In this issue:

1)China's Draft Labour Contract Law: Without Freedom of Association, will Chinese Workers Be any Better Off?

2)China's Labour Trap

3)Death from Overwork in China

http://iso.china-labour.org.hk/public/contents/article?revision%5fid=38983&item%5fid=38982 [2]

Since China's Labour Law was first enacted in 1994, major changes have occurred in China's economic structure and in the composition of the working class. On the one hand, the program to privatize or "restructure" state-owned enterprises has led to unemployment or greatly reduced living standards for tens of millions of urban workers; and on the other, the inflow of low-paid migrant workers to urban areas has now soared to a level of around 150 million. Even in economically thriving parts of the country, the working and living conditions of many workers, especially migrant workers, have remained poor or are getting worse. Workers in general have become steadily marginalised, both socially and economically, and are increasingly being represented in official discourse as forming one great "underprivileged minority" in society.

In response to the rising incidence of worker unrest and labour disputes of all kinds in recent years, the central government has adopted various measures aimed at safeguarding workers basic rights. The most noteworthy such measure has been the government's plan to introduce a Labour Contract Law – a preliminary draft of which was discussed at the annual meeting of the National People's Congress in March. A public consultation exercise to gather further input and ideas on the draft is currently underway.

Role of the Labour Contract System

The policy of making employers provide workers with individual labour contracts was first introduced in the early 1980s, and it formed a crucial plank in the government's wider drive to end the traditional "iron rice bowl" policy whereby workers in state-owned enterprises had enjoyed cradle-to-grave job security and welfare provision during the first three decades of the PRC. Instead, the labour contract system brought workers fixed-term periods of employment, which could either be renewed or not, depending on the individual worker's job performance and the employer's staffing needs; and it relieved enterprises of most of their former social welfare obligations to the workforce.

In short, the labour contract system prepared the ground for the emergence of a free labour market in China, in place of the former system of "unified job allocations" by the state. One vital element in the development of a genuinely free labour market in China, however, has to this day been conspicuous by its absence: freedom of association for workers and the right to collective bargaining – the only effective means by which workers anywhere have been able to negotiate fair, reasonable and market-determined terms of employment.

In the mid-1990s, China introduced a second regulatory tier in this area – the system of collective labour contracts, which ostensibly allowed workers to negotiate a single, factory-wide contract for the entire workforce, in addition to workers' individual contracts. But this was only applied within state-owned enterprises, where it became largely a pro-forma exercise between the ACFTU and management. Workers were not involved at any stage of the collective contract "negotiating process" and so it brought them few if any tangible benefits.

In the course of the public consultation exercise on the draft Labour Contract Law, much controversy has arisen between two schools of thought. The first, represented by Professor Chang Kai, a labour-relations academic at People's University in Beijing, argues that the draft law is correct in seeking to set a higher standard for the protection of workers rights. Given the currently low status and power of Chinese workers relative to their employers, Chang says, the new law should redress the balance by giving a comparative advantage to the workers in the employment contract relationship. Failure to legislatively intervene in this way in the operation of the labour market would, in his view, be tantamount to the government taking the employers' side in the labour rights equation.

The other school of thought, represented by Professor Dong Baohua of Shanghai's East-China University of Politics and Law, argues that the draft law imposes too heavy a burden on employers and so would adversely affect enterprise autonomy. He argues that the proposed labour and employment rules are, by international standards, too rigid and exacting, and in practice would cause unnecessary friction with internationally applied human-resources management principles (for example, hiring and firing on the basis of employees' performance evaluations.) Concurring with this view, both the E.U. and the U.S. Chambers of Commerce in China have gone still further by suggesting that a withdrawal of investment and transfer of production away from China would likely follow if the new law were passed without substantial amendment. (For further details, see "Disputes over New Labour Contract Law", available in the CLB website at: http://www.clb.org.hk/public/contents/article?revision%5fid=38246&item%5fid=38245 [3] )

What Role for the Workers?

