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Working Conditions



Turning back the clock: Reversals in labour protection


Despite several national reforms to labour laws in 2008, including the Labour Contract Law, the Employment Promotion law and the Labour Dispute Arbitration and Mediation Law, the economic crisis as well as relatively lax and varied law enforcement appears to be limiting some of the positive effects of the reforms.

In some regional and national developments, authorities have been suspending parts of the new legislation and giving breaks to companies to the potential detriment of workers rights and the progress that has been achieved. In common with many countries and establishment thinking everywhere, the current climate in China appears to suggest that in times of economic crisis one of the first things that can go are workers rights and their financial gains.

For example provinces hit by the recession – mainly those export-led manufacturing regions – have agreed to allow companies to suspend contributions towards social security and pension plans despite government bodies having spent the last decade or so trying, often with little success, to develop proper social safety nets for the average worker.

Authorities have also called for wage increases to halt. The Guangdong ACFTU is one regional ACFTU known to have suspended collective wage increase negotiations. [see Guangdong Provincial Trade Union suspends collective wage negotiations]

Over the border in Hong Kong, the business lobby has been busy trying to get Guangdong authorities to suspend the more ‘onerous’ aspects of the labour contract  law. Unofficially it appears to be working. [ See Hong Kong Business Lobbies Against Workers’ Rights in China]

The article below from the mainland magazine Economic Observer gives details of a new-old trend in the south: the hiring – and firing – of daily workers. Workers who queue up by the front gate and take their daily wages and can expect to be fired in an instant with no paid holidays, pensions or compensation. A far cry from the almost ‘European’ model foreign companies were moaning about at the start of 2008 or the workers paradise the government has been promoting.


Day-Salary Back in Fashion

 By Yang Xingyun
From cover, issue no. 405, Feb 9, 2009
Translated by Lin Li

When work finishes at 6:30pm everyday, Zheng Wenhui and some 30 other co-workers queue at their factory's entrance to receive payment before heading home for dinner. They work for an electronic firm based in Shenzhen, the export-oriented manufacturing hub in southern China's Peal River Delta in Guangdong province.

The routine to get daily pay-out has started since they returned to work after the week-long Lunar New Year public holidays ended in early February.

"Getting a job is one problem, and getting paid for the job done is another problem," said Zheng, a 36-year-old migrant worker who has been moving from job to job in the Pearl River Delta region over the last 18 years.

Zheng observed that the daily pay-out arrangement, once a common practice but went out of fashion in cities like Foshan, Dongguan and Shenzhen in recent years, had made a come back.

The Pearl River Delta, one of China's most economically active regions that draws in hundred of millions of migrant workers, has been badly hit by the on-going global financial and economic crises. As Chinese exports declined three months straight and job opportunities shrunk, some 20 million migrants were estimated to have left the cities for the countryside. Those who remained behind faced a tougher job market.

Zheng recalled since the middle of last year, many companies shut down suddenly when failing to secure orders and some employers simply disappeared overnight without paying their workers. Based on data released by the Guangdong provincial government, between September and October last year, in Dongguan alone, there were 117 employers of Hong Kong origin went into hiding and they owed salary payments to some 20,000 workers.

These incidents have led many migrant workers to prefer opting for daily-based pay-out to avoid potential losses. Some export-oriented companies, too, are happy with such arrangement, as daily-wage scheme provided the flexibility of hiring based on needs when orders came in. This helps to cut labor costs.

Wang Xiaolan has been acting as an agent to help garment factories in Hukouzhen near Guangzhou to source for interim daily-wage workers. She said garment factories usually paid about 80 yuan daily per worker and one meal per day included. She added depending on the size of the orders received, these companies would hire interim workers for a stretch of 20 days to a month or more.

Wang said it would be easier for workers with specific skills, such as technicians and tailors, to secure daily pay out job, mainly because such hiring were usually for rushing out urgent orders and old hands who could deliver were needed.

"When the orders are urgent, companies are willing to pay a little more," said Wang, added the interim workers were usually sourced by words of mouth and through close contacts. At present, the minimum monthly wage in Shenzhen special economic zone stands at 1,000 yuan, or an hourly rate of 8.8 yuan. For companies located outside the zone but within Shenzhen, the pay out is about 900 yuan per month, with an hourly rate of 8 yuan. In Dongguan, the hourly rate is much lower at 4.43 yuan. Meanwhile, with the current trend of daily pay-out, workers can easily earn more than 1,500 yuan per month, an incentive for workers to opt for the daily scheme.

However, the downside is that daily-wage interim workers do not enjoy pension and other insurance benefits."We are free to come and go, we can also demand for higher wages when companies urgently needed extra hands. But, what if we fell ill or got injured?" said Zheng, who felt trapped in a catch-22.

Original version: http://www.eeo.com.cn/ens/biz_commentary/2009/02/12/129084.shtml
Chinese version http://www.eeo.com.cn/eobserve/eeo/jjgcb/2009/02/09/128566.shtml


IHLO March 2009



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