Open letter to delegates to the 2009 ACTU Congress

Dear fellow unionists,

As delegates to this ACTU Congress you have piles of policy before you, but one basic decision to make.

Should you back the ACTU leadership’s support for Rudd’s Fair Work Act or oppose it?

The Congress papers say that “the Fair Work Act sees the end of the direct legislative assault on organised labour” and “represents a substantial, albeit imperfect, transition of the 2006 ACTU Congress policy into legislation.”

That’s just spin! Read the Congress’s own Industrial Relations Legislation Factsheet and the truth comes out (see the basic facts about the Fair Work Act over the page, mainly taken from this Factsheet). Workers are still losing.

The draft Congress Industrial Relation Policy says that the new legislation gives the union movement a chance to “grow unions, protect jobs and advance workers’ interests”.

If the economy were booming we could almost believe this, even though it would still be a recipe for a stagnant union movement. But we’re entering the biggest recession in 70 years, with thousands of jobs already lost and one-and-a-half hands tied behind our backs by Rudd’s law.

If more workers have joined unions since 2006, it’s because the Your Rights at Work campaign was seen as defending their interests. To keep growing we must keep campaigning for our rights, which remain crippled by the Fair Work Act.

It’s high time to drop business-as-usual-don’t-embarrass–Kevin-and-Julia-too-much unionism. This compromised approach gave the vast majority of workers lower wage increases during the resources boom than would otherwise have been the case, and meant that profits and CEO packages skyrocketed (check the Congress Wages and Collective Bargaining Factsheet for detail).

Instead of a vague, feel-good resolution about “campaigning” and waiting for Kevin 2010 to remove the bad bits of the Fair Work Bill, this Congress must adopt two basic positions:

1. For a full-scale, cross-union industrial and community campaign against the Australian Building and Construction Commission, one that will continue until it or any replacement scheme is abolished, and building workers have the same rights as all other workers.

2. For a campaign of industrial disobedience to the most crippling provisions of the Fair Work Act, including its ban on pattern-bargaining, restrictions on the right to take industrial action, restrictions on the rights of unions to organise and enter work sites and restrictions on the contents of industrial agreements.

The November 2008 suspension of charges against CFMEU official Noel Washington shows that workers and their unions can win if they organise to act against injustice. It’s the sort of unionism we´ll need just as much under the Rudd government as under Howard.

Let’s build a campaign now against all that is still anti-worker in the Fair Work Act—beginning with the anti-democratic Australian Building and Construction Commission.

Socialist Alliance National Trade Union Committee

Distributed by Tim Gooden, Secretary, Geelong Trades Hall Council (pictured), as a contribution to debate at the 2009 ACTU Congress

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Yes, the Fair Work Act is WorkChoices Lite!

Check out the following powers of the Fair Work Act, detailed in the Congress’s own Industrial Relations Legislation Factsheet.

If Malcolm Turnbull introduced such anti-worker industrial laws - which violate International Labour Organisation standards - wouldn’t the union movement be fighting them?

1. The Fair Work Act cuts back unions’ right to organise

• 24 hours notice of right of workplace entry, restricted access to employee records
• Bans pattern bargaining, allowing very restricted “multi-employer bargaining” only for low paid
• No restriction on employers using pattern bargaining
• Employer right to seek injunctions against unions using pattern bargaining
• Employer right to challenge the conduct of ballots to frustrate protected industrial action
• No positive rights for union delegates
• No positive rights for workers to join unions and participate in their work
• Almost no recognition of the role of delegates in representing workers in bargaining process
• No requirement for employers to facilitate union access to workplaces
  

2. The Fair Work Act prevents workers from improving their living standards

• Limits award content to 10 listed matters
• Fails to enshrine in minimum standards: 11 public holidays per annum, a right for parents of pre-school children to part-time work, rights to information and consultation in the workplace, retrenchment pay for employees of smaller businesses, and any guarantee that workers entitlements will be paid first in the case of company failure
• Restricts matters that can be covered in an agreement, banning enterprise-specific unfair dismissal and right of entry agreements.
• Allows award modernisation that could result in reduced standards in some industries and occupations
• Maintains existing AWAs, including ones that would not meet the government’s own standard for fair agreements
• Allows an employer taking over a company to refuse to employ workers transferring from business being taken over
  

3. The Fair Work Act keeps penal powers, including those established by Work Choices

• Requires secret ballots for protected industrial action
• Preserves the Work Choices requirement that employers deduct strike pay even in circumstances where employees are at work
• Allows the use of scab labour
• Doesn´t give workers the right to conduct meetings to prepare for bargaining
• Increases the penalties Fair Work Australia can apply to “ensure compliance” with its rulings
• Bans industrial action in support of economic and social campaigns (like that against Work Choices)
• Bans industrial action even where an employer proposes radical workplace restructuring
• Keeps the anti-union provisions of the Trades Practices Act
• Leaves a dispute with the boss to be settled in the normal court system unless the boss agrees to have it judged by Fair Work Australia
  

4. The Fair Work Act discriminates against different groups of workers

• Removes “high income” earners from award coverage
• Leaves contract workers with fewer rights than employees, including no rights to union representation or collective bargaining
• Allows a longer qualifying period for employees in small business
• Makes it easier for small business to sack workers
  

5. The Fair Work Act maintains unions in a weakened legal position

• Does not actually define the rights of unions
• Abolishes unions as parties to agreements, which are made between employers and their employees
• Does not require unions to consent to changes to an agreement, even when the union is covered by the agreement.
• Fails to enshrine a right for all employees and unions to be informed about the strategic designs of the employers
• Provides no clarity about where federal or state laws apply, much less enable workers to opt into the federal or state system

The ALP and the right to strike

Leslie Richmond

8 December 2008

Having ridden to power largely on the back of Australian people’s concern and anger over attacks on their rights and conditions at work, Labor have – a mere twelve months later – at last unveiled their shiny new proposed industrial relations legislation. So, what are we to make of it?

The most fundamental power any working person has is their ability to withhold or withdraw their labour, the ability to take industrial action.

The true test of any government’s commitment to the well-being of workers is not their rhetoric, but whether they allow workers to organise themselves unhindered and, if necessary, to strike.

Labor’s industrial relations policy – with its continuation of measures that aim to inhibit union activity and to prevent or outlaw collective action – clearly shows them to be false friends to the majority of Australians. This bill gives the lie - if any further evidence were needed - to Labor’s concern for “working families”, and allies them squarely with the leaders of big business.

For decades, Labor and Liberal governments at all levels have championed the rights and efficacy of the private sector and an unfettered market. Yet surely, legislation that prohibits workers ability to organise in their own interests against their employers amounts to the government taking sides. It amounts to interfering in the market.

However, both Labor and Liberal have never displayed the slightest compunction in acting this way. Clearly the guarantee of rights flows only in one direction.

For the ACTU or any union official to champion this legislation would be a severe mistake, and an abrogation of their responsibilities to represent present and future workers.

The strong grass roots support for the Your Rights At Work campaign represented not simply a hatred of John Howard. It was also a reaction against the political imperative behind his legislation – the taming of unions and disempowerment of workers.

The ALP’s bill, and the Opposition’s easy initial acceptance of it, show that Howard’s political agenda is alive and well in the parliament and embraced wholeheartedly by the this country’s ruling elite. They’ve thrown some sops to the unions, and dressed everything up in pastel-shaded Ruddspeak, but at its heart lives the spirit of Workchoices.

The Australian Building and Construction Commission continues its merry inquisition unhindered; the already tame Industrial Relations Commission will lose what remaining rotting teeth it still has; anaemic right of entry provisions leave control of the process effectively in the hands of the employer; and nestled among the technical niceties of the brave new regimen of “approved” industrial action is the fact that the right to strike — a right won with blood — will no longer belong to us.

The right to strike is our right to declare and demand our humanity. It is our weapon against oppression that allows us to fight not just for our own rights, but for all. It is an expression of unity and power that strikes true fear into governments and bosses.

Any party that would refuse us that right, that would seek to undermine it, implicitly condones exploitation and inequality and does not deserve the support of workers. The only “right” the major parties truly believe in is that of their own — and of their well-heeled mates — self-conferred right to unchallenged power. The rest of us simply don’t figure in their world view.

Workers must look to parties and organisations that truly support them, but above all, we must look to each other and outside of the parliamentary process to win back and safeguard the freedom and dignity won for us over the last two hundred years by the bravery of working people who would not “behave”.

From: Comment & Analysis, Green Left Weekly issue #777 3 December 2008.

No co-operation with the ABCC!

Dear Comrades,

These new penal laws that the ABCC rely on have been around for over two years and nearly 12 months of the current Government. Now there is a real risk that workers will start going to gaol for being unionist and organising workers. I think it's time to start putting words into action. Now is the time to decide which side you're on.

I am standing beside Noel Washington and pledging no cooperation with the ABCC.

