade union fails its duty to mediate a resolution.

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