HR: The Role of Unions in Employee Relations in China Report

This report delves into the significant role of trade unions in shaping employee relations within China. It begins by outlining the basic rights of employees in China, emphasizing the legal framework designed to protect workers from exploitation and discrimination. The report then explores the current state of employee relations, highlighting issues such as poor working conditions and the impact on worker morale and organizational performance. A central focus is the All-China Federation of Trade Unions (ACFTU), the official and dominant trade union in China, examining its structure, functions, and influence on improving employee relations. The report also addresses the history of labor strikes and protests, analyzing their causes and consequences, as well as the influence of civil society and the government in supporting worker movements. It concludes by summarizing the key findings and implications of trade unions in the Chinese context.

HR: THE ROLE OF UNIONS IN EMPLOYEE RELATIONS IN
CHINA
1

Table of Contents
Introduction................................................................................................................................3
Basic rights of employees in China............................................................................................3
Employee relation in China........................................................................................................4
Role of official trade union of China, ACFTU..........................................................................5
Influence of trade union in improvement of employee relation in China..................................6
Story of labor strikes in China...................................................................................................7
Impact of civil society and government in supporting movement of workers...........................7
Conclusion..................................................................................................................................8
Reference list..............................................................................................................................9
2

Introduction
Trade unions play important role in employees relation in many countries and purpose of
developing trade union is to convey information about issues of employees to employers.
Government of China has developed legislation in order to support trade unions in improving
employee relation. It is important to consider basic rights of employees by employers in order
to maintain good employee relation within industries of China. This study focuses on the role
of trade union of China in maintaining good employee relations within country. On another
hand, this study is describing role of government and society of China in supporting
movement by labors.
Basic rights of employees in China
China has a well-structured framework that providers employees a range of benefits and
protect them from any instance of discrimination or exploitation. Different benefits like fixed
working hour, proper contract of employment, insurance are provided to employees. In
addition, they achieve pay for equal work and full protection from any discrimination in
workplace. As opined by Frege and Kelly (2013), all employees have right to form trade
union and management of a firm need to consult with union before making any change.
Employees can bargain their rights and benefits from management of the organization
through the help of trade unions. There are some laws that are related to employee rights,
which include labor law 1995 and labor contract law. It can be seen that different local
governing authority is in charge of enforcing these laws in China. Protecting rights of
employees help to boost their morale, which in turn impacts on productivity of an industry.
Different laws ensure security like minimum wage, overtime pay and 40 hours of working
per week (Borgenproject.org, 2019). However, violations of law often occur in China due to
poor monitoring of government.
However, enforcement of law has slowed down a bit due to weakening of economy in this
country. Human resource is a great factor in China that needs to be protected that can help to
attract investments from other countries. This, in turn, can help to boost up economy of this
country. Contract law of 2008 protects rights of employees in respect to any disputes
regarding employee agreement (Warwick.ac.uk, 2019). In addition, this law also protects an
employee from any exploitation. Different other rights and benefits like overtime,
compensation during any injury are also provided to workers in China. In 1982 right of doing
3

strikes was removed from law in China. However, workers can strike for fulfilling their
demands because there is no legal prohibition.
Employee relation in China
Employee relation refers to efforts of organizations in managing employees by providing
basic facilities to them. As opined by Bottomley et al. (2016), organizations under good
employee relation provide good working environment and basic facilities to employees in
order to fulfill their basic needs. In China, various issues are emerging regarding poor
working system in organizations and this aspect is affecting performance of employees as
well as organizational performances. China has experienced several complaints from the side
of labors regarding unethical business policies of employers. On contrary, Dimitratos et al.
(2016) have mentioned that poor workplace culture is preventing workers to maintain balance
between their professional and personal life. It can be noticed that one-way communication is
present in most of the firms. Employers make decisions and provide instruction to employees.
Lack of direct communication between employees and employers have given birth to trade
unions. Employees are not getting enough opportunities to share their issues with their
employees. On another hand, Mowbray et al. (2015) have argued that employers do not ask
them to take part in decision making. This attitude of employers makes employees understand
that they are not getting sufficient respect as they deserve.
Government of China is concerned about poor employee relation of this country as this
condition is affecting economy of China. Due to this reason, legal system has been developed
in order to control actions of employers and protect basic rights of employers. On another
hand, Smith and Chan (2015) have argued that employers are taking initiatives to
communicate with Union leaders in order to identify and solve potential issues that are being
faced by employees. It has been noticed that employee relation is getting improved day by
day with the help of collaborative approach of government and society. As contradicted by
Barry and Wilkinson (2016), still working condition is poor in China and employees are not
getting all support from their employers. Trade union is playing the role of middleman and is
trying to improve current scenario. For example, labors of manufacturing industries of China
are facing issues regarding minimum wage, long working hours, safety issues and poor
workplace culture. These aspects are negatively influencing employee relations in China.
Employers discuss with leaders of trade unions regarding these potential issues for improving
employee relation. Rate of suicide of employees is remarkable in China and it indicates poor
4

