Conditions of work in China

Monina WongITUC/GUF Hong Kong Liaison Office

November 2010

Foxconn Suicides and Alienation

• Foxconn Technology Group is a Taiwanese company.• World’s biggest manufacturer of telecommunication and computer p

arts eg. Apple iphones, Dell, HP, Sony, Nokia…

• 13 young migrant workers had jumped from the factory buildings to commit suicide in one of the Shenzhen plants from January to the end of May.

• Foxconn announced a general monthly pay rise to (Euro 222) RMB2000 for production line workers after the 13th jump.

“Confronted with loneliness, death is not so horrible.”

Honda Strike and Power of Labour

• China Honda Auto Manufacturing Co. Ltd is located in Foshan city of Guangdong province.

• Honda subsidiary producing transmissions that supplies to all the Honda subsidiaries in China.

• Regular workers received low wages of Euro150 (RMB1500); 70% of the workers are vocational students received a lower wage of Euro100 (RMB900);

• It takes a regular worker 15 years to promote to the next wage grade.• 2000 workers went on strike from 17 May for 4 day.• They demanded for a general wage increase of Euro90 (RMB800) fo

r all production line workers to catch up with inflation.

• The production halt of 4 Honda assembly factories in China were stopped. It caused Euro 20million to the company.

• The workers put up 90 demands to the Japanese management, including the public demand of reforming the plant union.

• Both Foxconn and Honda are making enormous profit in China.

• The Foxconn plants in Shenzhen alone contributed 22% of the city’s total export value in 2009;

• While the global auto sales dropped by 10% in 2009, China is the only regional market of Honda that reported a 22.5% growth in revenue.

• Yet Foshan Honda parts workers are receiving Euro 1,500 a year, not more than 2% of that of an auto worker in the US, half of the average monthly salary in Europe.

• Labour unrest against run-away capital after the financial crisis

• 251 cases of migrant workers unrests caused by sudden factory closures and back wage claims (Oct 2008); 92% increase from 2007 .

• 4.85 million migrant workers originated from 10 provinces lost jobs and had to return to the place of origin.

• Shenzhen Labour Bureau paid Euro1 million from the insolvency fund in settling the back wage claims caused by the factory closures (Oct, 2008)

Stagnation in the Minimum wages in Guangdong province

Increase rate in minimum wage and GDP

2002* 2004 2006 2008

Shenzhen Municipality 8.8% (Euro59.5)

2.5% (Euro61)

32.8% (Euro81)

23.5% (Euro100)

Guangdong GDP (in 100million)

25.7% (1,350))

39.7% (1,886)

38.7% (2,616)

40.7%(3,680)

Impact of Labour Struggles in China

• State intervention to increase wages • General rise in statutory minimum wage levels - by June

2010, 10 provinces have adjusted the 2009 minimum wage from 14 to 25%.

• Official trade union is pressured by spontaneous strikes, urgent need for increasing unionising rate

• Government initiates collective wage negotiation legislation

Government Promoting Collective Contracts and Collective Negotiation

• Labour Law (1994) • Minimum Wage Ordinance (2004)• Tripartite mechanism - Ministry of Labour, ACFTU and

the China Enterprise Confederation/China Enterprise Directors Confederation (CEC/CEDA) to review minimum wage bi-annually

• Provincial regulations on minimum wage levels

• Collective Contract Ordinance in 2001, and the Interim Provision on Collective Wage Negotiation in 2004.

• By 2007, ACFTU claimed to have signed:

• Enterprise collective contracts: 975,000 contracts, in 1.7 million enterprises, covered 128million workers.

• Regional collective contracts: 100,300 contracts, covered 744,000 enterprises and 31.65 million workers;

• Sectoral collective contracts: 55,000 contracts, covered 212,000 enterprises and 13.2 million workers.

Recent Legislations on Collective Wage Negotiations in Guangdong Province

• Ordinance on Democratic Management in Enterprises of Guangdong Province – 1/3 of whole workforce can put demand for wage negotiation to plant

level union or upper level union; – union must put demand to employer; employer must react and have

negotiation;– Union as the negotiation subject + Upper level union assistance +

invitation of experts in negotiation;– No strike, no lockouts, no provocative actions from both sides;– Not clear about consultation and approval procedure of the draft

contract with wokrers; – Not clear about disputes in negotiation on mediation and right to strike.

• Ordinance on Collective Wage Negotiation in Shenzhen City– 1/5 of whole workforce can demand for wage negotiation.– When no result is reached, workers can demand for application of the

sectoral collective contract in the enterprise.