These are bad laws and are only designed to weaken the union movement and conditions for workers. I cannot support a Government that supports these laws and allows workers to be dragged before the courts for being unionist.

Please sign up and let the Government know we are serious. There can be only one outcome to this and that is workers win the right to organise the way we want to. Not the way that makes the bosses and the Government happy.

We are not slaves and our organisers are not criminals.

Yours in Solidarity
Tim Gooden
Secretary Geelong Trades Hall Council

Labor Omnia Vincit

Text of sign-on statement:

No co-operation with the ABCC

The Australian Building and Construction Commission is an ideologically driven organisation and was set up by the Howard Coalition government in October 2005 to destroy the effectiveness of the unions in the building industry. These unions have led the way in setting benchmark wages and standards of health and safety that have benefitted all working Australians. The ABCC operates like a police force with extensive coercive powers and secret investigations. There is no right to silence- refusing to attend hearings or answer questions can lead to a six-month jail sentence.

The ABCC's predecessor, the Building Industry Task Force, was set up after the $60 million Cole Royal Commission into the building industry. Contrary to the claims of some bosses and media, the Commission found that there is no "endemic lawlessness" perpetrated by the unions in the building industry. We are asking for nothing more than what employers already have; the right to meet with our members and representatives, before, during and after work and the right to defend our working conditions.

Penalising unions for representing workers' rights using hefty fines and threats of imprisonment has to STOP NOW. If the powers of the ABCC remain all Australian workers will have their right to organise and seek representation in a union undermined.

We, the undersigned refuse to cooperate with the ABCC and to pay fines imposed. We are inspired by the fine example set by CFMEU member Noel Washington in refusing to bow to the ABCC's intimidation. We pledge support for all union officials and members who are subject to the ABCC's powers.

We call on all unions to join a campaign of industrial action if any unionist is convicted for not cooperating with the ABCC

Name/Union/Signature

Dare to struggle - dare to win! If you don’t fight, you lose!

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Download sign-on statement and return, with signatures, to: GTHC, 127 Myers St, Geelong. Tel 03-52211712, or 0438 088 112 and fax 03-52231115. See ACTU's television ad opposing the ABCC

What union response to Garnaut?

Tim Gooden

Green Left Weekly, 12 July 2008


Right at the beginning of his draft report on climate change, Professor Ross Garnaut points out that global warming can’t be beaten unless an international “prisoner’s dilemma” gets resolved.

What’s that? Simply, that each globally competing national economy, like Australia, gains most short-term benefit “if it does less of the mitigation itself, and others do more”.

But if all countries act in this way there will be no solution to the overall climate crisis — the total worldwide rate of investment in sustainable, carbon-free technologies will fall way short of what’s needed to stop global climate catastrophe.

Survival requires that all countries forgo short-term gain and find the ways to work together to keep lifeboat Earth afloat. Otherwise, it’s everyone for themselves, and survival of the richest, the most powerful and the most warlike (and maybe not even of them).

The idea that survival depends on cooperation is nothing new to working people and unionists. It has been the heart of unionism ever since workers found, through painful experience, that we have to unite to defeat those who wish to divide and defeat us.

Of course, that’s not the approach of the rich corporations and nations, especially the United States. While the US establishment now doffs its hat to the critical threat of global warming, a serious plan to reduce greenhouse gas emissions has never taken shape in Washington. Corporate America is determined not to concede any economic edge to rivals in Europe, Japan, China and India.

Now the federal parliamentary opposition has decided to run the same line. Against the advice of former Liberal environment minister Ian Campbell, opposition leader Brendan Nelson is calling for a delay in implementing carbon trading for fear of “damaging our economy”. Nelson has allies on the Labor side of politics, not only in a state treasurer like NSW’s Michael Costa, but in the Australian Workers Union national secretary, Paul Howes.

After the Garnaut report was released, Howes said: “The federal government should be prepared to drag out [its climate change] timetable, if necessary, to ensure that there aren’t any errors in the design of their emissions trading system”.

But even Garnaut, an economic conservative, says of this sort of call: “To delay is to deliberately choose to avoid effective steps to reduce the risks of climate change”.

As to the supposed threat to the export-oriented, energy-intensive sectors of the economy that concern Howes, Garnaut notes a glaring fact of economic life, to which the AWU leader seems blind: “Our trade-exposed emissions-intensive industries have valid concerns … But when assessments of the reasonableness of arrangements for trade-exposed industries are made, we should be mindful of the wider context. [Their] highest possible obligations under an emissions trading scheme … would represent a small fraction of the resource sector’s increased revenue from higher export prices in recent years.”

Howes’ idea of a trade union response to Garnaut is basically to argue for the commercial interests of the corporations in the industries where the AWU presently has members and union coverage. For Howes, defence of jobs means defence of existing jobs, no matter how carbon-intensive the industry that creates them.

This is the worst possible approach for the trade union movement to take to global warming. It ties us into downplaying the urgent nature of climate change and into abandoning serious thinking about, and planning for, how to achieve climate sustainability. It shifts responsibility to others — especially those whose idea is that the bulk of working people will have to bear the economic burden of the shift away from a carbon-intensive economy.

Climate sustainability can only come by replacing, as quickly as possible, jobs in polluting, carbon-intensive industries with “green jobs” based on renewable technologies — even if that brings reduced AWU membership!

Global warming is union business

How is it to be done? The release of the Garnaut report dramatises the fact that the trade union movement urgently needs to develop its own positions on how to fight global warming. Our movement has a very long way to go in working out the policies that would confront the threat while defending the living standards of working people.

The first job is to use unions’ organisational capacity to help get the message out about how serious the global warming crisis actually is. Unfortunately, with very few exceptions, union journals and web sites say nothing about climate change: global warming should be “union business” but even on the ACTU site, it doesn’t feature as a lead issue.

Yet, all workers need to be as informed about climate change as they were about John Howard’s Work Choices laws. That way, unions can begin an informed debate, among the whole membership and not just at the “peak” level, about a policy that both addresses the seriousness of climate change and guards the interests of workers.

For example, how can we answer the following vital questions?

•Is a maximum atmospheric concentration of 450 parts per million of greenhouse gases safe enough, as Garnaut says, or does it already risk runaway climate change, as NASA climate scientist James Hansen insists?

•What targets are adequate for meeting short- and medium- term greenhouse gas reduction goals? The 25-40% cut on 1990 levels by 2020 advocated by the new Southern Cross Climate Coalition (between the ACTU, the Australian Conservation Foundation, the Australian Council of Social Services and the Climate Institute)? Or should we be striving to stop greenhouse gas concentration increases as soon as possible, with the goal of reducing them to a long-term safe and sustainable level of around 300-325ppm of carbon dioxide (as argued by Hansen)?

•Can any carbon trading scheme, as proposed by Garnaut, reach such goals? To date, the price of carbon under all existing trading schemes has been set far too low to force carbon-intensive industry to abandon its polluting practices quickly enough to have anything like the impact on overall emissions that the environment needs.

•What are the alternatives? Why, for example, doesn’t the union movement insist on the “polluter pays” principle. It could be based on the present audit of industry greenhouse gas emissions being carried out by the Rudd government. Polluting firms could be given deadlines to convert to sustainable practices and, if they refused to upgrade to low emissions technology, closed down with the workers involved being retrained on full pay for work in new, sustainable industries.

•Can the transition be left to private industry? Many argue that the climate crisis is so great, and the transition needed so vast that something equivalent to a “war effort” against carbon pollution is required. As a statement from participants in the April Climate Change — Social Change conference in Sydney said: “Climate sustainability will never be achieved if basically entrusted to the profit motive and the market. At the core of any successful transition will be a public agency or agencies entrusted with guaranteeing that adequate targets are met.”

One thing is certain: it will not be “the market” rejigged, by even the most sophisticated carbon trading scheme, that will be the critical force in the shift to a carbon-free economy.

It will be working people who are aware of the issues and determined to play a role in avoiding climate catastrophe. We will be central to identifying and eliminating waste and pollution in the workplace, closing down the old industries and developing and building new ones.

The trade union movement needs to realise this and get serious now about becoming a force for progressive campaigning and policy around climate change.

[Tim Gooden is the secretary of Geelong Trades Hall Council. These are his personal views.]

From: Comment & Analysis, Green Left Weekly issue #758 16 July 2008.

Protest Iemma’s power sell-off outside NSW ALP conference

Dick Nichols

9.30 am, May 3, Darling Harbour—be there against Iemma’s power sell-off!

It’s time to apply our pressure against theirs. All the forces in favour of the electricity privatisation proposed by NSW premier Morris Iemma and treasurer Michael Costa have been heavying the delegates to the NSW ALP conference as well as NSW Labor MPs.

Within the ALP the pressure comes from the very top, beginning with Kevin Rudd, energy and resources minister Martin Ferguson and parliamentary secretary and ex-ACTU leader Greg Combet (note to Greg: whatever happened to NSW electricity workers’ rights at work?) All have come out in favour of electricity privatisation.

