International Employment Relations : Collective Bargaining

The current report focuses on international employment relations. It is evident that an employment relation is certain to be amended. The organizations and the countries form the employment relations based on certain policies. Thus, in order to understand the basic principles and purpose of employment relation, the context of China has been selected in the current report. The paper provides the evidences that indicate the transformation that Chinese employment relations are presently undergoing from individual to collectivized relationship. The report also highlights the necessity of changes in Chinas’ labour policy. It is been identified that improvement China’s employment Contract law has achieved the legal framework for the settlement to individual employee relation as well as accelerated the evolution of collective employee relation. Nevertheless, it is observed that the developed framework of individual labour relations is not effective and sufficient by itself to deal with the conflict between employees as well as the capital.

The current report focuses on the above-mentioned factors and includes an intensive analysis of the issues related to labour relations in China. As mentioned by Chang and Brown (2013), the transition towards a market economy as well as the integration of China’s economy into the international market system leads to severe change in the employment relations environment in China. Conversely, it is also identified that the market-oriented reconstruction of the employment in the country takes place during a significant crucial period of transition from personal labour relation to collective labour relation. The report carries forward with focussing on these segments and providing a critical discussion.

The changes in the economy play a crucial role in amending the labour relation in China. Changes in the economy in China are one of the major issues that have broad impact on the labour relations. As mentioned by Cooke (2016), the China’s economy is transforming itself within the last thirty years in as growing speed; nevertheless, the social tissue as well as the employment relation is getting affected to a large extent. The scenario indicates that not only some 250 million of labour are affected, most other labour are also affected. Also, the rest part of the world is anxiously looking forward to China. However, on the contrary, Chang and Cooke (2015,) commented that China has been the winner of globalization for long time. In addition, in past few years, the country China economically was adopting itself with the growing economic power. The impact of this particular action leads to the development of global relations (Hui & Chan, 2015). In this context, Friedman (2012) added that in 2009, China has the record of overtaking Germany as the country with third biggest GDP. It has now been the subject of time when China will leave behind Japan and United State.

Furthermore, it is observed that employment as well as the industrial relations in China undergone radical transformation along with the journey towards a market economy. Within a limited time, the country has become the “world of factory” (Lee, Brown & Wen 2016). However, some significant issues related to the labour relations have been found in the industrial operation and the global operation of the country. Although, China has previously been one of the largest equal societies but in the last twenty years, the country has become most unequal societies than any other Asian countries. According to the data provided by “Asian Development Bank”, the inequality has been increasing rapidly in China than any other developing countries. The inequality has severely growing among regions, industries and occupations. With larger disparity undermining sustainable economic development, China has experienced a massive growth in social conflicts and in labour disputes especially in last two decades (King-Chi Chan & Sio-leng Hui, 2012). As put forward by Liu and Li (2014), the incidence of “collective protest” of different nature increased to 60,000 in 2003 from 10,000 in 1993.

Hence, the major fact is that labour-related protests reached 46.9% of the collective protest in 2004. This scenario clearly indicates that labours issues in China has become one of the largest sources of social tension as well as the conflicts in China. Furthermore, it is also observed that incidents of labour disputes implied to local attribution councils throughout China have demonstrated a significant growth. As mentioned by Li and Freeman (2015), the increasing rate of labour disputes was seen between 20% and 50% each year in the last decade.  However, no trusted source on strike found, but is generally believed that actions of strikes were also in the rise.

Figure: Increase of labour dispute in China

(Source: Lyddon, Cao, Meng & Lu, 2015)

It has been identified that China’s resurgence as an international and political power is depended on its success in becoming the large sector global manufacturing. The country continues to record the negative attention for poor employment standard. As mentioned by McDermott, Jinyue Sun and Obar (2010), since the early 90s, trade unions as well as the consumer group in the Western region have significantly drawn on the corporate social responsibility context arguments to apply pressure on transitional corporation to develop the working conditions in China. As the increasing economic development as well as the urbanization transformed the Chinese labour landscape and ended long-term jobs in the corporate sector, thousands of workers, as the core of the political system were kept unprotected for long. It is observed that irregular payment of wages was spreading around, the workers without support and contracts lack lacked the confirmation of fundamental right in the workplace. Thus, to control and resolve the issues, the Chinese authorities made put a huge effort to protect the workers with the principles of regulation “Labour Law of the people’s Republic of China, 1995. This has enforced a significant change in Chinese labour policy.

