Employment: Unions increase the pressure

[This feature is part of The year ahead 2010]

Companies in China have been under pressure to unionise for many years now, and the heat was significantly turned up on foreign enterprises in the middle of 2008. At that time, the All-China Federation of Trade Unions (ACFTU) very publically criticised foreign enterprises for refusing to allow their workers to join unions, and began to target Chinese subsidiaries of Fortune 500 companies.

In September 2008, the ACFTU released draft regulations on “democratic management of enterprises”. According to Pattie Walsh, DLA Piper's Asia regional head of employment, the regulations aim to provide for a uniform democratic management system through a system of “publicising” and the use of, among other things, an employee representative congress to supervise management and represent employees' rights within companies. The finalised regulations are expected to be promulgated soon.

About the same time as the regulations appeared, the ACFTU's pressure on companies subsided, as the Federation began to take note of more pressing demands related to the struggling economy. Nevertheless, latest reports say that 83% of multinational corporations' China headquarters had been unionised by the start of 2009 (313 labour unions). Employment law specialists say the ACFTU is now beginning to restart its unionisation campaign, and the pressure is likely to increase in the year ahead – particularly on important market players.