Within the state government the ministers belonging to the “left” faction (like Ian Macdonald, Linda Burney and John Watkin) also support the sell-off, to the point that Iemma tried to have the “left” component of the 16 parliamentary delegates to the state conference made up of cabinet ministers only!

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· Click here to watch a slideshow of the case against NSW electricity privatisation

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Along with the sticks come the carrots. Iemma is presently working out a new stick-carrot mix for the NSW cabinet. According to the internet gossip sheet Crikey “his advisers believe that he can gain critical backing [for privatisation] within the parliamentary party by rewarding factional hacks with seats at the Cabinet table.”

One obvious ploy would be to give a cabinet position to an MP from the Hunter region, which threatens being as devastated by the sale of the coal-based power industry as the Latrobe Valley was in Victoria. (The only Hunter MP presently in cabinet is hated treasurer Costa).

To date, despite the massive public opposition, only a minority (17 to date) of Labor MPs have come out against Iemma’s electricity sell-off. The spineless majority of the ALP’s “representatives of the people”—petrified at the thought of their parliamentary careers being destroyed by Iemma’s wrath—invoke the fictional rule of ALP parliamentary caucus solidarity to explain their strange silence on the issue.

The only answer to all this filthy pressure coming from the NSW business elite via Iemma, Costa and their “left” cabinet ministers is to strengthen the campaign against the sell-off.

Our most immediate job is to get as many people as possible to the May 3 rally outside the NSW ALP conference at Darling Harbour. The bigger this rally, the stronger the anger with Iemma and Costa that it expresses, the greater the chance of wavering delegates and MPs getting the point that they will have no future if seen to support the sell-off.

The decision of Unions NSW to ask the Sydney May Day committee to shift the city’s traditional Sunday march to Saturday and have it finish outside the ALP conference is a good step towards building the rally.

Over the years May Day in Sydney has become a symbolic stroll through the streets: having it support the May 3 rally against electricity privatisation restores relevance to May Day itself and says that the working class and union movement history it celebrates lives on around the critical issues of the day.

The Socialist Alliance NSW Trade Union Committee will be doing everything it can to build the May 3 protest. It calls on all Socialist Alliance members and our fellow unionists to be there.

Let’s all shake Darling Harbour with a mighty roar of rejection of Iemma and Costa’s power sell-off!

Dick Nichols is the National Coordinator of the Socialist Alliance

The Waterfront - 10 Years On

Hanging in pride of place in the Wombat Hole is a framed piece of the Australian newspaper, dated May 8, 1998, with Jenny George, the CFMEU's Martin Kingham and others leading a beaming bunch of workers forward under the slogan "Back At Work". It seems appropriate, therefore, on the 10th anniversary of the 1998 Waterfront Dispute, to take a quick look at the "State of the Unions", after more than a decade of Howard, union-bashing, WorkChoices and the Your Rights At Work campaign.

On the Waterfront, workers downed tools at this morning and held a minute's silence to mark the occasion, and MUA secretary Paddy Crumlin dismissed any effect the dispute may have had on the union, and jobs. On the contrary, the chickens are beginning to come home to roost: #1, #2, #3, #4.

From the Waterfront Dispute, to the present day, and things continue to look interesting:
Over at Green Left Weekly, the latest news is that the NSW Teachers' Federation is leading its members out on a strike tomorrow, after the NSW Government refused to negotiate a state-wide staffing agreement.

The campaign against electricity privatisation in NSW continues, with the May Day Committee deciding to move the day of the May Day march this year in order to coincide with the NSW ALP emergency State Conference. This is no small bikkies, as even Bob Gould has pointed out.

Down in Victoria, 65 workers occupied the factory of SEP Print after the company sacked its workforce without notice and went into receivership on March 20. Union Solidarity is still chugging along too. Also in Victoria, the CFMEU is continuing on a wage campaign in the construction industry. This is despite the ongoing existence and persistence of the ABCC, a protest against which will be held this Thursday in Sydney.
In Adelaide, the fight is on to save Work Cover, currently under attack frm the state "Labor" government.

Of course, while they might have won the battle against WorkChoices, the unions (and all workers, in fact), are still up against Labor's WorkChoices-lite of "Forward With Fairness". And that won't go away without a fight.

Despite whatever good work they might be doing elsewhere, however, the unions are still a tad shoddy at dealing with Climate Change. Some of them will be at the Climate Change | Social Change Conference this weekend, however, along with others in the vanguard of the struggle to save the world. (Small things, we know..).

WorkChoices and Neoliberalism by any other name...

Deputy Prime Minister Julia Gillard donned the dark frocks for a funeral today - the (hopefully) final laying to rest of the Bad Boy of WorkChoices: Australian Workplace Agreements (AWAs). The Governor-General gave the things their lethal injection la night, and they were put to sleep, and then - on the second anniversary of WorkChoices - they were finally relegated to the dustbin of history.

Well, new ones, that is. There are still apparently upward of 1 million of the little bastards floating around, and many may not end until 2013. Worse yet, the ALP's "Forward With Fairness" policy replacement isn't really so different to WorkChoices itself, leading many unionists and those on the left to call it "WorkChoices Lite" - and with good reason. The wombats are waiting for many a bubble to burst on that front. Hopefully it won't take too long (although it could be helped along in a couple of ways).

The ALP is making no immediately obvious moves to get rid of the ABCC either - the star-chamber empowered secret police for the building industry, which has already been responsible for gross violations of civil liberties, not to mention being a centrepiece in the ongoing attacks on workers' rights in general. It won't be scrapped until 2010. And even if they remove it, they are likely to replace it with something not too dissimilar (if a little cuddlier).

You might be forgiven for thinking that, what with the ALP in power in all states and federally, we might be set for some meaningful changes. Well, maybe there'll be some changes, but it depends what kind of changes you are looking for. And with NSW Labor's heart set on privatising the state's energy supply (soon to be followed by the ferries, the lottery, perhaps the oxygen?) the true stripes of Labor can be seen.

Against around 80 percent public opposition to the sell-off, against their own party platform, and against the rebellion of the unions and over a dozen of the Government's own MPs, Iemma and Costa insist that come hell or high-water (and let's not get started with the idiocy of a desalination plant, and all the back-room deals involved in that one) they will follow through with the sell-off.

Fortunately, we have a new federal Labor government, which can remind the state government what the "party of labour" should be all about. Right? Well, apparently not. Rudd has also come out in support of Iemma and Co, which must feel relieved to get some kind of support after all the sex-scandals and exposure of dodgy developer deals in Wollongong, and pedophile ministers, and collapsible tunnels, and so on and so forth, which have plagued Premier Iemma since he was handed the poisoned chalice by Bob Carr as the latter trundled off to his retirement job of running NSW from Macquarie Bank proper (instead of just its political wing - the NSW ALP).

So ok. Maybe Rudd isn't the white knight some might have hoped for (even if he is going to inject money into the Murray). But Labor got in on the back of a genuine tidal wave of support, not a small part of which was around the opposition to WorkChoices, organised by the ACTU and others in the form of the "Your Rights At Work" campaign. So surely the hero of the labour movement, the real "people's champion" of the election - former ACTU Secretary Greg Combet - can be relied upon to see what's right and what's not, and stick up for the people, for common sense and for the planet (given the likely need for government control of energy production in order to prevent runaway Climate Change).

Ummm. No, actually. As even Bob Gould points out, Combet has counted his cards, and is relying - along with the rest of the Labor Left - upon a friendly deal from Poker-face Rudd to land the right bums on seats in cabinet. So, not a lot has changed in the "bump-me-into-parliament" world of the ALP's stranglehold on the unions and labour bureacracy. And not even the fact that his own electorate will be hard-hit by the sell-off can make him budge. "Angry voters" about as non-metaphysical as it gets for politicians, yet even that apparently wasn't enough of a carrot.

The shining light - if it can be called that - is the staunch opposition of the Unions NSW leadership to the coming privatisation, to the point of taking it to the floor of the NSW ALP state conference in early May, where they are planning to win. What is less clear, however, is what they plan to do if they win on the conference floor, and Costa then goes ahead with the sale. Gould has been railing of late against the demons he sees lurking in every left-wing critique of the ALP of calls for the expulsion of Iemma and Costa from the ALP.

Now, the wombats have no illusion that that will happen, but we wonder, then, what will happen when (if?) the vote goes against the government, and they still go ahead. It certainly challenges the logic of those (such as Gould, who certainly sees this fight as important, vital even, in the fight for the ALP) on the left in the ALP - and who see it as a vehicle for socialists - if even when the party conference, the party platform, AND the unions are on your side, you can't make the bastards budge.

