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Investigative Report on Labour Rights in Hong Kong

Enterprises in China 2014-2015

Missing social security funds initiating a new wave of

labour movement: Violent suppression intensified

Hong Kong Confederation of Trade Unions

August 2015

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Contents

Part I Executive Summary p.3-8

Part II Preamble

Research aims and scope p.9

Research methodology & limitations p.9

Definition of Hong Kong-invested enterprises p.9-10

Report framework p.10

Research Background p.10-12

Acknowledgement p.12

Part III Research findings:

Factors leading to strikes or large-scale labour

protests in Hong Kong enterprises p.13-19

Unprofessional ways adopted by management of

Hong Kong enterprises in handling labour

disputes

p.20-36

Part IV Hong Kong enterprises’ abuse of political

power in violating labour rights

p.37-42

Part V Conclusion & Recommendations p.43-46

Appendix p.47-50

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Part I: Executive summary

A vast number of Hong Kong enterprises have set up factories or established businesses in

China. Many of them are suppliers for international brands such as Marks & Spencers, Disney,

UNIQLO, etc. Yet, the labour conditions in these enterprises have long been neglected, without

an efficient monitoring mechanism. To tackle this, the HKCTU has continued to run its

“Monitoring Database of Labour Rights in Hong Kong Enterprises”, which was developed in

2013 (see appendix). Through media, social networks, labour organizations in China and

interviews with Chinese workers, it collected information on labour rights violations from

large-scale labour disputes in Hong Kong enterprises, between May 2014 and April 2015. It

aims to expose the common labour rights violations of Hong Kong enterprises in China, to

monitor brands and Hong Kong enterprises, and to push the Hong Kong Government to protect

labour rights in China.

Major Findings:

1. Nearly 70%, a significant growth of collective labour disputes: Between May 2014

and April 2015, the HKCTU collected 25 cases of documented collective labour actions

in Hong Kong enterprises in China. Nearly 90% covered strikes and the rest were large-

scale protests. Compared with the previous years, there is a nearly 70% growth of

documented collective labour actions. This is related to the Hong Kong management’s

refusal to engage in collective bargaining and its unprofessional manner in handling

labour conflicts. Workers have no choice but to strike to force employers to negotiate.

2. Missing social security premiums is the cause of over 55% of the collective labour

disputes: Compared with last year (<15%), disputes caused by missing payment of

social security have increased significantly. Missing or under-payment of severance pay

at relocations, and missing wages are the two other reasons for collective labour actions,

accounting for 44% and 40% respectively.

3. Affecting an estimated 150,000 workers: It is estimated that these 25 cases of

collective labour action, affected about 150,000 workers. Since 28 May 2010, the

Publicity Department of the Communist Party of China has banned Chinese media from

reporting or discussing strikes. Therefore, it is believed that the actual number of strikes

is a lot higher than those documented.

4. Nearly 85% of labour disputes triggered by violations of Labour Contract Law:

As shown in these cases, the Hong Kong enterprises often violate multiple labour laws

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simultaneously. For example, an enterprise might refuse to pay both severance

compensation and social security premiums at the same time. The Chinese authorities

tend to side with the employers. They avoid responsibility by claiming that workers’

missing pension insurance is outside their administrative jurisdiction. This opens the

door for the Hong Kong employers to avoid paying pension insurance for workers

indefinitely; For those areas which are not clearly stipulated in the Labour Contract

Law, the court gives judgement guidelines to judges, that open another door for the

Hong Kong employers to avoid severance compensation.

Focuses of the research report:

1. Large-scale listed companies, such as Chow Tak Fook, Stella International

Holdings Ltd., Pegasus International Holdings Ltd. and Arts Optical International

Holdings Ltd. merely launch corporate social responsibility (CSR) for the purpose

of window-dressing: Over 30% of cases involved major listed companies in Hong

Kong or their suppliers. For example at Arts Optical, its wholly-owned subsidiary

Argent Optical Manufactory Ltd. offers its senior employees with over 10 years of

experience, lower basic wages than new employees. Another one-fifth of Hong Kong

enterprises are recidivists, as strikes have repeatedly taken place due to their labour

rights violations. These companies take CSR as a cover-up, to hide their violations of

labour rights.

