In 2005 China Labour Bulletin launched a pilot programme designed to assist and complement the aims of the growing corporate social accountability movement in China by promoting the use of collective employment contracts in the China-based supplier firms of multinational companies. Our initial intention was to work with multinational companies in setting up a factory-based mechanism to facilitate collective bargaining between labour and management that would lead to the conclusion of wide-ranging collective contracts on wages. However, with the implementation of the Labour Contract Law on 1 January 2008, we now believe multinationals will be best served working directly with local branches of the All-China Federation of Trade Unions (ACFTU). Factory-level unions are legally empowered and encouraged by the government to negotiate collective contracts and we believe the time is right for the union to engage in genuine collective bargaining rather than the largely pro forma “collective consultations” it has promoted up until this point.

 

The basic aims of the programme (outlined below) remain the same.

 

Since the mid-1990s, the Chinese government and the ACFTU have consistently urged enterprises and workers to undertake “collective consultations” with a view to signing collective employment contracts. To this end, the government has enacted the Regulations on Collective Contracts, the Trial Methods for Collective Consultation on Wages,and other applicable regulations. We believe that China’s current social, economic, political and legal environment makes it both necessary and feasible for the collective contract system to be promoted and implemented in Chinese supplier firms today.

 

In promoting the project of “Protecting Chinese Workers’ Rights through the Collective Contract,” we aim to achieve the following three goals:

 

o      To mobilize workers to participate in collective bargaining, so that they can play an active role in protecting their own rights.

 

o      To achieve real implementation of China’s labour laws, trade union legislation and the relevant standards of the International Labour Organization.

 

o      To provide a new and effective means by which multinational buyers can realize their commitment to the principle of social accountability.

 

While acknowledging the importance of codes of conduct and social accountability standards, we believe the collective contract has the following three advantages over them:

 

o      Since the collective contract is legally enforceable, Chinese supplier firms are obliged to adhere to its provisions, and this gives multinational buyers a more effective guarantee that they can fulfill their social accountability goals.

 

o      Being formulated on the basis both of Chinese law and of the specific circumstances of individual Chinese enterprises, the collective contract better reflects the wishes and aspirations of both workers and management in the supplier factories, and is therefore a more targeted and effective tool.

 

o      Since the workers’ own elected representatives participate in the design and drafting of the collective contract and directly supervise its implementation, the contract can be more readily and fully implemented.

From the corporate social accountability perspective, the collective contract system serves the following three functions:

 

o      It converts the code of conduct from being a moral or ethical standard into a legal standard, and thus transforms the employer’s moral responsibility into a legal obligation.

o      It turns the code of conduct – a “foreign imported” standard – into a set of rules that is based on Chinese law and takes into account the specific circumstances of Chinese supplier firms.

o      It changes the status of workers from that of observers or onlookers into being direct participants in, and supervisors of, the labour standards process.

 

There are three preconditions for effective implementation of the programme:

 

o      An attitude of sincerity and active cooperation on the multinational buyers’ part.

o      The collaboration of the Chinese supplier firms in providing the requisite time and space for the workers’ involvement in the process.

o      An arousal of the workers’ awareness of their rights, and a willingness on their part to fully participate in the process.

 

Implementation of the programme will help to foster and strengthen, among Chinese workers, three levels of awareness – greater awareness of labour rights, greater organizational awareness, and greater participatory awareness. By promoting the collective contract in Chinese supplier firms, moreover, we expect to see a “triple win” situation for all the parties concerned:

 

o      Multinational buyers will enhance their social and ethical reputation and prestige.

o      Chinese supplier firms will achieve a stable labour-relations situation in their factories.

o      Chinese workers will secure a genuine protection of their basic rights and interests.