Over a hundred years ago, the Australian Socialist League (ASL), and other socialists, put their hopes in elected representatives of the labour movement to bring about socialism in short order. Time and again they were disappointed by their elected Labor MPs, who took any and every opportunity to sell out - fast. Against all reason, however, they maintained a faith that it was a matter of individuals, not of the larger socialist strategy of the day, that was at fault, and that if only the "right people" were elected, all would be fine. And it got worse once the ALP-proper was set up.

Little appears to have changed in the interim, and socialists in Australia are faced with an unpleasant choice of working within the ALP - the perceived "real party of labour" - and having your efforts marginalised and your representatives bought off, or working outside Labor, in a party or a manner that doesn't mean apologism for neoliberal governments, but with the popular, and well-funded, monolith of the ALP to contend with.

And for those of us outside Labor - in the Socialist Alliance, in other socialist groups, in the Greens, the unions and elsewhere - we are faced with the equally daunting task. The task of overcoming a neoliberal ALP's hegemony over the Australian working class, of acheiving the kind of political and organisational unity necessary to create a viable alternative political vehicle of the working class in Australia. A vehicle which will be capable of bringing about something which has seldom - in the century since the ASL, SDF, ASB, VSP and other early socialists thought it so inevitable - seemed so far away as it does today: "socialism in our time".

This challenge is one which requires us all to rise above sectarianism and personal spite, and honestly appraise the situations before us when searching for answers - the right-wing nature of the new federal ALP government, the very real success of the Your Rights At Work campaign (and the expectations this has sown in many people), the limited but still tangible success of the Socialist Alliance, and the rise and rise (and worrying contradictions) of the Greens coupled with the importance and surging vitality of the struggle to prevent runaway climate change.

One good place for us all to start would be the Climate Change | Social Change Conference in Sydney on April 11-13, which will feature many of the key players in the various struggles mentioned above - both from Australia and from around the world. But the question of revolutionary strategy, of how to go beyond the limitations of the current juncture, is an ongong one. It is one which the Socialist Alliance was formed to help answer, but we certainly can't (and certainly don't intend to) answer it alone. We need your assistance in that, dear reader.

China’s new Labor Laws: employment contract reforms

Chris White reports on Your Rights at Work in China: November 2007

China’s new labor law system on employment contracts promises to protect their precarious workforce from the excesses of capitalism.

The 10th National People’s Congress (NPC) passed Labor Law Contracts on June 29th 2007. They are in force from 1st January 2008.

What are the industrial relations issues addressed? What are the new rights at work?

In Part One, I give an overview of the provisions to regulate employers whose exploitative practices have gone too far. Professor Liu Cheng comments on their likely impact.

In Part Two, I report on the initial compliance reactions. Major corporates prior to January 1st 2008 sought to avoid the new law by dismissing and re-employing their workforce. But now they have been publicly exposed, they have to comply. The role of the All China Federation of Trade Unions ACFTU is stronger.

In Part Three, rather than going down PM Rudd’s collective bargaining road, the debate in China is on a new arbitration system.

Readers may compare these modest Chinese labour law reforms for precarious workers with the reforms from PM Kevin Rudd and Minister for Industrial Relations Julia Gillard for Australia’s precarious workforce.

Australia’s democracy decisively rejected Howard’s WorkChoices. It provided less protection for vulnerable workers than these new Chinese employment contract reforms.

Australia, after the great strikes and lockouts of the 1890’s, turned to arbitration to prevent and settle disputes. The ghost of Judge H. B. Higgins may be shaping China’s labour reforms!

Part One The Reforms and their Impact

I reported in Evatt On-Line in February 2007[1] on China’s unprecedented public debate in over these new Labor Laws. As well, the US corporations with their neo-liberal ideology lobbied National People’s Congress (NPC) delegates hard to water down the original provisions. They had some success on the details.[2] These labor law contests in China have relevance for workers and their unions’ worldwide.

I returned to Shanghai on October 12th 2007. I followed up a key adviser on the labor laws, Professor Liu Cheng, from Shanghai Normal University, Law and Politics.

Liu Cheng: ‘In the context of globalisation, Chinese labor law is not only something of China its own, but also of America, Europe, and other parts of the world. The trend of “race to the bottom” and deregulation should be deterred by way of global unity. Chinese labor legislation has suffered MNCs’ attack; Chinese labor rights has been endangered by not only Chinese dark-minded employers but also dark-minded employers abroad—such MNCs as Wal-Mart is exploiting Chinese workers by way of driving down acquisition price to make its suppliers non-profitable. This compels the suppliers to exploit workers by way of violating labor law in order to ensure their profit. What’s more, it also hurts fair competition--the dark-minded employers will take advantages of low cost to beat moral employers. It’s apparent that without labor law, there would be no fair competition; without labor law, there would be no social stability.’

I asked about Liu Cheng’s US and Europe visits.[3]

Liu Cheng: ‘I found it necessary to get support from outside China, to counter the foreign corporations lobby, otherwise there may have been something worse for the Chinese workers. So I made USA visits explaining to the NGO anti-sweatshop lobby, unions and Congress the debates. I argued with four lawyers from the American Chamber of Commerce, but did not convince them.

I received good responses from European unions and NGOs who made contact with National People’s Congress delegates to support the changes. I interviewed some European government leaders, some employer organisations and spoke to about 50 foreign journalists at a press club. European employers now support the new Employment Contract laws…so although the end represents compromise, with some details in the protections for workers and the union role curtailed, it is a victory.’

The provisions apply to all employers. The main reason is to regulate the exploitative employer practices in China’s majority private sector enterprises. Here there are millions of precarious and marginalized workers. In China’s state sector, there is more job security, payment of wages, respect for labour law etc and union consultation, and these new laws still apply.

The key solutions are described. These indicate the industrial relations problems being tackled.

Back pay and no forced labour

It is unbelievable, but such is the capitalist violation of labour rights and the extent of forced labour in China that not only are migrant workers from the countryside in sweatshops factories not paid the minimum wage nor overtime when working seven days a week to finish contracts, but for months not paid at all.

Unofficial strikes over employers not paying wages are widespread. Stories in the Chinese press reveal workers treated as slaves[4] and ‘wildcat’ strikes and workers beaten to death by company thugs for protesting about not being paid![5]

The new law says wages and overtime have to be paid. The Labor Bureau can direct an employer to pay wages owed within a specified period, failing which an order for damages at between 50 and 100% of the amount outstanding can be made.

Liu Cheng: ‘In the past many employers regarded the labor law requirements to pay wages when due as rubbish, but now employers have to take these new laws seriously, and this is a big improvement. Some 40% of overtime is not paid, so the new law is to ensure overtime and penalty rates are paid.’

Can migrant workers not being paid go to a judge in a People’s Court for an ‘order to pay’?

Liu Cheng: ‘Yes, they can go directly and it should be speedier. The cost of litigation is most important, for if the cost is very high the workers will not be actually protected and the employers can violate the law. The employers have to be punished efficiently if they do not pay the wages and have to take the new law seriously. Although more detailed dispute settlement processes are to be determined later in 2008, this Labour Contract law helps give the worker more protection.’

I read in a China Labor News Translation a report[6] where a Shenzhen furniture factory worker fought long and hard to get back unpaid two years overtime through the court system.

From no contracts at all to deemed minimum contracts

Liu Cheng: ‘Much past practice in four in five private enterprises in China have not even signed job contracts with their workers. The lack of contracts leaves workers in a legal limbo. This meant work rights were not enforced and no access to the pension fund as there was no proof of an employment contract and the employer denied liability. So now the employment contracts must be in writing and failure to do so means the employer faces liability for double wages. The new law says there is a written contract and provides minimums.’

In 2008, Chinese Courts have to recognise that labor law deems a contract to exist. Minimum wages and conditions are based on comparable collective agreements or regional provisions.

Liu Cheng: ‘Also the Labor Bureau can order damages if the employer refuses to comply…so minimum living standards are much more protected.’

Crack down on forced labour

When hiring workers, an employer may not require them to provide any surety or collect property from the worker as collateral. The employer may not retain the workers’ resident identification cards or other papers.[7]

So a crackdown is promised on the prevalent practice of forced or bonded labour, in their various disguises. The ACFTU has to unionise these migrant workers. We shall see.

Short-term contracts at an end

Liu Cheng: ‘In many private companies which signed contracts with workers, the duration was often less than one year. Employers concluded employment contracts with the same workers four times in one year. Casualisation is prevalent. The employers refused to sign long-term contracts to avoid legal obligations such as accident pay, health benefits etc.’

‘Now with the new law, after two short term contracts a more permanent open-term contract must be signed. That has to happen so as to prevent many short-term contracts. The third open-term contract then provides for health insurance and the employer is liable for severance pay.

A fixed term contract now has severance pay of one month’s pay for each year of service. Most fixed term contracts can’t be changed by the employer but by negotiation.’

The more permanent contract is also compulsory for those workers with service of no less than ten years, or is ten years away from retirement.