working system and top level of dissatisfaction in employees. Changes in the behavior of
employers are helping this country to mitigate this kind of issues at present.
Role of official trade union of China, ACFTU
In China, any independent labor union is illegal. Government of this country affiliates only
one official trade union. This employee union is all china federation of trade union (ACFTU).
Other unions are under control of this union and ACFTU is directly linked with government.
Different trade unions of China need to be endorsed by ACFTU to achieve legal
establishment. This government-affiliated trade union is considered as largest trade union of
world. As opined by Huang et al. (2016), main role of a trade union is to protect basic rights
of an employee and protect them from any sort of exploitation. Approximately 303 million
members are included under this trade union of China. Funds of this union are collected both
from workers and management of different organizations. However, contribution of workers
is negligible.
ACFTU conducts all their activities by maintaining rules of trade union law of China. It can
be seen that union membership is open for all employees and there is no discrimination. Both
migrant and normal workers can become member of this union. As contradicted by Smith and
Chan (2015), elimination of discrimination between human resources is a major role of
unions. This trade union considers constitution of China as basic criteria for conducting their
work. They work by obligating rules and law of government however they carry out their
work independently. They provide security to workers from any discrimination. Different
sources of discrimination are race, sex, and educational qualification. Moreover, Poole (2017)
argued that trade unions need to follow specific principles for providing desired to support
workers. ACFTU follows a principle that guides industrial unions to accept dual leadership at
local levels. This enables workers of any institution or industry to form local trade unions
according to their needs.
A trade union needs to seek cooperation from other regions in order to maintain flow of fresh
ideas. ACFTU often seek cooperation and exchange ideas with trade unions of Taiwan and
Hong Kong. As stated by Freeman et al. (2017), partnership with other trade unions helps to
obtain fresh ideas of HR management. This trade union follows different principles like
mutual respect, non-interference during cooperation with other trade unions. Hence, different
new policies of employee safety and protection of rights of employees can be framed by
ACFTU. Moreover, Xing et al. (2016) contradicted that it is the duty of a trade union to
5

provide political and legal security of an employee. ACFTU provides security to each
employee by providing a powerful legal guarantee. Any exploitation of employee regarding
job contract, salary and insurance are confronted by these trade unions. In addition, Hui and
Chan (2015) argued that it is another essential duty of a union to organize the workforce in a
proper way. ACFTU main role is to organize large human resource of China in a well-
structured way. At all levels organization of workers is done by firming grassroots trade
unions. Workforce is organized in China through 1.6 million grassroots trade unions. This
helps to increase unity among employees by establishing a strong relationship between them.
Influence of trade union in improvement of employee relation in China
Aim of trade unions is to convey information regarding issues faced by employees to
employers and they influence employers in making decision in favor of employees.
According to Brewster et al. (2016), this approach helps to improve job satisfaction level in
employees and allow reduction of employee turnover rate. It can be considered that trade
unions play important role in positively influencing employee relation in China. ACFTU is
the only recognized trade union in Chin and this union is trying to protect rights of employees
in this country. Improvement of employee relation is the expected outcome of actions taken
by this trade union. On contrary, Danowtiz (2012) have mentioned that numbers of members
in ACFTU is decreasing as private sector of this country is growing rapidly and this sector is
contributing near about 60 percent of total GDP of China. This union is arranging
champagnes in order to protect rights of employees, who work under private sector
companies. This approach of this union is helping them to increase number of memberships.
This union has got the recognition in 2016 and they are still providing their best effort to
represent employees. As contradicted by Edwards and Rees (2010), trade unions of
companies that are foreign-invested, are focussing on provision of support to enterprises in
operating businesses. Many firms are being influenced by trade unions and are rethinking
about their employees. Employees are being educated by training programs and they are
learning processes to obey company policies. Improvement in working condition is helping in
betterment of employee relations in China. Various labor organizations are emerging in
China in order to become voice of Chinese laborers. However, Pringle and Meng (2018) have
argued that aim of all of these labor organizations is same as they want to protect basic rights
of employees. It can be observed that many of the labors do not trust the abilities of trade
6