What has so far been missing from the debate, in CLB's view, is any real recognition of the fact that legislative intervention of any kind, on its own, will inevitably be inadequate to the task of improving labour standards and conditions for the country's workers. More than a decade after the enactment of the PRC Labour Law and numerous other laws and regulations designed to safeguard basic labour rights and workplace safety in China, it has become abundantly clear that the adoption of such measures – in the almost complete absence of any parallel protection for workers' freedom of association and the right to collective bargaining – has led to a situation where the law is essentially falling into disrepute through a lack of implementation and enforcement. In practice, employers have been left free to disregard the law with impunity.

The introduction of more or "better" laws in the area of labour and employment will not serve to resolve this fundamental disconnect between formal legislative intent and actual non-enforcement in China today. What is needed are real measures designed to redress the severe imbalance of power between workers and employers currently found in workplaces around the country. In the overall development of China's labour regulatory system since the early 1980s, as described above, the requisite relationship between freedom of association, the individual labour contract and the collective labour contract – or rather, the specific interdependence between these three factors that is needed for normal and healthy labour relations to emerge – has in effect been reversed. Legal arrangements for the application of individual labour contracts came first; this was then extended in the 1990s with the introduction of collective labour contracts in the state-owned sector; and meanwhile, the introduction of workers' freedom of association and the right to collective bargaining – the key factors in ensuring that either type of contract could express and embody the actual needs of the workforce – have been officially postponed until some unspecified time in the future.

Without collective representation in the form of a democratic and properly functioning trade union, workers are in no position – in China or anywhere else – to obtain labour contracts from their employers that can either express the true value of their labour power, as determined by a freely operating labour market, or can serve to safeguard their basic legal rights as workers. They are in no position to negotiate any aspect of the contract, even supposing they were offered such an option or possibility. Furthermore, the notion of grafting an additional regulatory layer, in the form of the collective contract, onto this already weak basis is clearly still more illusory in practice, since it presupposes at a minimum the presence of a representative body that could negotiate on the workers' collective behalf – something that is currently lacking in China, since the ACFTU does not play this role, and which in the case of independent unions is prohibited by law.

Freedom of association and the right to collective bargaining together constitute the animating spirit that can alone give practical meaning and impact to government legislation in the labour rights area. They are primary – not optional or contingent – elements in the labour rights equation, and in the last analysis they also depend upon a third fundamental right, one that Chinese workers are also currently denied by law, namely the right to strike. Paternalistic initiatives by the Chinese government aimed at further "perfecting" the country's labour legislation are arguably better than nothing – but not by a very significant margin.

The days of the socialist planned economy in China are long since gone, and the reality today is that many millions of workers have been left to sink or swim in an economy dominated by private capitalism. In order to keep their heads above water in this new environment, Chinese workers urgently require three basic tools: the right to organize, the right to collective bargaining, and the right to strike.

(China Labour Bulletin recently submitted to China's National People's Congress a detailed list of proposed amendments to the draft Labour Contract Law. The Chinese version of this document is available here:
http://www.clb.org.hk/schi/node/article?revision%5fid=75408&item%5fid=75406 [4] .)

2)China's Labour Trap

http://iso.china-labour.org.hk/public/contents/article?revision%5fid=38989&item%5fid=38988 [5]

China Labour Bulletin wrote the following Op-ed piece. Copyright remains with the original publisher.

Local governments across mainland China have been raising their minimum-wage levels, this year, in response to growing labour shortages. In Shenzhen, the government passed a regulation on July 1 empowering Labour Department officials to impose fines of up to 50,000 yuan on companies that fail to pay the minimum wage.

There's no question that government action is needed to raise the minimum wage and strengthen enforcement in this area. But such steps fail to address several other key problems that contribute to excessively low wages - and hence to workers' inability to earn a decent livelihood.

For example, there are enterprises that withhold workers' wages for months on end, impose unlawful wage deductions and fail to pay legally specified overtime rates.

According to a report issued by the National People's Congress this year, cases of non-payment of wages and unlawful wage deductions accounted for as much as 41 per cent of all cases investigated by provincial labour departments around the country in 2004. In the 16 months before October last year, in one coastal city alone, there were 156 such cases in which the employers concerned went into hiding to avoid investigators.

