The workers action broke out as Sichuan Dazhou Tongda Chemical Co. Ltd planned to launch the restructuring, which was reportedly supported by the Trade and Economic Committee of Dazhou City Government.
Workers from the chemical plant told China Labour Bulletin that the committee and the factory leadership had agreed on an unfair share purchase and allocation scheme prior to the restructuring. They said the factory had only informed workers representatives about the plan during a secretly convened Workers Congress. According to the workers, this meeting was unlawful because it was held in secret and without prior notice being given to the workforce. They also pointed out that the Workers Congress had not undertaken an election for eight years a breach of the Trade Union Law.
During the Workers Congress meeting, the factory manager demanded that the workers representatives sign a pre-written agreement on the restructuring plan, and he hinted that anyone who did not sign it might lose their jobs. Some representatives who had opposed the restructuring plan reluctantly signed the document under this veiled threat.
When the other workers learned about this incident, they gathered at the city government offices to complain and to demand that the government step in to terminate the improper and unlawful restructuring process. When the government failed to reply, the workers blocked the entrance to the factory dormitory and prevented the factory coach from transporting workers to their shifts.
Among the workers main grievances were that the city government had unreasonably allocated 70 per cent of the shares in the enterprise to the factorys management, while excluding workers completely from the share allocation process. In addition, the city government did not put the factory sale out to public tender, but instead estimated the worth of the factorys assets at only 2 million Yuan reportedly far lower than their real value and then allowed the factorys managers to buy 70 per cent of the shares at this artificially low price. The workers condemned this move as being a blatant squandering of state-owned assets.
They also lashed out at the governments move to retrench workers at the factory who are now in their 40s and 50s at a compensation level of only 600 Yuan per year of service. After retrenchment, these workers will receive only 130 Yuan per month from the government -- the minimum living allowance for Dazhou City -- and will not be given any medical insurance.
The workers at the Sichuan Dazhou Tongda chemical plant have put forward a counterproposal whereby they would pool their funds and purchase the enterprise at a price well above 2 million Yuan, and they would then run the enterprise in a democratic way that would also safeguard their jobs in the future.
27 September, 2004