unions and they do not even know those trade unions may help them to acquire basic
facilities.
Story of labor strikes in China
It is discussed before that in China there is no legal prohibition against labor strikes. Labor
strikes and protests often occur due to poor rules of organization and improper management.
About 600 strikes of workers have happened in 2017. Different improper policies and
demand for higher wage are some major reasons for strikes and protests (Warwick.ac.uk,
2019). Lide Company decided to relocate the business without any consultation with
employees. In addition, no compensation was offered to them. This led to strikes and
agitation of employees. In 2011 around 10000 strikes have happened. In 2014, employees of
the Yue Yuen shoe factory went in strikes. Different operators and drivers of vehicles took
active participation in this strike along with 40000 workers.
Strike in China occurs in an unplanned way and success rate of strike is quite low. As
contradicted by Edwards and Rees (2010), main reason for strike in China is exploitation and
cheating. Often management deprives workers of their benefits that lead to agitation and
protest. Exploitation is another reason for strike and it can be seen that many workers have to
work more than 40 hours in a week. Another reason is bad quality food, improper pension
scheme, and a bad work environment. Moreover, Pringle and Meng (2018) argued that poor
human resource policies are also responsible for strikes and protests in China. Huge work
pressure, improper organizational policies and avoiding employee grievances gives rise to
employee agitation in China. Organizational leaders try to suppress agitation by taking strict
action like arresting leaders that decrease satisfaction level of employees. In March 2016,
some workers are arrested and sentenced for eight months imprisonment. In addition,
different protest organizers are detained in prison for organizing strikes. A large number of
strikes every year in this country shows that human resource policies are not favorable and
satisfaction rate of employees in very low.
Impact of civil society and government in supporting movement of workers
China has experienced labor strikes and civil society, as well as government, has supported
labors to get its demands from employers. It has been noticed that more than dozens of labors
have been gathered in Guangdong in the early 2010s. Frege and Kelly (2013) have mentioned
that, at that time, civil society has helped workers in formulating their demands. In addition,
7

they have influenced workers to use social media to create pressure on employers for their
demands. On another hand, labors got the help from society regarding election of
representative, who have bargained for them. A massive crackdown has been launched in
2015 in order to close influential organizations of labors. However, Gu and Nolan (2017)
have argued that civil society still exists in China as individual activists. Aim of these
activists is to help employees to keep their movement on track. In addition, they ensure
accountability of ACFTU to its members.
Workers do not get sufficient support from court and the LDACs regarding their movements.
Local Government put pressure on both workers and management for solving issues like non-
payment of wages and poor organizational policies. According to Poole (2017), trade union
and local government always claim that they have recovered money for unpaid workers,
instead of explaining their role in controlling unethical business practices in all industries of
China. However, role of government is not satisfactory as they try to put force for solving any
agitation. As contradicted by Sheldon and Sanders (2016), collaboration between government
and organization helps to mitigate any strikes and disputes. Frequent arrest happens during
any protests but workers are detained for few hours. Government also impacts on movements
of workers by framing policies. Minimum wage of a worker is determined by regional
government according to living standard. Hence, variation in minimum wage occurs between
different regions of this country. This creates agitation among staffs and movement occurs.
Conclusion
From the above discussion, it can be concluded that unions play an essential role in
maintaining employee relations in China. Different unions in an industry impact in
maintaining unity and organizing employees together. In addition, unions help to protect
employees from any type of exploitations and discrimination. It can be seen that different
strikes and protests have been organized in China through different trade unions. This has
helped to increase security of human resource. Some basic rights like remuneration, insurance
is provided to employees for meeting their basic needs. Depriving of these benefits can
increase threat to employees. Unions help employees by organizing them and planning to
obtain basic rights of employees. A single union in China has helped to bring all workforces
under one umbrella. Hence, unity of workforce has increased that can help them to make
demands in a proper way. However, poor governance and organizational rules are decreasing
satisfaction rate of human resource in China. It has been understood that Government needs
8

to take initiatives to improve employee relations in industries for ensuring growth of
economy of the country.
9