As many as 76 per cent of migrant workers from the countryside receive no overtime pay for working on public holidays, or on rest and vacation days, according to a recent research report issued by the State Council. The All-China Federation of Trade Unions found this year that around 70 per cent of the country's 100 million or so migrant workers had experience of being paid either late or not at all.

The problem has clearly gone beyond the stage where it can be solved merely by raising minimum wages and strengthening law enforcement.

Indeed, the problem is getting rapidly worse. In 2004, Beijing's court system dealt with 12,462 cases where migrant workers had been paid either late or not at all, involving a total of 330 million yuan, according to figures from the Beijing High People's Court.

Last year, the same court system dealt with 25,987 such cases involving 619 million yuan - or almost double the amount of the previous year.

So serious has the situation become that, at a labour-law conference in March, legal experts proposed that the new crime of "withholding labour remuneration" should be added to the Criminal Law, as a deterrent.

It's not hard to see why so many mainland employers can afford to flagrantly defy the existing laws in this area: workers enjoy neither the right to free collective bargaining nor the right to strike as a measure of last resort. Therefore, they have no effective negotiating power in the workplace.

The one option they do have, when their basic labour rights are violated, is to vote with their feet - and, as we know, they are doing this in ever-increasing numbers.

China's Labour Law and the system of local minimum wages have been in place for about 11 years, and the great majority of mainland workers are well aware of their basic rights.

But even criminalising employers' delinquent behaviour is unlikely to change their ways as long as government inspectors fail to monitor workplaces effectively, and workers are denied any direct and organised involvement. Until that changes, the employers will continue to have little to fear.

Or so, at least, they still seem to believe. In fact, the labour shortage afflicting many southern and coastal areas is a direct consequence of their own harsh employment practices over the past 15 years.

As a researcher from the Fujian provincial labour department recently said: instead of responding to market forces, "enterprises invariably use the minimum wage standard as the basis for setting their general wage scales.

"This has created a vicious circle whereby labour-intensive enterprises in the province currently hit by the labour shortage are unable to hire new workers. The employers are reaping what they've sown."

The government needs to start thinking out of the box if it really wants to improve labour relations, create a healthy labour market and improve political and social stability - that is, if it wants to protect workers' basic rights. It should pass legislation affirming that workers henceforth have the right to engage in free, collective bargaining, and also the right to strike. Without those measures, even criminalising the worst abuses will not deter employers either from failing to pay wages, or from keeping those they do pay at an artificially low level.

In short, a policy of social inclusion must be adopted - one that allows rural migrant workers to negotiate a fair market rate for their labour. Without it, the labour shortage will continue to increase for urban enterprises in southern and coastal areas: more and more migrant workers will decide to opt for a quieter, and healthier, life on the farm.

Han Dongfang is director of China Labour Bulletin, a Hong Kong-based labour rights group. www.clb.org.hk [6]

3)Death from Overwork in China

http://iso.china-labour.org.hk/public/contents/article?revision%5fid=39003&item%5fid=39002 [7]

A new phenomenon – death from overwork (guolaosi) – has become increasingly common in China since the turn of the century and has attracted widespread publicity and comment in the Chinese media in recent months. (A similar phenomenon has long been the focus of public attention in Japan, where it is known as karoshi.) The following are some typical case reports of this disturbing new trend:

- On 7 July 2006, the country's major news websites all carried the story of Liu Yunfang, a textile worker at the Changlong Textile Plant in Fujian, who had suddenly died on the job from heatstroke brought on by sheer overwork.

- On 28 May, Hu Xinyu, an engineer at the Huawei Company in Shenzhen died from exhaustion after working excessive overtime hours for nearly one month.

- Last year, on 28 October, He Chunmei, a 30-year-old woman employed at the Huaxin Arts and Handicrafts Company Ltd. in Guangzhou, collapsed on the road outside the factory just after finishing her third overtime shift in 72 hours. She reportedly had slept a total of only six hours during that period. She never regained consciousness.

- Late at night on 30 May 2005, Gan Hongying, 35, died in her rented room in the Haizhu District of Guangzhou right after completing a four-day stretch of working 14 hours per day. The doctor's certificate read simply: "sudden death" (cu si).