When reemploying after a state owned enterprise has restructured the permanent contract is to be used, as it is when the renewal occurs following the conclusion of a fixed-term employment contract on two consecutive occasions.

Combating casualisation

Provisions regulating part-time work are made. A ‘Part-Time Labor’ category is allowed in the final law, a ‘non-full-time engagement of labour’.[8] This employment is remunerated by the hour and is terminable at any time without notice or severance pay. But it is restricted to its status, to an average of four hours daily and ‘the maximum remuneration settlement and payment cycle for part-time labor may not exceed 15 days. Article 72.’

This is a legitimate ‘casual’ position. If implemented, it will assist in reducing long-term casualisation, with its many problems.

Probation no longer to be abused

Workers can no longer be on long probationary periods. An employer may stipulate only one probation period with any given worker and not less than 80% of the local minimum. The new standards are: less than one year contract, less than a month probation; 1 to 3 years, 2 months; not less than three years, 6 months.

Transmission of business and contract

The employers cannot avoid liability with a change in the name of the company. Transmission of business also transfers the employment contract, ‘…under the new law, the employment contract will be maintained into the new company…’

Sacking at will to cease

Corporations opposed the termination reforms. These have moved dramatically away from dismissal at will. Employers sought to reduce the costs of terminating workers.

Greater job security is to be put in place for those workers engaged on an ‘open-ended’ regular basis. There are costs for illegal dismissal.

Dismissal is to be allowed only on specific grounds: such as by consent; being incompetent; for serious misconduct; incapacitated by non-work related injury; for mass redundancy (where there are substantive and procedural requirements); and termination by 30 days notice. An employer cannot dismiss for work related injury and e.g. pregnancy.[9]

The Law enhances the role of the union in the termination process.

Where an employer unit plans to dissolve a labor contract unilaterally, it shall give the trade union advance notice of the reasons. If the employer unit violates the provisions of laws and administrative statutes or the labor contract, the trade union has the right to demand that the employer unit take corrective action. The employer unit shall study the trade union's opinions and notify the trade union in writing of the outcome of its handling of the matter. Article 43.

The social interests of workers in redundancies of over 20 are recognised. Article 41 gives priority for protection for those with long service, those who are the only ones in their families to be employed and whose families have a senior citizen or a minor who needs to be provided for. They have 30 days notice and the circumstances explained to the union.

Are these tougher restrictions an incentive for employers to use avoidance tactics, such as forms other than regular on-going contracts?

Liu Cheng: ‘In theory it looks like this, but in practice they cannot, because of severance pay of one months pay for each year of service for most dismissals. Even with shorter terms, still severance pay applies. And if this does not occur, then the employer has to pay the penalty of double salary to the employee, so in practice the risk is so great and the economic consequences strong. Maybe there will be some employers who use part-time and casual contracts, but most employers won’t put all their employees onto part-time or casual.’

I read reports where employers preparing for the new laws are converting short-term workers into permanent contracts. Others are trying the reverse to pre-empt the changes (see below).

I asked about contracts for project work where severance does not apply. Liu Cheng said most employers would not employ workers on separate projects.

Liu Cheng: ‘ With projects such as building bridges, the employer may conclude one project contract, but may not in practice do more as the employer wouldn’t get labour for the next projects…maybe one off, but not continuously.’

There may be grey areas, where the provisions appear ambiguous. But the employer risks severance pay if dismissing. ‘The cost of violation is very important. The cost will compel the employers to abide by the labour laws.’

Liu Cheng does not think that the more skilled workers will have greater job security over the unskilled. I thought this was the experience in other countries. Will this assist migrant woman?

‘I think in the recent past in China the migrant worker was hurt by the employer, but now their living standard can be improved when the employers abide by the new laws. So now we inform the migrant workers of their rights.’

The ACFTU aims to unionise millions of these migrant workers coming from the countryside into the cities and sweatshop factories.

It is not easy for the ACFTU to move from its servicing model to a new grass roots organising model. There is debate whether this is happening.

Staffing issues: Labour-hire regulated

Employers lobbied against the strong regulation of many labour-hire firms and their use of ‘dispatch’ workers. The new law means there will not be financial reasons for management to sack sections of their workforce to replace them with cheaper labour-hire with ‘staffing firms.’

All dispatch workers from staffing firms must be hired permanently for not less than two years. There is a formal written contract with the same rate and benefits as workers in the user firm in similar work. A minimum wage is paid even when not placed. The worker may join the user firm’s union. Restrictions are a prohibition on user firms ‘on-selling’ dispatch workers to other firms; labour-hire be implemented ‘generally for short-term, supplementary and substitute positions’; and employers may not arrange to have staffing firms to place workers with themselves or their subordinate units.[10]

Liu Cheng: ‘The employers say that this is very tough, but it is only a slogan. In practice, the assessment of discrimination will be difficult, but the tactics of labour hire firms will not be as discriminatory. The outcome does no longer require the employer to hold money in reserve to cover workers insurance. Nor is there an automatic conversion to a permanent basis.’

Non-competition

The employers’ lobby watered down earlier drafts for workers who leave with a confidentiality clause, a non-compete clause on trade secrets or intellectual property.[11]

When a professional, skilled or worker who has the obligation to maintain the confidentiality of his employer’s trade secrets, the employer may have a restrictive confidentiality clause. This stipulates the employer shall pay financial compensation to the worker on a monthly basis during the term of the competition restriction after the worker leaves.

If the worker breaches the competition restriction provisions, he shall pay liquidated damages to the employer. There is less compensation for the worker affected, one month’s salary rather than one-year. Geographic restrictions are dropped.

As the Chinese workforce move into more highly skilled technology companies, these restrictions protect existing employers, not the new technology companies. They inhibit the movement of professional and skilled labour.

Liu Cheng: ‘ I think there should have been a ceiling for the damages on the worker and for the compensation to the employer, otherwise employers will take their advantages…to more profitable workers, so, I think there should be more reforms and damages should be lower than three times the yearly wages and the compensation should be no less than 40% of their normal wage, and without such ceiling and floor, it will not be better. In 2008, there will be more detailed rules formulated for these labour laws promulgated by the State Ministry of Labour and Social Security.’

OHS tougher

The lack of compliance to OHS obligations is notorious in China. One new provision is:

‘Article 32 Workers shall not be deemed to be in violation of their labor contracts if they refuse to perform dangerous operations directed in violation of rules and regulations or peremptorily ordered by management personnel at the employer unit. Workers have the right to criticize, report to the authorities, or file complaints against their employer units over working conditions that endanger their lives or health.

Worker and union involvement improved

Major opposition came from employer lobby groups against the earlier draft to require the employer to gain the consent of the employees’ representative works congress and the union to the required changed work rules.

This is watered down to a form of ‘negotiations’. But, still, a form of workplace democracy.

‘Article 4 Employer units shall establish and improve labor rules and regulations in accordance with the law to ensure that workers enjoy labor rights and discharge their labor obligations. Employer units seeking to formulate, revise, or decide on rules and regulations or significant matters that have a direct bearing on the immediate interests of their workers, such as those concerning remuneration, work hours, rest, leave, work safety and hygiene, insurance, benefits, employee training, labor discipline, and work quota management, shall determine the matters through negotiations conducted on an equal footing with trade unions or employee representatives, after employee representatives' conferences or all the employees have held discussions and put forward proposals and comments.’[12]

Liu Cheng still sees this as an important procedure, as does the ACFTU.

Liu Cheng: ‘This is still a restriction on the employers’ behaviour. Workers and their trade union can indicate if the work rule is inappropriate and the employer is then to make ameliorating amendments to the work rule after consultation. There is a greater role for the local trade union, and if ignored, a higher-level trade union authority is involved. Employers can still be punished if there is no consultation on new company work rules, and may be later found to be invalid and not varied. This procedure is still very important for the workers. The employer may not enforce the work rules if challenged in any arbitral proceeding. There is a greater democratic process for work rules.’

How tough will the Labour Bureau be against employers not complying? How will China’s overly legalistic judicial system respond?

Work conditions on hours, OHS, leave etc are in individual or collective contracts. Employers work rules cannot override them, as contracts are changed only by agreement.

Liu Cheng: 'The problem still is at the moment that most contracts are minimum state wages and standards with little negotiation…China still has a long way to go in many areas, such as more collective bargaining, including in state enterprises…but in some provinces, even in the private sector collective bargaining is changing. I think it needs time.’

Union to Assist and Collective bargaining

‘Trade unions shall safeguard the lawful rights and interests of workers in accordance with the law and oversee the execution of labor contracts and collective contracts by employer units. If an employer unit violates labor laws or regulations or a labor contract or collective contract, a trade union has the right to raise its opinions or demand corrective action. If a worker applies for arbitration or institutes legal proceedings, the trade union shall provide support and assistance in accordance with the law. Article 78’

The enhanced union role, for the ACFTU is important. They are pressed to improve representation over grievances and litigation rights. They are establishing new legal centres.