According to the opinion provided by Anheier (2014), the last few decades of the last century experienced the most significant change in China’s employment policy. This includes the replacement of permanent employment with the contract-based employment as well as the replacement of government posts allocations with the labour market. Such as changes in the policy indicate the pragmatics shifts in the labour policy. Another three regulations issued in 2007 and made that affective in 2008; the regulation focuses on addressing the shortcomings and drawbacks of the previous laws of labour relation. The Labour Contract Law, 2007 promoted the government’s vision of “Social Harmony” and defended the core rights of workers. Furthermore, it has also been identified that instead of replacing the earlier regulations, the Labour Contract Law tries to fulfil the present gap. The law indicates that any labour relation needs to have a written contract.

In addition to all these, it has been identified that recent financial changes and the crisis in the economy has increased the pressure on Chinese government to protect as well as maintain the employment. Thousands of Chinese workers have lost their jobs. Thus, the government of China have responded to this situation with the technique of maintaining a low labour cost and stimulating local demand as well as the production. However, it has also been observed that these strategies have not always been consistent with the WTO obligations of China. The government of China claims that the laws are helping and supporting the labours in improving the work conditions and environment. According to the report, many large organizations have signed the long-term contract with the labours. According to the report published in Wall street Journal, the new law leads to some 70,000 labour arbitrations in 2009 (Chan & Hui 2014). These particular arbitrations in 2009 focus on the contract violationsas well as the lost wages, Nevertheless, it is observed that no reliable data with statistics have been found on the enforcement of the lawsthus, it is necessary to rely on the NGO and government impression. In this context, Tomba (2014) mentioned that new laws have changed the scenario of China by making it easier for the labours to litigate in their interest as well as putting the obligations to the organizations to pay full attention to the worker demands.

Nevertheless, Gallagher, Gile, Park and Wang (2014) argued that the law is incapable to alter the behaviour of the organizations since it is not enforced and the official union is not seen to be protesting the interest of the labours. In addition, Chan and Hui (2014) have mentioned that legal framework is mainly undermined by a profusion of imprecise and contradictory legal regulations. In this context, Anheier (2014) added that culture of non-compliance impeded effective compliance with the regulations.  Furthermore, with the enhancement of laws, the government has mandated a 40 hours standard workweek. However, Chan and Hui, (2014) argued that standards were violated on a regular basis. Inappropriate and poorly enforced health and safety standards have put the worker’s wellbeing and life at risk. The government of China has till now done little to declare governmental as well as managerial obligations to make people aware of their rights.  For instance, once it is observed that European Business in China, a business enterprise, the industrial authorities and courts across the country enforced the law differently. However, in the evaluation of China’s labour policy, it is identified that the legislation broadened up the gap between the regulations and the reality.

It has been observed that provincial governments of China have barely been rigorous in the implementation of labour regulations, especially when it is in conflict with the domestic economic interests. It is further identified that amended laws have done little to form the culture of compliance among the organizations in China. Conversely, the scenario of economic crisis stands as the barriers in the enforcement of the amended laws. In order to resolve the issues, the government of the country has done some amendments in the policy on employment laws. As mentioned by Hui and Chan (2015), China is considered as the most popular country with the record of boasting tremendous workforce in the world.The government of China focuses on the great importance of employment and considers employment as the first priority and top approach providing the stability of the community. The government of China proceeding with national condition has implemented the global experiences in its practices and developed the legal framework. In addition, with the help of new policies, the government has formed and applied a set of pro-active employment policies.

Furthermore, the government of China is determined to promote the employment system with the help of national economy, aligning with the industrial framework, prolonging with the reform in country’s legal and political system. The government has also applied the technique of harmonizing the economic development between the rural and urban areas and enhancing the social security system. The Chinese government has applied multiple policies to develop employment opportunities and increased the range of employment. Lastly, through effective employment policies, the country has maintained the rate of unemployment under a socially tolerable range. As per the statistic of National Bureau, in 2005 the Gross Domestic Product (GDP) in China met 18.2321 trillion with the increase of 9.3 in 2010 (King-Chi Chan & Sio-leng Hui, 2012). In this context, Lee, Brown and Wen (2016,) added that in the previous decade, the rate of increase of GDP in China has been 8.6% in a stable manner. Moreover, the data reveals that total urban employed population reach 750 million.