- In June 2004, Yao Fangmei, a 23-year-old woman, and Zhou Zhiyong, a 19-year-old man, both employed at the Taiwan-invested Nangang Shoe Factory, a subsidiary of the Nanhai Zhaoxin Enterprise Holding Company, both died from overwork within a five-day period.  The two shoe workers had regularly worked 14 or 15-hour days at the factory over a two-month period, before finally collapsing on the production line. Both workers died in hospital a few days later.

- At 6.00 am on 21 October 2003, a worker named Jin Wenchao died on the way home from his factory after working for 35 hours over a two-day period. He had been employed as a packer in the Baolian Manufacturing Company in Jiangling Village, in the Longgang District of Shenzhen. 

China's version of the karoshi phenomenon, however, has by no means been confined to the ranks of blue-collar workers. A recent report entitled "A Survey of the Health of Intellectuals", issued by the Shanghai Academy of Technology and Science, found that whereas the average life expectancy of the city's intellectuals 10 years ago was 58 to 59 years, it had now fallen to the level of only 53 to 54 years. According to official news sources, no fewer than 134 professors and academic experts from the Beijing Academy of Social Sciences and various local universities died from overwork over the past five years.

Moreover, in its 2006 Blue Paper on "Developing Human Resources in China (Report No. 3)", the Chinese Academy of Social Sciences ascertained that as many as 70 percent of China's intellectuals currently faced, to a greater or lesser extent, the risk of premature death from exhaustion. The survey report also found that in the cities along China's eastern and southern coast, where the development of specialized skills and technology is particularly advanced, the problem of death from exhaustion among intellectuals was growing steadily more acute and the average age of those dying from overwork was getting steadily lower.

Most disturbing of all: in July 2006, the journal Liaowang Eastern Weekly (Liaowang Dongfang Zhoukan) revealed that according to statistics published by the China Association for the Promotion of Physical Health, at least one million people in China currently die from overwork each year. This is a staggeringly high figure.

Why are so many people from various classes and walks of life dying from overwork in China these days? A number of government officials and leading intellectuals have offered opinions on this subject over the past year or so. Some attribute the problem to the rising pressure to survive and make a living in a society that is growing ever more competitive and materialistic. According to others, it is the country's weak labour laws and the government's failure to enforce them that are to blame. Some commentators say the problem is due to China's inadequate social security system. Others argue that the "death from overwork" phenomenon has arisen because the government has relinquished too much of its former authority over commercial enterprises; and also because the country's business leaders and entrepreneurs place far too little value on the basic health and well-being of their employees. In other words, it is because China's new elite is interested only in making money.

Various solutions to this problem have been proposed in China over the past few years. These boil down to: first, the need to strengthen implementation and enforcement of the country's laws, especially the labour laws; and second, the need to make educational efforts aimed at raising people's awareness of the risks of overwork and at changing the country's overall work culture. Here again, however, as in so many other areas of daily life in China where basic labour rights are regularly ignored and violated, there has been no public discussion of the single most obvious and effective measure that the government could adopt, if it was really serious about finding ways of reducing the appalling figure of one million or so needless deaths across the country every year. Namely: to allow Chinese workers to form their own trade union organizations, or at the very least, workers' health and safety committees in every workplace in the country, so that workers would be able to collectively stand up to any employers who insist on pushing them beyond their safe physical and psychological working limits.

An example of the wider social risks that the government is running by failing to address the problem of excessive and unsafe working hours in China today, came just two weeks ago, on 22 July, when more than 1,000 workers at the Merton Company's Hengli Toy Factory in Dongguan, Guangdong Province, exploded in angry protest against these and other abusive company policies. The workers, who manufacture toys for the U.S. fast-food chain McDonald's, among others, became involved in a violent confrontation with hundreds of police officers who were sent in to restore "normal production" at the factory, resulting in numerous injuries and at least one death among the workers. At the heart of these and numerous similar instances of mass worker unrest in China today are the closely related problems of excessive working hours – by now virtually systemic in most southern and coastal cities – and excessively low pay. If China's intellectuals are now succumbing in ever growing numbers from chronic overwork, one can be sure that the problem is much greater still – although as yet, apparently, under-researched and under-reported – among the country's hard-pressed, 150-million or so migrant workers.