The bright side of trade unions

“Unlike Western unions that usually aggressively protect interests of the employees, Chinese unions generally try to promote harmonious labour relations,” she said. “They play a dual role in terms of representing the rights and interests of employees, and keeping production high and promoting the economic development.”

FIEs should react to the pressure of collective bargaining and the formation of trade unions more positively. “Collective contracts will be used as one of the main tools to regulate the rights and obligations between workers and employers,” said Deng.

According to her, it is essential for companies to understand the collective bargaining process in order to come up with appropriate negotiation strategies. Maintaining a close relationship with unions will expedite and promote communications between employers and employees. With the right approach, it is possible that trade unions could strengthen the relationship between the two sides.

Employers, especially foreign-invested enterprises (FIEs), have been facing increased pressure from collective bargaining and unionisation developments on the Mainland. In August, the All-China Federation of Trade Unions (ACFTU) announced its commitment to push forward the creation of trade unions in non-public enterprises, and its goal is to achieve unionisation in over 90% of enterprises.

Additionally, there is potential new legislation at the local and provincial levels to promote collective bargaining and democratic management at companies.

On August 23, the Guangdong provincial government released the third draft of its Guangdong Enterprise Democratic Management Regulations (广东省企业民主管理条例), which sets out the mechanisms of the collective wage negotiation system. In the same month, the Shenzhen People's Congress issued the Draft Shenzhen Economic Zone Collective Bargaining Regulations (深圳经济特区集体协商条例).

Although companies are not legally required to initiate the set-up of unions, they are prohibited from obstructing unions from being formed by the ACFTU and employees. Companies without an enterprise union might still be pressured into a collective bargaining process if employees elect their own negotiation representatives with the help of higher level union federations. However, involving these external labour organisations may make it more difficult for companies to resolve issues with employees as the union federations may become involved by participating in and guiding the bargaining process. VC (For more on this topic, please see page 21)