Liu Cheng: ‘The ACFTU is the only trade union in China, from the period of the planned economy. It’s very strong on the top, while very weak at the grass-root level. In recent years, it has begun to reform. For example, the pilot of direct election of trade union leaders at the grass-root level has been taken for some years, and unionisation such as at Wal-Mart by way of mobilization has also begun.’

The ACFTU wants new legal rights for the election of union delegates at the workplace level. This is because when workers join the union, the employer wants to control the election of the union delegates!

Collective contracts with collective bargaining higher than the minimum wages and conditions are encouraged, as is pattern[13] or industry bargaining.

‘Article 53 Industry-specific or area-specific collective contracts may be concluded between representatives of trade unions on the one hand and of enterprises on the other hand in such industries as construction, mining, and catering services in areas below the county level.’

The ACFTU is pushing for greater rights for union collective bargaining later in 2008.

I asked that with the requirement of greater consultation with the elected Staff and Workers Representative Congresses (SWRC), would there be greater use of SWRCs to respond to poor management, as in the past in the public sector. Liu Cheng thought this might be only a formalism in the private sector. However, there is scope for a form of Works Council.

Part Two: Compliance or Avoidance?

The state apparatus for compliance is strengthened.

Employers’ legal liability is detailed. These new Chinese ‘Rights at Work’, are to ensure changed employer behaviour and a crack down on the exploitative practices of the capitalists with ‘dark minds’, as Liu Cheng calls them.

The government is educating workers and employers on these laws. In Hangzhou, I read a newspaper for University students explaining their new Rights at Work in 2008.

The Labour Administration departments are given powers to ensure supervision and inspections and are to organise tri-partite compliance rules.

Lawyers for big global companies complain that the new law imposes a heavy burden. ‘It will be more difficult to run a company here,’ says Baker & McKenzie's employment law group, which represents America's biggest corporations in China. Lawyer Mary Margret Utterback, a major corporate law firm, just days before the law’s passage (cited in Global Labor Strategies):

The law is likely to increase the cost of doing business in China. Larger companies will feel the need to have human resources capability in-country. Severance payments, non-compete payments, and the decrease in probationary period length will all increase the employer's labor costs. The undefined role of the labor union may complicate the relationship with management. The ambiguities for justifying a lay-off may also result in increased costs to the employer. Beijing may decide that this is an appropriate time to send the message internationally that the PRC takes labor conditions seriously.’

Other lawyers advised employers there would not be enforcement, as in the past.

Liu Cheng disagreed. ‘In the past, the cost of violating labour laws was very low, but now the cost is higher, so most employers will not prefer to violate the labour laws. …This is a strong national law, but also at the regional and local government level, there has to be enforcement. At the moment, there is publicity on the new laws and I think nearly all employers will see the cost will be much higher and the local authorities have to comply.’

The pressure will be on MNC’s to see their Chinese suppliers comply.

Liu Cheng: ‘I think that the multi-national corporations will be compelled to enhance their purchase price, otherwise most of their Chinese suppliers could not afford to comply and became sweat-shop producers, but this will now change.’

European HR managers say they can comply and one line of legal advice for overseas corporations is that their labour cost increases will stay within a controllable range.

Liu Cheng: ‘…in the long run, their good will towards the workers, will mean they can maintain their profit making process, otherwise they should pay the cost of turmoil or instability.‘

Corporations look at avoidance strategies. From Global Labour Strategies:

‘…it appears that some companies operating in China are already using an avoidance tactic for existing dispute resolutions cases. On June 8, 2007, the American Chamber of Commerce in Shanghai sponsored a conference on “China’s Trends” where one influential lawyer representing numerous global firms “promoted using an offshore arbitration clause…” He argued that his firm had a high rate of success in getting foreign business-to-business arbitration awards enforced in Chinese courts. Some favorite arbitration off-shoring locations include Hong Kong and Singapore.

For years global corporations have been moving their operations to whatever country offered the weakest labor and environmental regulations. …if the government passes modestly progressive legislation they'll respond by drafting contract clauses that “ship” the dispute to business-friendly shores. This has been common practice in the US for decades.’

Compliance contest

That this compliance contest is underway is shown by the following reports.

‘ACFTU: Huawei agrees to suspend controversial employment scheme after union talks www.chinaview.cn 2007-11-10 21.

BEIJING, Nov. 10 (Xinhua) -- China's Huawei Technologies Co. Ltd has agreed to suspend its controversial "voluntary resignation" scheme after talks with trade unions, the All China Federation of Trade Unions (ACFTU) said Saturday.

The ACFTU said it called on China's biggest maker of telecommunications network equipment to protect workers' interests after its plan sparked fears that the company was trying to sidestep a new labor law.

The ACFTU and union organizations called on Huawei to solicit workers' opinions and respect their rights while making regulations related to their benefits.

A company source confirmed on condition of anonymity they had reached a consensus with the trade unions.

The company agreed to suspend the plan but the exact date to implement the suspension will be decided after workers' opinions were solicited at the impending workers' conference since the plan was launched with the consent of workers.

Huawei initiated a plan, calling for its staff who have worked for eight consecutive years to hand in "voluntary resignations", according to the Nanfang Daily, a local newspaper in southern China's Guangdong Province, where Huawei is headquartered.

The staff would have to compete for their posts, and sign new labor contracts with the firm once they were re-employed, while those who lost out would receive compensation.

Officials with the Shenzhen Federation of Trade Unions met with a vice president of Huawei and the two sides reached a consensus on three issues, said an official with the ACFTU on condition of his own anonymity and that of the vice president. They agreed that:

-- The company needed to create a welfare system to guarantee the workers' benefits and rights and in return, the trade unions supported the company's reform and innovation to unite the workers for the company's future development.

The company needed to abide by the law, and to solicit workers' opinions and negotiate with trade unions while making regulations related to workers' rights and benefits.

-- The company needed to consult with the workers on an equal basis while making contracts for workers' pay, workings hours, vacations, work safety and insurance.

The Huawei vice president reportedly said the company always valued the rights and benefits of workers and respected their contributions, said the union official.

Critics said Huawei was making a last effort to avoid signing open end-of-labor contracts with its employees through "voluntary resignation" before the new labor contract law came into effect on Jan. 1, 2008.

Under the law, employees who have worked for an employer for ten consecutive years are entitled to sign a labor contract that has no fixed term, on agreement by both parties.

The new law meant these "veteran" workers would become "permanent" employees, except in circumstances of willful resignation or retirement.

The ACFTU also called for better publicity of the new labor contract law and closer supervision of companies to avoid similar cases occurring.’

Here is the Global Labor Strategies report November 2007:

‘The Battle for Labor Rights in China: New Developments’

Huawei—the Chinese owned telecommunication company with ties to many foreign firms—recently instituted a personnel program widely believed to be an effort to avoid a key provision in China new Labor Contract Law. That provision automatically grants open-ended contracts to workers with either 10 years of service or two consecutive fixed term contracts. Open ended contracts allow workers much more job security—since there is no renewal date and workers can only be removed for just cause—and they provide for more severance pay should a layoff occur. Under Huawei’s program 7,000 long-term workers were offered economic incentives to quit and be rehired on 1 to 3 year fixed term agreements. The layoff program was widely reported in the Chinese press and roundly criticized by labor rights advocates inside and outside the government.

Now, under intense pressure from the public and the All China Federation of Trade Unions (ACFTU), China’s sole legal union, Huawei has suspended the program.

There is a widespread sense that many firms are engaging in similar practices as they position themselves for life under the new law.

And it's not just Chinese owned firms. Wal-Mart has also come under scrutiny in the Chinese media for some staff reductions. Wal-Mart said that the reshuffle of its employees is not aimed at the new labor law. …but more than 100 employees had been laid off, including 40 in Shanghai and 60 in Shenzhen. A woman who works in the Shenzhen center, said she has been working there for four years and was laid off last month. She was told she would receive three months salary plus some additional compensation. She said she expected to be off for one to two months before returning to the company.”

Back at Huawei, the Asia Sentinel reports on how pressure was applied to long time workers:

We were called into our supervisor’s office about one month ago”, an unnamed Huawei employee who has been working with the electronics company since 1999. “We were encouraged to voluntarily resign within two weeks. My stock will be kept for six months. If I can get reemployed by the company, then I can get the stock back. Otherwise, I’ll be paid cash.”

It is not clear from press reports what will happen to the employees who have already resigned. But the official news agency Xinhua reports, officials with the Shenzhen Federation of Trade Unions met with a vice president of Huawei and the two sides reached a consensus on three issues (see above.)

In what may be a sign of the times in China, despite efforts to mask the layoff programs as legitimate corporate restructuring schemes, many people weren’t fooled. The official on-line news service China.org reports:

A recent survey, organized by the Investigation Center of China Youth Daily, shows that 42.7 percent of the 2,212 interviewed applaud Huawei's staff reforms, while 57.3 percent do not.

