In the middle of August, Yanzhao Dushi Bao (Yanzhao City News) published a story that has grabbed the nation's attention. The paper reported that China Northeast Oil Management Bureau had issued a statement saying it would be rehiring workers who had previously been laid off. But one of the criteria for re-employment was that the person had to be divorced. This led to an immediate and dramatic rise in the number of divorces among its laid-off workers. The national media picked up this story and more than 100 news organisations in China, including the CCTV, have been following this situation with editorials and feature stories.
Re-employment criteria
China Northeast Oil Management Bureau is a subsidiary of the China National Petroleum Corp, the nation's largest state-owned energy producer. The subsidiary itself is headquartered in Renqiu in Hebei Province. In 2000, this company, like many other state-owned companies desperately seeking to cut costs and raise efficiency, made sizeable cuts in its workforce. This subsidiary cut its payroll by more than 30,000, laying off men and women between the ages of 20 and 55. Those who had been cut received severance pay as compensation in accordance with their length of service, and technically ended their relationship with the company. They were then officially referred to as "laid-off workers" (xia gang zhi gong) who had "undergone retrenchment" (mai duan gong ling). Previously, workers in China's state enterprise sector could expect lifetime employment.
However, on August 5, 2005, the oil bureau drafted a policy letter, aimed at assisting some of those who had lost their positions to find another job. Sent out on August 12, the company letter asked all who had previously lost their positions with the company and now desired work to report to the personnel department and fill in a "Letter of Intent", if they met the company's re-employment criteria. Among the requirements for eligibility: if both husband and wife had previously been employed by the company and both had been retrenched, then one would be eligible for one of the new jobs; but those who had lost their positions, were divorced and could produce a divorce certificate would also be eligible. (The company's intention was to assist those in serious economic difficulties, especially single mothers with children).
According to the spokesperson at China Northeast Oil Management Bureau, the company's plan was to offer their former employees jobs, such as security patrol positions in districts where the company had built staff housing; traffic control and supervisory posts; security guards for specific buildings; gardening and landscaping positions; housekeepers; parking lot management and other service sector jobs. The jobs were part-time, four hours a day, with a monthly salary of 423 yuan.
Avalanche of divorces
Beginning on August 12, the day that the letter was issued, the marriage registry in the area where China Northeast Oil Management Bureau is located was swamped with laid-off employees seeking a divorce. On August 18, one reporter was told by the Department of Civil Affair of Renqiu city that in the four days from August 12 to 17, now fewer than 65 couples, all of whom were former employees of the company, had applied for divorce. By the morning of August 18, the registry had run out of divorce certificates. Since the subsidiary company is a large operation with units and branch offices spread around several districts of this northern province, the number of former employees seeking divorces could eventually be much higher, one current company employee told a reporter.
According to a story published in the Henan Ribao (Henan Daily News), at least 30 couples living in a company-built village of 530 households were reported to have applied for and received a divorce as of August 17. This information came from a man who himself had just been divorced on that day. According to another report, among laid-off workers in this area the common greeting has changed from "Have you eaten?" to "Divorced yet?"
China's domestic media has described those seeking divorces in this way as being "peaceful and harmonious," "having warm feelings for each other," and "going hand-in-hand" to apply for the divorces. According to one official handling the applications, many of the couples applying for divorce had obviously not done any preparation at all. They had not come to any agreement on major issues, such as the care and custody of their children or the division of their home and other assets, but they assured the official that they could achieve a "generous and mutually forgiving" agreement in a short period of time. The reporter found that those divorcing felt that their lives would not change much after they divorced and that they still planned to live together.
A look at household incomes
These laid-off workers were getting divorced in order to get part-time jobs with the oil management bureau and a wage of around 400 yuan a month. In most cases of couples seeking a divorce, either one was still working or both of them were formerly employed by the company. Since they did not fulfill the criteria laid out in the company letter, the only way they could see to get a job was first to get divorced and then apply for the job as a single, unmarried person.
While this was the immediate reason for the divorce applications, clearly the fundamental reason is the financial difficulties these couples are facing. According to one woman who was formerly employed by the company, then laid-off and is now divorced, her "ex-husband" is employed as an equipment maintenance technician in a subsidiary of China Northeast Oil Management Bureau and earns about 800 yuan a month. Their child is still in school. Another divorced man, laid off by the company and now applying for a part time job, said that his "ex-wife" had not used cosmetics for several years and that neither of them could even afford to buy new clothes.
