Peng Jiayong's public talk at Unirule Institute of Economics' Bi-weekly Forum

Published 24 January, 2017 

Labour rights activist Peng Jiayong shares his views on collective bargaining cases he participated in, first as a worker representative, later as a negotiations consultant. (Photo: WeChat)​

Full Transcript / English Translation:

Greetings, distinguished guests. I am Peng Jiayong, from Yichang, Hubei. When I was a worker in Zhongshan, Guangdong, I took part in a worker representative election and was elected as the chief representative. I was fired for this. I then worked briefly for the Panyu Workers Centre, the labour NGO that advised the Lide workers’ collective action. I am currently unemployed.

I’d first talk about the worker representative system as I understand it. It is a temporary, advocacy-based method to organise workers, and is different from a trade union. It arises out of workers’ need to protect and advocate for their rights. At ordinary times, in the absence of blatant repression of their rights, the thought of electing a representative would not occur to most workers. They only turn to the system when they must defend their rights urgently. Just then a speaker on the floor mentioned that workers are not organised and have no desire to be. We workers, especially those in the Pearl River Delta, do wish to be organised, but there is no workers’ organisation that could represent us and advocate for our rights legally. That’s how the idea of electing a representative to bargain with the management was born. (It was first brought up by Duan Yi, amongst others from the Guangdong Lao Wei Law Firm).

How did I become a worker representative? I was working at a French factory in Zhongshan for low wages and poor benefits. The minimum wage in Zhongshan was 1,100 yuan in 2012 and we asked for a raise to 1,300 yuan and better benefits. The trade union chairperson, a factory manager, shelved our demands and scolded the workers for stirring up troubles. There was no reason for a raise as the official minimum wage remained stagnant, so he said. Take it, or leave it. Thus the assembly department, where I worked at, elected me as their worker representative. Four other representatives from other departments chose me as the chief representative. All 156 workers signed and left their fingerprints on a letter of authorisation, appointing us to bargain with the management on their behalf over seven matters: rent subsidies, basic salary, year-end bonus, paid annual leaves, attendance policy, seniority awards, and living allowance. That’s how we became worker representatives.

In the Lide Shoe Factory case I was no longer a worker, but an NGO staff member. Why did the Lide workers elect worker representatives? They did not do it out of the blue, not in a power struggle with the union, nor driven by political motivations. Some media portrayed it as an infiltration by hostile foreign forces. Far from it. Lide workers knew that the factory would be relocated soon but the factory had owed them many benefits like social security payments, housing provident fund, overtime pay, paid annual leaves, and high temperature subsidies for years. They could not claim these benefits if the factory is relocated. They need to defend their rights. First they approached the factory union. Its chairperson is a high-level manager and ignored their demands. They then approached unions at the district, city, and provincial level, all to no avail. They had no choice but to start collective action in August 2014. A workers’ assembly was convened in December and 63 worker representatives were elected, 13 of which were bargaining representatives, among which five were made spokespersons. I was present at the election and explained the duties of representatives and how to defend their rights. However, these five spokespersons dragged their feet through the bargaining process and refused to report the progress to the workers. An agreement reached in the second bargaining session in December 2014 was not yet implemented in April 2015. That agreement only dealt with some of the overdue benefits (worth about twenty million yuan) but there was no consensus on other items such as overtime pay, paid annual leaves, hot day subsidies, important social security payments, provident fund and seniority awards. Further bargaining is in order. If this dragged on, the factory would be relocated in May and the workers would be left with no recourse. The workers had to call a third meeting. 63 new representatives were elected, 19 of which were bargaining representatives who participated in an amiable tripartite bargaining process with the management and the government. In fact, the workers also advocated for the factory’s rights. They asked the government to reduce the penalty imposed on the factory over late social security payments if the factory is willing to pay the overdue sum. The government however declined as it is a legal requirement. The factory ended up paying over nine million yuan in penalty. All in all, it was a rather successful bargaining case that was hailed by the academia as a tripartite success story for the employer, the workers and the government.