2. Workers' right to know is denied: Hong Kong enterprises have been systematically

and intentionally adopting various measures to avoid paying financial compensation

(severance) as required by Labour Contract Law. They intend to cut the costs of

restructuring, relocation or closures, under the Guangdong policy of industry-upgrading.

Many workers only learn about these when machinery is removed or the factory closes

down. Local governments tend to side with the enterprises, which creates more barriers

for workers to claim their severance pay.

3. Management actively invites the police to intervene; workers in nearly 80% of the

strikes have been surrounded, physical assaulted, suppressed or even detained:

For example, the owner of Artigas, a supplier factory of UNIQLO, personally led a

troop of policemen to storm the factory, detaining 31 workers’ representatives and

injuring many. One detainee had a serious head injury and had to be hospitalized. The

workers’ right to strike has been severely violated. However, some strikes lasted from

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one to four months, which indicates that even under violent suppression, workers have

strong will and determination to fight for their rights.

4. Dismissal to retaliate against workers’ representatives, a violation of Trade Union

Law: Many Hong Kong enterprises adopt dismissal as a means to retaliate against

workers’ representatives. An example is Grosby Footwear (Shenzhen) Ltd., a supplier

of Marks & Spencers and Clarks. During a strike, Grosby dismissed a total of 109

workers in seven rounds, including a vocal vice-chairperson of the trade union. The

policy also led to a tragedy. A female worker, who had served in Grosby for 12 years,

committed suicide in the factory upon learning she had been dismissed. Enterprises’

retaliation would make strikes disorganized, as no workers dare to stand up and

represent the collective interest. This would extend the strike and harm both employees

and employers, badly damaging the reputation of the latter.

5. Hong Kong entrepreneurs make use of their political privileges to weaken

legislation on collective consultation, which leads to the growth of strikes: Hong

Kong entrepreneurs have repeatedly worked with their counterparts from Taiwan,

making use of their connections with politicians and the business sector, to influence

the law-making process, to remove pro-worker articles from new collective

consultation legislation. Hong Kong entrepreneurs have long colluded with the Chinese

authorities and strikers can face criminal charges anytime. One example is, Wu Guijun,

a workers’ representative from a Hong Kong-owned factory who was detained for a

year and seven days for joining a strike. The weakened collective consultation

regulations cannot hold the Hong Kong entrepreneurs accountable and when a dispute

takes place, the Hong Kong employer refuses to negotiate collectively. As a result,

labour conflicts are intensifying. When labour relations deteriorate and a strike breaks

out, the enterprise eventually suffers from the damage of its reputation, economic loss

due to production halts and even some other higher costs.

HKCTU’s recommendations:

1. Recommendations to Securities and Futures Commission & Stock Exchange: Public

interest is involved in the labour disputes of listed companies, therefore, they should be

more closely monitored. The HKCTU recommends following the examples of certain

countries, to include labour conditions as one of the criteria in regulating the listed

companies:

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a. Recommendations to Securities and Futures Commission (SFC)

i. When a compliant is received, or there is evidence that a subsidary of a Hong

Kong listed company has violated Chinese labour laws, an immediate notice

should be sent to the licensed corporation of the listed company, demanding it

to take prompt and effective correctional measures, and to deliver a detailed

investigative report, covering the correctional measures, within a certain

timeframe.

ii. The listed company is required to document the violations at prominent

positions in its annual report and issue letters to its investors, to disclose such a

risk to its investors;

iii. SFC should upload its annual report and disclose a list of law-breaking listed

companies to make it publicly accessible.

iv. If the above-mentioned violation continues or severe violations are found, SFC

should conduct site visits or establish an independent investigation committee,

to further investigate or make inquiries. Disciplinary measures, such as public

condemnation, revocation or suspension of license or fines, should be exercised

when appropriate.

2. Recommendations to Stock Exchange:

a. It should require all listed companies to seek verification of any alleged violations of

labour laws in mainland China, the results will be used as one of the conditions of

listing approval.

b. To promote these policies, the Listing Rules should immediately be modified

accordingly.

c. The Stock Exchange should immediately learn from the company whether policies

have been implemented to protect mainland workers, and their responses to the

specific allegations of violations of labour laws. The listing process should be

suspended until a satisfactory reply has been presented.