Reference list
Barry, M. and Wilkinson, A., 2016. Pro‐social or pro‐management? A critique of the
conception of employee voice as a pro‐social behavior within organizational behavior. British
Journal of Industrial Relations, 54(2), pp.261-284.
Borgenproject.org. (2019), Employee rights. Available at: https://borgenproject.org/facts-
about-workers-rights-in-china/ [Accessed on 22nd April 2019]
Bottomley, P., Mostafa, A.M.S., Gould‐Williams, J.S. and León‐Cázares, F., 2016. The
impact of transformational leadership on organizational citizenship behaviors: The contingent
role of public service motivation. British Journal of Management, 27(2), pp.390-405.
Brewster, C., Vernon, G., Sparrow, P. and Houldsworth, E., 2016. International human
resource management. Kogan Page Publishers.\
Danowtiz, M.A. (2012) Diversity in Organizations: Concepts and Practices. Basingstoke:
Palgrave MacMillan.
Dimitratos, P., Buck, T., Fletcher, M. and Li, N., 2016. The motivation of international
entrepreneurship: The case of Chinese transnational entrepreneurs. International business
review, 25(5), pp.1103-1113.
Edwards, T. and Rees, C. (2010) International human resource management. 2nd edn.
Harlow: Prentice Hall.
Freeman, R.B., Doucouliagos, H. and Laroche, P., 2017. The economics of trade unions: A
study of a research field and its findings. UK: Routledge.
Frege, C. and Kelly, J. eds., 2013. Comparative employment relations in the global economy.
Routledge.
Gu, F. and Nolan, J., 2017. Performance appraisal in Western and local banks in China: the
influence of firm ownership on the perceived importance of guanxi. The International
Journal of Human Resource Management, 28(10), pp.1433-1453.
Helfen, M., Schüßler, E. and Sydow, J., 2018. How can employment relations in global value
networks be managed towards social responsibility?. Human Relations, 71(12), pp.1640-
1665.
Huang, L.C., Ahlstrom, D., Lee, A.Y.P., Chen, S.Y. and Hsieh, M.J., 2016. High
performance work systems, employee well-being, and job involvement: An empirical
study. Personnel Review, 45(2), pp.296-314.
10

Hui, E.S.I. and Chan, C.K.C., 2015. Beyond the Union‐Centred Approach: A Critical
Evaluation of Recent Trade Union Elections in China. British Journal of Industrial
Relations, 53(3), pp.601-627.
Mowbray, P.K., Wilkinson, A. and Tse, H.H., 2015. An integrative review of employee
voice: Identifying a common conceptualization and research agenda. International Journal of
Management Reviews, 17(3), pp.382-400.
Poole, M., 2017. Towards a new industrial democracy: Workers' participation in industry.
UK: Routledge.
Pringle, T. and Meng, Q., 2018. Taming labor: Workers’ struggles, workplace unionism, and
collective bargaining on a Chinese waterfront. ILR Review, 71(5), pp.1053-1077.
Sheldon, P. and Sanders, K., 2016. Contextualizing HRM in China: differences within the
country. 2017-2033
Smith, C. and Chan, J., 2015. Working for two bosses: Student interns as constrained labor in
China. human relations, 68(2), pp.305-326.
Warwick.ac.uk (2019), Employee relations, available at
http://homepages.warwick.ac.uk/~syrbe/pubs/CollectiveConsultation.pdf [Accessed on 22nd
April 2019]
Xing, Y., Liu, Y., Tarba, S.Y. and Cooper, C.L., 2016. Intercultural influences on managing
African employees of Chinese firms in Africa: Chinese managers’ HRM
practices. International Business Review, 25(1), pp.28-41.
11

12