According to the survey, opponents consider this a display of capital power, because "the employees working more than 10 years at Huawei are the backbone of the company, and they are the most important for the survival of the enterprise. Huawei's attitude toward its 'veteran' workers will definitely make the company less attractive to talented professionals."

The survey further found,

….87.4 percent of the respondents believe the new law does not provide excessive protection for employees, while 69.4 percent think the protection is not enough.

Nearly 70 percent feel that employees don't have the power necessary to protect their rights.

In the wake of the Huawei controversy the government and the ACFTU have issued warnings to both Chinese and non-Chinese companies on compliance.

The ACFTU reports that it has “…carried out probes….” to pre-empt evasive actions. The China Daily reports,

Chang Kai, an official with the Legal Affairs Office of the State Council, asked the companies to study the law properly before initiating a move against it…..

"The national and local legislatures, the State Council and government agencies will soon issue judiciary interpretation and guidelines to stop employers from trying to dodge the law," Chang said.

According to the interpretation, a firm will be seen as trying to dodge the law if it prompts mass resignation, 21st Century Business Herald quoted him as having said. And "violators will have to pay a heavy price."

The controversy and highly publicized cases like Huawei may be good news for a number of reasons.

First, while some companies are worried about the law and are conducting covert campaigns to circumvent its impact, the government and the ACFTU seem serious about its implementation. This could be a step in the direction of establishing the rule of law in China.

Second, what happens at big companies like Huawei could have a ripple effect, at least in some industrial sectors, by setting the tone for what happens at smaller firms. One HR official at a smaller IT company, quoted by China.org, says, “I have paid great attention to Huawei’s ‘voluntary resignation scheme’ since the beginning…. I want to know how relative departments will deal with…. problems so we can use [it] as a reference in the future.”

Third, the agreement reached at Huawei looks a lot like conventional collective bargaining. Of course, whether and what kind of bargaining actually takes place will depend in part on the actions of the ACFTU which, to date, has generally worked in close collaboration with management—indeed, is often staffed by managers. The ACFTU could become an agency to help impose the new law in China’s workplaces and economy, or it could continue to be just a vehicle for quieting down worker upheavals. Time will tell.

Finally, the Labor Contract Law may function like the National Labor Relations Act did when it was enacted in the US 70 years ago, defining rights that employers try to ignore, evade, or repress—thereby creating the conditions in which workers demand implementation of the rights that they have been told they possess. We may be witnessing an early skirmish in that battle.’

Other reports give a balanced assessment of adjusting to doing business in China.[14] Important changes for making profit in China.

No Right to Strike

I was cited in the China Biz news that Chinese workers are not to have the right to strike.[15]

‘On the lawful strike to protect workers, the right to strike, the ACFTU are not in favour. They see their task as more consultation, negotiation and prevention of disputes. Wildcat strikes and social workplace disturbances, public protests e.g. against unpaid wages are on the increase and not organised by the union, but where the union has to settle the dispute with a return to work.

…there is now quite some reluctance on guaranteeing the right to strike in the law. Chinese know the routine of striking all too well, White notes:

“There is neither a lawful right to strike or for strikes to be illegal, so there is both tolerance and repression, where strike leaders are arrested not for organising the strike but usually some trumped up criminal offence or disturbing the peace.”

So, the debate is on, but what is most likely going to happen in the short run? In China's campaign-like style of pushing forward change, we are probably going to see public tests in getting collective agreements in place, probably with some foreign enterprises as guinea pigs. It is not going to be a revolution, nor a dramatic change for most companies. It is going to be an interesting learning process, both for the Chinese trade union and the companies involved.’

I asked, as I had read[16] that shortages of labour mean a turning point for the Chinese economy.

Liu Cheng: ’its mainly in some advanced technics markets, but not in the market as a whole where labour is a surplus driving growth. In some areas yes, such as the Pearl River delta area. But even here it is not real labour shortages, it’s owing to the wages are so low workers won’t come to work. It will still be ten or twenty years until there are labour shortages.’

Part Three: A New Dispute Settlement Law: A Mediation and Arbitration System

First, there is Chinese tripartism.

Article 5 The labor administrative departments of people's governments at or above the county level shall, together with trade union and enterprise representatives, establish a sound tripartite mechanism for coordinating labor relationships and jointly study and resolve major issues concerning labor relationships.

Next, new labor process laws will come later in 2008. There is a first draft of a new Labor Settlement Disputes law, ‘Mediation and Arbitration of Labour Dispute’ submitted to the National People’s Congress on August 26, 2007 (I have a copy).

The focus is on a reformed dispute mediation and arbitration system. Chinese workers lack the right to strike, so arbitration is one of the few institutional ways for workers to address workplace grievances.

The mediation and arbitration law is to address a number of government concerns. According to the China Daily, PRC figures reveal that:

‘Labor dispute cases in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.’

‘New law will give workers free arbitration in labor disputes (China Daily October 25, 2007)[17]
Arbitration services for employees in labor disputes will be provided free of charge if a new law is given the go-ahead. Draft of the law on mediation and arbitration of labor disputes…proposes public funds cover the cost of arbitration committees. It also says employers must present relevant evidence to the committees as required or face punishment.

…the granting of final decision-making powers to arbitration committees in three kinds of cases. These are: disputes over labor payments, workplace injuries, compensation and pensions; disputes over holidays and social security; and disputes over collective contracts.

The current regulation, adopted by the State Council in 1993, comprises a dispute-settlement process of mediation, arbitration and a trial. The new procedure aims to greatly shorten the time taken to settle labor disputes and cut costs," Yang Xingfu, a standing committee member of the congress, said.’

Liu Cheng is critical of the details of this first drafting.

‘In my opinion, the principal problems with the first draft are as follows: First, the mediation procedure is in disorder and has no binding force; second, the relationship between arbitration and litigation is the same as that of civil procedure which is employer-friendly; third, there is no proper litigation procedure.’

Global Labor Strategies explains.[18]

‘Under the current arbitration system, workers are granted access to the court system only if arbitration fails. And many companies have gamed the system by delaying proceedings. According to a recent article in the Beijing Review:

Against a backdrop of intensifying tension between labor and management, people have begun to question the 20-year-old arbitration solution. The major complaint is that it takes a long period to reach a verdict…The confirmation of employment relations and the appraisal of work injuries usually have to be conducted several times between arbitration and trial, which explains why in some extreme cases the whole process has taken 19 years. The biggest victims of these slow procedures are usually the employees, who often badly need compensation from their employer for medical treatment or simply to buy food and other necessities.

Many legal experts and senior lawyers have expressed worry that arbitration more often than not will give a verdict favoring the interests of management and sometimes this is a result of bribery. In other cases, the arbitration committee, which is heavily influenced by the government, will refuse requests for arbitration from employees under the government call for creating a favorable environment to attract investment. Such a response has also eliminated any judicial means for workers to safeguard their interests.

At least a few of the provisions are pro-worker. These include:
• Ensuring that workers can petition courts for cancellation of unfair arbitration judgments or parties’ failure to comply;
• Extending the deadline for initiating arbitration from 60 days to six months from the day the parties know or should have known of the harm;
• Mandating that if an arbitration court fails to deliver verdict within 45 days workers may file a lawsuit in People’s court;
• Granting workers the right to petition the court to take enforcement measures if employers refuse to comply with mediation agreements on wages, benefits or work injuries (although this right appears to be severely limited by the fact that if the employer answers the charge in writing, the enforcement order abates).

Chinese labor scholars are far from pleased with the initial draft and are pushing for major revisions.

We know for sure there is at least one major flaw in the law...and it’s a big one. The current draft is silent on the majority of Chinese labor arbitration disputes. According to Professor Chang Kai, a distinguished labor law scholar based at Renmin University and drafter of the Labor Contract Law: "The current law is drafted for solving the labor disputes of individual workers rather than those involving a group of workers. But in reality, a lot of labor disputes concern a group of workers."

Recent studies show that group labor disputes have been on the rise and now represent roughly 60% of all workers involved in disputes. Professor Chang argues that the new law needs to be grounded in China's existing realities by elevating the importance of group labor disputes: "If the law remains focused on solving individual labor disputes, in 10 years we will have many problems that cannot be solved under the current legal system."

I understand that the Labor Arbitration bureaucrats are resistant to change and want to continue their (inadequate) role. We shall see what model prevails.

Sexual harassment regulations

In regulations, Guangdong province explicitly require employers to establish investigation and complaint procedures to protect women against sexual harassment. The regulations require employers to create secure safe work environments. This is part of the Law of the Protection of the Rights and Interests of Women. I read a newspaper report where the Professor of Law, Beijing University, was promoting these requirements; another important workplace debate.

Party leadership support Labor laws

With the recent 17th National Communist Party Congress, Hu Jintao, Party Secretary and President of China, consolidated his political leadership. He stressed how important these new labour laws are for his ‘harmonisation’ in industrial relations in China’s unique ‘socialist market economy’.