Proactive employment policy- The government of China has promoted “Constitution of the People’s Republic of China and Labour Law of the People’s Republic of China” and other significant regulations to protect the right of the labour to employment. With the help of above-mentioned framework, the government of China has formed the employment principles of “labours finding their jobs, employment through market regulation as well as the employment facilitated by the government”. The government of China has also developed and implemented some proactive employment policies such as micro-economic policies, fiscal, tax and financial policies.

Micro-economic policy- The government bodies in China has always considered promoting employment as the strategic activity for socio-economic development. With the help of micro-economic policies, the country could take the control over the unemployment rate and increase job opportunities. The fundamental of the policy is to develop the principles of expanding domestic demand and implementing a stable fiscal as well as monetary policy.

From the year 2008, the labour policies as well as the legislation have let people know a new chapter of their history. The country has developed a series of new labour policies as well as the legislation. This includes the “Labour Contact law”, the “Employment Promotion Law”and the “Law on Mediation and Arbitration of Labour Dispute”.These laws effectively influence the development of Chinese labour relations. For example, in 2007, Chinese arbitration institutions at each level dealt with 50,000 labour dispute cases. Nevertheless, in 2008 the scenario has been changed; in 2008 when the labour contact law was made affective almost 964,000 labour dispute cases were effective dealt with (Cooke, 2016). Thus, it can be added that new labour law is relevant and useful to increase and support the right of the workers.

Why has it changed?

There have been issues that put the labour market in a catastrophic situation. In the 1987, the Provisional regulation on Labour dispute in states enterprise were seen as the major issues as because of this labour dispute arbitration resumed. Likewise, there are many significant issues were found in the last decade such as unhealthy work condition, high unemployment rate, poor wages, irregular payment, collective labour protests  and others. Due to the increasing number of issues, the government of the country has brought changes in the policy.

Changes in the employment policy made by Chinese government have been effective to deal with the increasing issues related to employment. As the economy of China transformed within last thirty years; thereby, due to the uncertainty in the economy labour relation suffered a lot.  At the time of implementing the initiative creating Special Economic Zone 30 years back, the existing regional disparities increased. This initiative led to more catastrophic situation. For example, the quality of life went down and the situation of migrated workers became more problematic in the entire process of modernization as well as industrialization.

In addition, the despite the legal initiatives, the legal framework of China especially for industrial relations remains as problematic since it does not identify the right to strike and need of association. Moreover, the lack of support or the absence of government bodies on labours’ right to put strike on social inequality made the situation worsen (Friedman, 2012). Therefore, it was necessary for the government of China to respond to such situation. The government of China was lagging behind other developing countries to build up a public statistical system to demonstrate the causes as well as the consequences of labours’ collective incidents. Also, the labour issues such as delaying wage payment or getting the lower than the standard wages, employment in private and foreign occupied delayed the pay check. Thus, it was necessary for the country to amend the employment policy to promote the right of labours.

As discussed above, the government policy on labour relations have been effective to resolve the issues caused by several factors such as economic crisis. The labours in China were affected and the rate of unemployment was increasingly rapidly based on the growing population.

Strength of the policy

• The policy strengthens workers’ right and removes barriers of employment
• It decrease the rate of labour disputes across China
• The labours get the economic compensations when they are fired and this change in the policy helps to resolve labour disputes
• Enhancing competitive ability of the big organization

Weakness of the weakness

The standards of some articles is too high to relate with the reality

The major intension of these articles of the laws to avoid the illegal employment practices in some enterprise to resolve the conflict between labours and organizations. This indicates that China’s present industrial status depends low labour cost can be enhanced. However, industrial structure judgement is a long-term process; there are many labour-intensive organizations in China such as food and beverage industry, constructions and other industries of which developments depends on demographic dividend formed by employment costs as well as flexible working hours.

On the completion of the report, it can be mentioned that the amendments in the employment policy done Chinese government have been effective for millions of workers. Thus, recommendation to strengthen the role of labour union is establishing the harmonious labour relationship will be effective, if they are implemented appropriately. By following and maintaining the principles of Labour Contract Law, Labour Law, the labour need to perform their duties and responsibilities positively to help and support the labours. Through the new legal system, the labour unions could obligate the employers to make fair as well as legal labour contract under the special conditions that all labours are clear of their legal rights.

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