This paper examines the recent development of collective pay determination in China’s foreign-invested enterprises (FIEs), particularly in the manufacturing industry. Traditionally most employers in China used management discretion as the main method determining employees’ pay, although since 1995 there has been a collective wage consultation system in existence. Due to the country’s authoritarian and unitary labour regime, the collective means of pay determination have been symbolic and formative, with trade unions doing very little to engage in true negotiation with the employer (Pringle 2011). Yet, this situation changed in 2010 when the country experienced waves of labour disputes, represented by the famous Nanhai Honda strike (Lyddon et al. 2015), as hundreds of thousands of workers lodged spontaneous strikes and asked for pay rises in an unprecedented pattern. Due to the increasing pressure and the inability of official unions to represent workers, the Chinese authorities began to re-think the strategies to regulate workplace industrial relations. One of the new methods used to diffuse workplace conflict was the re-promotion of the existing collective wage consultation mechanism, which was quickly advocated throughout the country through administrative and official union channels. Since then the coverage of wage consultation has gone up rapidly, with the numbers of employees covered by collective wage contract growing from 61.79 million in 2009 to 150.26 million in 2013 (ACFTU 2013). The government seems to be keen to expand the wage consultation from 60 per cent of unionized enterprises in 2010 to 80 per cent in 2012, including most medium and large FIEs. .
However, the fast-increasing coverage of collective wage consultation has been described as mainly a symbolic progress with mere formality (Wu and Sun 2014), because it is driven by quantity of the contract itself rather than the quality of the process. It is said that there is little real negotiation during the process and management still controls pay determination, as the mechanism is used predominantly to maintain the harmonious labour relations (Clarke et al. 2004). In addition, low level of employee participation and workplace union organizations’ affiliation to management have made it very hard for genuine negotiation being carried out. Since collective bargaining is not legitimized by the government, collective wage consultation has not changed the situation where the majority of China’s workplace is still shaped by the traditional management-discretion model of pay determination.
Against this background, though, is the emergence of a new type of firm-level collective bargaining, built upon the existing consultation mechanism, in manufacturing FIEs in China’s coaster areas. In a number of FIEs, their collective wage consultation processes have demonstrated some similar features commonly seen in collective bargaining in the West. In these firms, workplace unions are able to have more serious, continuous and meaningful bargaining with their employers about pay and this has resulted in workers’ regular wage increase since 2011. Although the local government still controls the scope and the overall process, and strike is not allowed to be used by unions to sanction the employer, the emergence of such collective arrangement is unprecedented and significant to most Chinese workers who have never experienced true collective bargaining.
To evaluate this development, the study has chosen 12 manufacturing FIEs in two coastal provinces where there have been meaningful wage negotiations between the employer and enterprise unions. Data mainly comes from semi-structured interviews and focus groups with workplace union officials, employees and managers in these firms, as well as government officials. Secondary documents are also used. It will analyse the role of local governments and the degree of employee involvement in wage consultation, as well as the attitudes of foreign enterprises. While industrial conflicts may be perpetual due to structured antagonism within the employment relationship, institutional arrangement, especially through trade union involvement, is vital to protect workers’ collective interests (Simms and Charlwood 2010). In this respect, the study is set to dismiss the widespread claim that collective wage consultation has nothing to do with collective bargaining, and Chinese unions are not be able to play an important role in workplace industrial relations (Friedman and Lee 2010). Instead, the occurrence of the new collective arrangement demonstrates the possibility of bi-lateral workplace regulation developed from China’s unitary, authoritarian industrial relations system.
References
ACFTU (2013) Statistical bulletin of trade union organization and development in 2012. http://stats.acftu.org Accessed September 2016.
Clarke, S., Lee, C. H. and Li, Q. (2004) Collective Consultation and Industrial Relations in China, British Journal of Industrial Relations, 42: 2, 255-281.
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Lyddon, D., Cao, X., Meng, Q. and Lu, L. (2015) A strike of ‘Unorganised’ Workers in a Chinese Car Factory: the Nanhai Honda Events of 2010, Industrial Relations Journal, 46:2, 134–152.
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