This story, however, did not end on a happy note. There was criminal punishment. I was detained for 37 days. Our Director Zeng Feiyang is sentenced to three-year imprisonment, suspended for four years. My colleague Meng Han is still being detained. Why did this happen? Mostly because the workers sought help from Panyu Workers’ Centre, a labour NGO that was accused to be “infiltrated by hostile foreign forces” because it was indeed partly funded by foreign funding. The workers were not unwilling to seek help from the union. They were turned away time and again. It’s only then that they asked Panyu Workers’ Centre for help. That’s why they didn’t trust the union. And that’s why we were charged with the criminal offence of gathering a crowd to disrupt social order seven to eight months later.

The second issue that I’d talk with is the legal basis of a worker representative system. Professor Chen mentioned a legal basis founded on the Civil Law. In practice, Labour Law is the first to come to mind. Art. 33 of the Labour Law stipulates that a collective contract shall be signed by and between the trade union on behalf of the employees and the employer. Where there is no union, workers should elect representatives to bargain on their behalf.

[Chang Kai*: This is the second sub-section. The first is better.]

The employees may sign a collective contract with the enterprise on remuneration, work hours, rests and vacations, occupational safety and sanitation, insurance, welfare, and other matters. The draft contract should be discussed and passed by a workers’ assembly or a workers’ representative assembly.

[Chang: This is a very important legal basis.]

Hence we relied on Art. 33 of the Labour Law as our legal basis.

Turning to the third issue, the duties of a worker representative. Once elected, a worker representative must speak and act for the workers, and refrain from advancing their personal agenda or making unauthorised, private compromises with the management. Everything they say and do must be about the subject matter and per the workers’ desires. The bargaining result between the representatives and the management is not finalised by an official stamp. It must be discussed and passed at a workers’ assembly. I participated in five rounds of bargaining in the collective action staged by sanitation workers in Guangzhou university town. A meeting of the workers’ assembly was called after each bargaining session. For instance, the first round of bargaining was fruitless but a meeting was called to report the progress. In the second round, the management’s offer of 1,000 yuan per annum was reported and voted down at the assembly. Talks resumed until the management made an offer of 3,000 yuan per annum, which was passed at the ninth meeting of the workers’ assembly by a show of hands, and successfully concluded the bargaining process. The decision is not solely the worker representatives to make. Their job is to (report to workers and seek their opinion).

What can a worker representative do to gain the workers’ trust? Unity is built on trust. As long as you are truly speaking and acting for the workers, unaltered by personal interests or other matters, to advocate for workers’ legal and economic rights, the workers would trust you. They would authorise you to speak and bargain on their behalf, and offer their undivided support for the bargaining process to succeed. When you are interrogated, fired, or oppressed, the workers would always have your back.

On the fourth issue, the limits of labour arbitration and the Labour Inspectorate. Labour arbitration is time-consuming. Arbitration of collective labour disputes is unaffordable. It takes a long time to move from arbitration to trials and appeals. When the workers number in the hundreds or thousands, they simply cannot afford to wait that long. It also creates massive workload for arbitrators and judges. More importantly, while a lawsuit brought by one or a few workers against the management would not substantially affect the factory’s daily operation, allowing the arbitrator to rule solely on legal reasons, the same cannot be said for factory-wide labour disputes. A labour dispute of this scale may be a matter of life and death for the factory, and would be regarded as a precedent for disputes in the relevant industry or region. The government must then consider other factors like tax revenue, GDP and political track record. Protection of the workers’ rights is but one of many concerns. The arbitrator’s hands are often tied by the government and other considerations, including the need to maintain stability, in arbitrating collective labour disputes. Hence success is rare when collective labour disputes are put to arbitration. There was one successful case in Panyu, after five years in court. It is impossible to ask every worker to wait that long. Labour arbitration is therefore not the proper way to resolve collective labour disputes.

What about the Labour Inspectorate? It is not feasible either. The Labour Inspectorate can only act when all facts are sorted out and agreed upon, and there is absolutely no dispute. In the current case, if the management furbished excuses such as claiming to delay relocation plans, or that they had been informed by local officials that social security payments could be withheld when they were setting up the factory, the Labour Inspectorate would direct the parties to arbitration because the facts were disputed. The Labour Inspectorate is also subject to similar constraints i.e. tax revenue, political track record, GDP, and may not rule fairly and justly. The Labour Inspectorate is not the way to go for resolving collective labour disputes.