It may seem strange that these retrenched workers, who only a few years ago received several tens of thousands of yuan in severance pay, are now in such dire straits. In fact, the workers have to pay nearly all of their retrenchment money into two vital funds: their retirement pension fund and their medical insurance plan. According to one worker, the amount she had to pay into these two funds was 2,015 yuan and 808 yuan, respectively, in 2004; and 2,350 yuan and 832 yuan in 2005. Since the chances of her ever finding work again were very low, and she would have to keep paying these amounts every year until retirement age, she was afraid to use her retrenchment payment for any other purpose. "The monthly payments will rise further next year, so the compensation pay I received can't possibly cover even my basic living expenses," she told a reporter. Given this kind of financial difficulty, it is hardly surprising that these laid-off workers should be so eager to seek part-time employment that pays a monthly wage of just 423 yuan.
Company revises policy
The China Northeast Oil Management Bureau found itself in a very embarrassing situation as a result of the wave of divorces sparked by its unusual preconditions for re-employment. The company issued a supplemental notice on August 18, saying that only those people who had divorced prior to August 5 would meet the requirements for re-employment. Although this notice halted the divorces, it brought additional headaches to those who had already started divorce proceedings in the interim. According to one report, one new divorcee said, "I've already gotten a divorce, and according to the criteria, I should get the position. If the (original) letter doesn't count, who's going to take the responsibility to compensate me for my losses from the divorce?" Another recent divorcee said, "We can't possibly get remarried. If we do, then we will have no chance at all of getting a job." Even more serious, most of the female divorcees are reportedly now worried that this "paper divorce" might actually become a reality. In the week since the revised policy was issued, rumours have been circulating that some of the "ex-husbands" have now had a "change of heart", suggesting that many of the women might have lost their husbands for good in this mad dash to get a part-time job.
China's millions of laid-off workers have become one of the most vulnerable groups in society today. Stripped of their former right to employment, their social position and respect have steadily fallen to the lowest of levels. Although intended by China Northeast Oil Management Bureau to offer some re-employment opportunities to its laid-off workforce, the new policy instead caused a wave of divorces that seriously undermined society's respect for these people and at the same time threatened their last bastion of stability – the family.
Millions of "workers who have left their positions" and who are able and ready to work, remain unemployed, despite the fact that in April 2005, the government announced that the number of employees retrenched from state-owned enterprises had finally peaked. As this episode of "divorce for re-employment" shows, the central government's reform policies can have a very negative impact. While not negating the need for positive reform action, the incident vividly highlights how important it is that the government should reconsider the suitability of its past reform policies and strive, in future, to formulate compensation and re-employment programmes that have fewer negative repercussions.
Background information
• In the 1990s, China's state owned enterprises launched two reform policies: "cutting staff to boost productivity" and "enterprise restructuring". According to government statistics, over the seven-year period from 1998 to the present, China's state enterprises have cut their workforces by 60 percent, or about 30 million people in all. These are the so-called laid-off workers.
• In an effort to address the problem of re-employment for these laid-off workers, in 2002-2003 the CPC Central Committee, the State Council and its subordinate departments issued nine major policy documents including the "Notification on Further Improving the Work of Re-employing laid-off workers". In these various documents, the central authorities called upon local governments, state-owned enterprises and private enterprises around the country to actively assist laid-off workers in finding re-employment.
• To address the livelihood problems of laid-off workers, the Chinese government has set up a social insurance system consisting of "three lines of protection", namely: 1) those laid off from state-owned enterprises can receive a basic living allowance (jiben shenghuo baozhang) from the reemployment service centers for up to three years; 2) if they still have not found a job by then, they can receive unemployment insurance payments (shiye baoxian jin) for a maximum of two years; and 3) if they remain unemployed at the end of this two-year period, they can apply for the minimum living allowance (zuidi shenghuo baozhang fei), to which all impoverished urban residents are entitled. As of June 2005, the national average sum paid out as urban minimum living allowance was 154 yuan per month. By contrast, the average annual salary for urban employees nationwide in 2004 was 16,024 yuan, or an average monthly salary of 1,335 yuan.
30 August 2005