The restructuring and privatization of state-owned enterprises has led to thousands of labour disputes across China over the last decade. Many disputes have proved impossible to resolve and have dragged on for several years. See CLB’s research report, Speaking Out: The Workers’ Movement in China, 2005-2006.

 

One of the key reasons why these privatization disputes emerge and persist for so long is the failure of the official trade union, the ACFTU, to actively represent workers’ interests both during and subsequent to the restructuring process. Too often union officials have been passive bystanders as workers rights are systematically violated by management.

 

In May 2007, Han Dongfang talked to both workers and union representatives at the Yueyang Steelworks (Yuegang) in Shaanxi about the privatization dispute that had in the previous month escalated into a major strike with up to 3,000 workers blocking an inter-province highway for four days before they were forcibly dispersed by police under cover of darkness.

 

Both the workers and the county-level union responsible for the steelworks agreed that the enterprise union had been utterly ineffectual in protecting workers’ rights and would never dare stand up to management. Indeed, when the workers went out on strike they used their own representatives in negotiations with management, bypassing the union altogether. One employee, who had been working at the plant for 21 years, said the enterprise union officials had been elected by the workers and were aware of their grievances but: “They can’t do anything. At the moment, our company union is led by company people. The union is not independent. That’s how it is.”

 

 

The employee explained that when the workers voted for their union leaders, the bosses refused to accept the result and the workers were told to vote again. “So everybody voted the way they were expected to. In an enterprise union, you cannot escape the influence of the employer, can you? And although the union is big, it does not act independently. Or, if it does raise the concerns of workers with management, it cannot follow up. If the situation becomes difficult, they end up backing the bosses, right? That’s the way it is in this kind of company.”

 

Given the reality on the factory floor, the employee said workers never even bothered to consult the union before going out on strike. “I’m telling you, the workers have lost faith in the union. They have no effect. They can do nothing for us.”

 

A county-level union leader, named Deng, agreed that: “In some matters, the union is ... in fact … helpless… truly helpless.”

 

Deng pointed out that although the Trade Union Law gave the unions the right and the duty to protect workers rights and interests, “some companies do not comply with the Union Law... you talk about your Union Law but at the moment there is a lot of underhand business and violations of the law going on…First, if you are part of the company, then you are not independent! In a private enterprise, they pay the wages every month. They don’t let you act as you wish, and you have to do what they say. Those laws you mention - putting them into practice is very difficult!”

 

Han asked Deng if the boss decided to sack a union official he could go ahead and do so, even though under the terms of the Trade Union Law, management can only dismiss employees for union activities with the approval of the union committee: “Yes, that’s what the Union Law says; enterprise unions now have a clause which is like that. But if a situation arises, you run into problems! The boss will say, ‘I am paying your wages, so allow me to manage you.’”

 

 

Deng stressed that the union would never seek a confrontation with management: “What is wanted now is not a firmer stance from the union, what is needed is a cooperative approach, to create a win-win situation, right? You cannot act in conflict with the bosses, this is not allowed. In the local context, the economy must develop, the company has its corporate interests, right? Workers have their interests. These different interests have grown apart, but must be reunited!”

 

Deng described the union’s cooperative approach to the Yuegang strike as: “Some people came from the city-level union branch, and explained to the workers how best to go about safeguarding their rights … [The strikers] blocked the road for several days - traffic was severely disrupted, and this caused a lot of inconvenience for the Yueyang area, for production and economic development and the local population. When they heard what we had to say, these workers showed some understanding of the situation.”

 

Han asked Deng how this approach could bring about a “win-win situation.” Deng replied: “I’ll tell you this: the important thing is the quality of the company boss. How does he regard the role of the union within the enterprise? Some of them are helpful, recognise the importance of the union, and support it in its work. But some enterprises try to sideline the union.”

 

Deng pointed out that many enterprise unions had limited funding. Although enterprises are legally bound to provide the union with funds equivalent to two percent of pay role, not all companies paid up: “Not all of them. If we cannot get the full amount, it can be clawed back through local taxes. The tax department levies the company and passes it on to us. We’re just experimenting with this method at the moment. Doing it this way seems to works okay.”

 

“We are at the grassroots level. We cannot see far and we cannot see things in depth, but we are in touch with reality … There is still some distance to cover before we achieve legal compliance. Yes, there are problems. To cite a personal case, two years ago I issued a payment order to get some companies to pay union dues. When they did not pay, I took them to court. However the result was not what I had hoped for. People started interfering in every way, from every direction… My goodness, from every quarter... Provincial union headquarters said union fees are a provincial matter, so we paid them. But the grassroots level did not pay us, so we had difficulty getting things done.”

 

 

Deng admitted that the union had been unable to address workers’ concerns and demands during the company restructuring at Yuegang. The workers claimed that Yuegang’s assets had been undervalued and that large quantities of steel materials, inventory and fixed assets had been sold off on the quiet. A company-owned mine was also effectively given away, they said. After restructuring began in 2003, the shift system was changed but earnings went down. Low wages were the main grievance, with the new owner, the Dongling Group, failing to keep the promises of pay raises it made after the takeover. Management basically continued under the old regime, pay increases failed to keep up with inflation, and new employees suffered wage discrimination following the slashing of base pay after 1994, to 90 yuan. Though “grade pay” and allowances meant actual take-home was much more than this, the workers estimated that employees joining after 1994 were 200 yuan a month worse off than veterans. Other issues included the non-payment of benefits to “internally retired” employees (effectively redundant older employees retained on the workforce until they reach formal retirement age), and the treatment of the large group of employees who were children of retirees.

 

Strikers wanted Dongling to complete restructuring process within one year, with new pay proposals to be tabled by 10 June. They also sought an investigation into corruption at the plant by the Party’s Central Commission for Discipline Inspection and other state-level authorities.

 

The employee who talked to Han earned up to 900 yuan per month in total. His wife also worked at Yuegang, and their joint income was about 1,500 yuan a month. He had a company and state pension and health-care insurance, while their 10-year-old’s schooling was also free, apart from the cost of textbooks. His main personal complaint was that his wages had had effectively fallen over time, taking into account inflation. “Financially, we do not expect a lot. We don’t expect to live a life of luxury. But now we cannot keep going at a basic level.”

 

 

Han Dongfang’s interviews with the Yuegang employee and trade union official were originally broadcast in four episodes in May 2007.