The only remaining option is to elect representatives to bargain with the management in a tripartite setting, coordinated by the government or the trade union. During 2011-2015, over a hundred collective labour disputes were successfully resolved in this manner, all with positive community effects.

Lastly, I’d talk about legal reforms. I submitted a proposal to amend Art. 52 of the Trade Union Law via a National People’s Congress delegate on the Two Sessions in 2014. Art. 52 states that where workers are terminated for their participation in union activities, the employer should pay a compensation of twice the employee’s annual income. This deters employers from firing workers active in trade union activities. However, Art. 33 of Labour Law states that there are two methods of bargaining with the management, the first is via the union, and the second via elected worker representatives. Art. 52 only protects those using the first method, but not the second. I proposed to fix this legal loophole, such that when a worker is terminated for participating in union activities or collective bargaining, the employer should pay a compensation of twice his annual salary. This amendment could extend equal protection to elected worker representatives.

Appendix: Peng Jiayong: Workers’ Unity is Essential for Workers’ Rights and Dignity

[On the evening of 27 September, 2014, workers from the Foshan Arts and Crafts factory and staff members from Panyu Workers Centre and Guangdong Lao Wei Law Firm gathered to celebrate the success of the collective action. Bargaining consultant Peng Jiayong gave a quality speech.]

We are in distinguished company on this beautiful evening. September is the season of harvest, that yields the initial success of the collective action staged by workers from the Foshan Arts and Crafts Factory. As the case progressed in the past few months, I have learnt a lot and have grown from your average worker representative into a worker advocate and bargaining consultant. I once thought that workers could be protected from legal loopholes if we advocated for national and regional legislators to amend and improve the laws. I devoted myself mainly to researching and drafting proposals, contacting NPC delegates, and pushing for legal reforms. It was later, when I found that many fellow workers could not afford to bring lawsuits due to money or time constraints, that I realised that lawsuits may not be the most effective way to resolve labour disputes. This is especially true for collective labour disputes, where government inaction often escalates the matter into a conflict between the workers and the government.

A few months into practice, I find that collective bargaining is the most effective way to resolve collective labour disputes. Coaching services provided by labour organisations on using collective bargaining to defend labour rights is in growing demand. Under the current legal framework, workers can engage in collective bargaining with the management and convene workers’ assemblies and worker representatives’ assemblies. The government can tolerate the establishment of a temporary, advocacy workers’ organisation. A growing number of workers, businesses, and trade unions approve of collective bargaining.

Some officials are stuck in the past. They fear collective bargaining and tried to disrupt it. It takes time to change their mind, a task that labour organisations must shoulder. Much still remains to be done.

During this time, I learned about the unique way that Panyu Workers Centre adopted to coach workers on collective bargaining. A humble, dignified, peaceful, reasons-based, and non-violent approach to use collective action to advance the collective bargaining process, to defend the workers’ collective rights and address their reasonable demands.

This method adopted by the Panyu Workers Centre helps the workers resolve disputes and protect them from possible repercussions. Director Zeng led the Centre to guide workers through success after success of collective bargaining cases. This has helped the general labour force substantially and built a good reputation within the field and amongst workers.

I often turn to Mr Duan Yi, from Lao Wei Law Firm, and Mr Chen Huihai, from the Worker Training Unit, when I am confused. They always give me timely and on-point advice. I also got help and guidance from the public interest weibo account @來泊灣 and the Two Sessions delegates.

The government generally intervenes in collective bargaining cases in three stages. At the first stage, the government would pressure the workers. They must hold out or the entire action would fail. The management would also try to fragment and disintegrate the workers. A lot of cases stop at this stage. At the second stage, the government would pressure both the workers and the management. Whoever gives in, loses. If both sides withstand the pressure, the government would primarily pressure the management at the third stage. At this point, success is imminent if the workers stay united and persist. The management might deceive or threaten the workers. The job of a worker advocate is to respond to these tactics in a timely and appropriate manner.

Workers’ unity and persistence is the powerful backbone of any successful collective bargaining. The worker advocate cannot let his guard down at any moment. If the workers are well-organised, able to withstand temptations and pressure, refrain from taking radical actions, and use collective action to advance the collective bargaining process, success is well within reach.

[*Chang Kai is a Chinese scholar specialising in labour issues]