The workers' advocates say that the proposed labor rules - and more
important, enforcement powers - are long overdue, and they accuse the
American businesses of favoring a system that has led to widespread labor abuse.
On Friday, Global Labor Strategies, a group that supports labor rights
policies, is expected to release a report in New York and Boston denouncing
American corporations for opposing legislation that would give Chinese workers
stronger rights.
"You have big corporations opposing basically modest reforms," said Tim
Costello, an official of the group and a longtime labor union advocate. "This
flies in the face of the idea that globalization and corporations will raise
standards around the world.”
China's Labor Ministry declined to comment Thursday, saying the law is still
in the drafting stages. Several American corporations also declined to comment
on the case, saying it was a delicate matter and referring calls to the American
Chamber of Commerce.
But Andreas Lauffs, a Hong Kong-based lawyer who runs the China
employment-law practice at the international law firm of Baker & McKenzie,
said some American companies considered the proposed rules too costly and
restrictive.
Mr. Lauffs said the new rules would give unions collective-bargaining power
and control over certain factory rules, and they would also make it difficult to
fire employees for poor performance.
"You could hire a sales manager, give him a quota and he doesn't sell
anything, and you couldn't get rid of him,” Mr. Lauffs said. "It's not easy to
get rid of someone now, but under these rules it would be impossible."
It is not clear what the final law will look like, and only an updated draft
is expected soon. But specialists say the trend suggests that there may be new
challenges ahead for foreign companies doing business in this country.
Under China's "iron rice bowl" system of the 1950's and 60's, all workers
were protected by the government or by state-owned companies, which often
supplied housing and local health coverage.
But by the 1980's, when the old Maoist model had given way to economic
restructuring and the beginning of an emphasis on market forces, China began
eliminating many of those protections - giving rise to mass layoffs,
unemployment, huge gaps in income and pervasive labor abuse.
The worst off have been migrant workers, most of them exiles from the poorest
provinces who travel far from home to live in cramped company dormitories while
working long hours under poor conditions.
Migrant workers in virtually every city complain about abuses like having
their pay withheld or being forced to work without a contract.
"I don't know about the labor law," said Zhang Yin, an 18-year-old migrant
who washes dishes in Shanghai. "During the three months I've been here, my boss
has delayed the salary payment twice. I want to quit."
Having grown increasingly concerned about the nation's widening income gap
and fearing social unrest, officials in Beijing now seem determined to improve
worker protection. In recent years, more and more factory workers have gone to
court or taken to the streets to protest poor working conditions and overdue
pay.
"The government is concerned because social turmoil can happen at any
moment," says Liu Cheng, a professor of law at Shanghai Normal University and an
adviser to the authorities on drafting the proposed law. "The government
stresses social stability, so it needs to solve existing problems in the
society."
In a surprisingly democratic move, China asked for public comment on the
draft law last spring and received more than 190,000 responses, mostly from
labor activists. The American Chamber of Commerce sent in a lengthy response
with objections to the proposals. The European Chamber of Commerce also
responded.
The law would impose heavy fines on companies that do not comply. And the
state-controlled union - the only legal union in China - would gain
greater power through new collective-bargaining rights or pursuing worker
grievances and establishing work rules. One provision in the proposed law reads,
“Labor unions or employee representatives have the right, following bargaining
conducted on an equal basis, to execute with employers collective contracts on
such matters as labor compensation, working hours, rest, leave, work safety and
hygiene, insurance, benefits, etc."
If approved and strictly enforced, specialists say the new laws would
strikingly alter the country's vast labor market and significantly push up the
wages of everyday workers.
"If you really abide by the Chinese labor laws," said Anita Chan, an expert
on labor issues in this country and a visiting fellow at the Australian National
University, "migrant-worker wages would go up by 50 percent or more."
Until now, though, existing Chinese labor laws have gone largely unenforced,
which has further complicated the debate here. Opponents of the proposed law
argue that enforcing existing labor laws would be enough to solve the country’s
nagging problems. Advocates respond that adopting new laws would set the stage
for stricter enforcement.
Even lawyers working for multinational corporations seem to agree that there
is an epidemic of cheating.
Mr. Liu, the Shanghai lawyer who advised the government on the draft
proposal, says many companies avoid existing laws by using employment agencies
to hire workers. He says the new law will do more to protect workers from such
abuse by holding companies accountable.
"The principle is not to raise the labor standard dramatically," he said,
"but to raise the cost of violating the law. The current labor law is a paper
tiger and is a disadvantage to those who obey it. If you don’t obey the law, you
won’t be punished."
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