This CCP leadership generation promise more focus on human as well as economic development; economic development balanced with environmental action; regional disparities between western and central regions to develop as in the coastal eastern sectors; crackdown on corruption; tackling gross inequality of wealth; social security measures dealing with inequality; and these new labor laws. These are fascinating times.

Who is to prevail, the Chinese political leadership or the corporations? Whether Hu Jintao’s ‘scientific development with Chinese characteristics’ prevails will be known soon.

After WorkChoices?

As China’s competitive production puts downward pressure on wages and working conditions, these IR outcomes are of great relevance for Australian working families.

Australian Companies have to comply with these new laws. PM Rudd should insist.

Liu Cheng said it is important with corporate globalisation that overseas unions visit China and discuss these IR issues and be a balance to the corporate world’s influence.

He said there would be soon the first US AFL-CIO delegation visiting China. Other US unions have visited regularly, including Change to Win delegations.[19] Australian unions are increasingly being asked to visit and engage on these IR issues.

These labor laws are also important in the negotiations over an Australia-China Free Trade Agreement, now to be negotiated by a Rudd government.

One reason that Howard’s WorkChoices went down badly with workers and with voters is that Howard lied when promising protection or fairness for an increasing numbers of precarious Australian workers, casuals, out-sourced, in labour hire, and those in enterprises less than 100 who can be unfairly dismissed, restructured and made redundant.

Arguably, China’s modest labor laws afford some workplace social justice to workers and are better than in WorkChoices.

It is going to be interesting to see the modest rights for Australia’s precarious workers to get a ‘fair go’ and collective bargaining reforms from PM Kevin Rudd and Deputy PM Julia Gillard.

Australia and China’s industrial relations reforms have different social, workplace and political contexts. Nevertheless, our IR debates and contests over strategies are reasons to participate and compare the ongoing campaigns over rights at work.

November 23 2007

Chris White is a Labour Law and Industrial Relations writer living in Canberra. References whitecd@velocitynet.com.au

[1] I use the English translation of the Labor Contracts from the Beijing Xinhua Domestic Service -- China's official news service, New China News Agency. In February 2007, I attended a Beijing Industrial Relations conference and interviewed those involved in the new Labour Laws. My Evatt Foundation report is ‘China’s New Labour Law The challenge of regulating employment contracts. China moves beyond WorkChoices,’ http://evatt.labor.net.au/publications/papers/193.html. My interview with the All China Federation of Trade Unions ACFTU ‘Organising China’s Wal-Mart’ Evatt Foundation http://evatt.labor.net.au/publications/papers/194.html
See an analysis of these new employment contract provisions in the November 2007 UNSW Law Journal. The November 2007 Journal of Industrial Relations volume 49, number 5, has the issue on China. See, e.g. on the background to China’s labour law, Sean Cooney “China’s Labour law. Compliance and Flaws in Implementing Institutions.’ Page 673. For earlier China labour law, Ying Zhu, Economic Reform and Labour Market Regulation in China, in Law and labour Market Regulation in East Asia 177 (Sean Cooney et al. eds. 2002). Sean Cooney, ‘Making Chinese Labour Law Work: The Prospects for Regulatory Innovation in the People’s Republic of China’ (2007) 30 Ford ham international law Journal 1050, 1081-1086. Also, Rolf Geffken (2006) Labour and trade unions in China (European Trade Union Institute for Research, Education and Health and Safety). Kan Wang (2007) A Changing Arena of Industrial Relations in China What is happening after 1978 Renmin (People’s) University of China, Beijing.
[2] See Global Labor Strategies on the contest between corporations and NGOs and unions ‘Behind the Great Wall of China. U.S. Corporations Opposing New Rights for Chinese Workers. Opposition may harm workers in the U.S. and other countries.’ www.laborstrategies.com For their 20/2/2007 reply to the corporate lobby, see JapanFocus.org Earl Brown ‘Chinese Labor Law Reform: Guaranteeing Worker Rights in the Age of Globalism’ JapanFocus 24/11/2006; ‘Multinationals Accused of Hypocrisy over China Labour Law Reform’ International Textile, Garment and Leather Workers’ Federation (ITGLWF) 26/10/2006.
Global Labor Strategies: http://laborstrategies.blogs.com/global_labor_strategies/2007/07/chinas-new-cont.html Update October and November2007.
[3] Reports on Liu Cheng’s US visits http://www.commondreams.org/archive/2007/04/03/280/ His papers are available from the author.
[4] ‘Shanxi Scandal Gives Urgency to Draft Labor Contract Law.
Chinese lawmakers deplored the forced labor scandal uncovered in north Shanxi Province and recommended that the top legislature urgently ratify the labor contract law and thus better ensure the legal rights of employees.
… the investigation found that 2,036 of the 3,347 brick kilns had been devoid of any legal licenses and collectively employed 53,036 illegal workers. (The story was exposed first by Chinese bloggers).
This scandal had emphasized the needs for stronger protection of employees' legal rights. Items of the draft labor contract law could be applied to illegal labor cases such as the one in Shanxi.
The forced labor scandal… sparked public outrage and grave concern among the upper echelons. The workers were treated as slaves, forced to work long hours without payment in brickyards, mines and other small works. Shanxi provincial governor Yu Youjun has formally apologized over the forced labor scandal, promising to use his full power to root out any more cases of such illegal practices. (Xinhua News Agency June 25, 2007)’ http://www.china.org.cn/english/GS-e/218983.htm
[5] Worker Beaten to Death over Pay Strike. One unpaid migrant worker was beaten to death at a building site in Guangdong Province and hundreds of his workmates who were striking to get delayed salaries were injured by thugs the building owner hired. The attackers, armed with shovels, steel pipes, axes, and knives, injured many of the strikers and killed Lei Mingzhong, a laborer from Kaixian County. Nearly 300 workers went on strike at the site after working for four months without payment, because the owner, a subsidiary of Shenzhen based Fuyuan Energy Group, had delayed paying the contractor millions of yuan. Having failed to coerce the workers to end the strike, Fuyuan then hired hundreds of thugs to fight them and force them back to work. Ye was reported to have led the thugs when they rushed the workers and beat them. The workers, most of who were reported to have been empty-handed, suffered injuries in the fierce attack, even after police arrived at the scene. Lei was killed while two of his workmates were forced to jump from a high wall into the Dongjiang River. The thugs even threw rocks into the river after them, the newspaper said. Fuyuan Hydropower Co, a subsidiary of Fuyuan Group, plans to build a hydroelectric power station on Dongjiang River. With a total investment of 316 million yuan (US$41 million) from Fuyuan Group, the power plant is expected to produce 90 million kilowatt hours a year.
Miao Shouliang, the boss of Fuyuan Group, was listed as the 19th richest real estate tycoon last year by Rupert Hoogewerf, a former Forbes China employee who established his own luxury business listing company — Hurun Report — in Shanghai. Miao denied delaying the payment of money to the contractor but hung up when reporters asked him to comment on the incident. (Shanghai Daily July 2, 2007). http://www.china.org.cn/english/China/215751.htm Earlier: China Daily 31/12/2006 ‘Migrants frustrated over unpaid wages’ about anger over ‘the death of a young rural worker who was beaten up last week while claiming unpaid wages…’
[6] CLNT translated two articles: the first is a newspaper report on the case with a brief comment from a legal expert; the second is the worker’s own description of the process, published in an NGO magazine. These are available from this author.
[7] Article 9; Chapter two Conclusion of Contracts.
[8] Chapter V. Section 3 Part-Time Labor. Articles 68, 71.
[9] Chapter IV Dissolution and Termination of Labor contracts; article 39; article 42; 44.
[10] Articles Staffing services 57 to 62. Article 66. Article 67. It will be interesting to see how these are enforced.
[11] Chapter Article 24
[12] Article 4; also chapter vii Legal Liability
[13] WorkChoices outlawed industry bargaining industrial action. This breached ILO Conventions. Kevin Rudd’s policy is also in breach. Check my guest blog at ‘What limits the right to strike?’ http://larvatusprodeo.net/2007/05/21/guest-post-by-chris-white-what-limits-the-right-to-strike/

[14] There are many legal firms and consultants advising: e.g. Global Risk Alert from AON Global; and lawyers King and Wood www.kingandwood.com; Baker and McKenzie www.bakernet.com
[15] http://www.cbiz.cn/news/showarticle.asp?id=2458
[16] Ross Garnaut & Ligang Song. ‘The Turning Point in China’s Economic Development’ (2006 Asia Pacific Press).
[17] http://www.china.org.cn/english/government/229625.htm
[18] http://laborstrategies.blogs.com/global_labor_strategies/2007/10/chinas-new-draf.html
[19] The US union movement split at the top, with now the ALF-CIO and the Change to Win, already invited into China by the ACFTU.