3. Recommendations to the Hong Kong Government:

a. Taking OECD’s "OECD Guidelines for Multinational Enterprises" as a reference, to

develop its own guidelines on labour rights, so that Hong Kong enterprises can

understand how to protect workers’ rights in Mainland China. Hong Kong

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government should also set up complaint channels, to strengthen the supervision on

the implementation of the above labour rights protection;

b. Reflecting upon the laws on supervising the listed companies and the company

regulations, punishing the listed companies and Hong Kong enterprises that violate

labour laws in mainland China

c. That it take a neutral stance and stop favoring the business sector. In distributing /

collecting news and information related Chinese labour laws it should fully consult

all stakeholders, including the Legislative Council, trade unions and other labor

organizations.

4. Recommendations to major business associations: sending warning letters to Hong

Kong enterprises which have failed in taking up their corporate social responsibility and

have violated the labour regulations in mainland China, demanding them to take prompt

and effective correctional measures; blacklisting Hong Kong enterprises which have

repeatedly broken labour laws in the mainland, and blocking them from being members

of the business association.

HKCTU’s demand

Transnational corporations (TNC):

1. TNC should strictly follow the "OECD Guidelines for Multinational Enterprises" and

their own codes of conduct, to ensure their suppliers are giving legal and reasonable

wages;

2. China’s Trade Union Law and Regulations on Enterprise Collective Consultations and

Collective Contracts both state that an enterprise must conduct collective consultation

with its employees. The “ILO Convention” and “OECD Guidelines for Multinational

Enterprises” clearly support workers’ freedom of association and rights to collective

bargaining. TNC should not allow suppliers to replace collective consultation with

telephone hotlines or face-to-face individual meetings with workers;

3. When a labour rights violation is reported at a supplier factory, TNC should not only

take in the report from the supplier, but it should also conduct an independent

investigation to discover the facts of the case. When a collective consultation takes

place, TNC might send a representative to attend, to promote and ensure that the

supplier responds to workers’ reasonable and lawful demands;

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4. TNC should prohibit its supplier from making use of police brutality, assault, arbitrary

detention or criminal charges against workers in peaceful strikes;

5. TNC should strictly urge suppliers to pay workers their severance payments and

missing social security insurance premiums. If a supplier cannot afford these payments,

the TNC, should be responsible. It should prohibit suppliers from excusing themselves

from paying severance and social security insurance payments, by quoting the local

administrative jurisdiction’s lack of competence, or claiming that it has not broken the

law as the local government has arbitrarily set up guidelines claiming no clear

definition to implement the legislation.

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Part II: Preamble

2.1 Research aims and scope

There has been a lack of attention and effective monitoring of the labour conditions of Hong

Kong-invested enterprises in China. To tackle this, the HKCTU established a “Monitoring

Database of Hong Kong Enterprises" (see appendix) 1 in 2013 and it has been operating for

two years. Through media, social networks, information provided by labour organizations in

China and interviews with workers, the HKCTU collected cases of large-scale labour disputes

in Hong Kong enterprises in China. The aim of this research is to expose the fact that Hong

Kong enterprises are commonly violating labour rights in China; to continuously monitor

brands and Hong Kong enterprises; and to lobby the Hong Kong Government to protect

Chinese workers’ rights.

Last year’s research indicates that, violations of labour rights have been severe in Hong Kong

enterprises, and an overwhelming number of Hong Kong entrepreneurs’ transgressions have

been reported in the media and on the internet. To make this year’s research more specific, we

focus on an in-depth study of large-scale labour disputes in Hong Kong enterprises. We attempt

to address these core questions: How did the management of Hong Kong enterprises exploit

workers? What mistakes did they make in dealing with the large-scale labour disputes? What

caused strikes or large-scale labour disputes to repeatedly take place?

2.2 Research methodology & limitations

This research covers the period between May 2014 and April 2015. In total, 25 cases were

identified involving Hong Kong capital and workers collective actions. Twenty-two of them

involved strikes and three were large-scale protests. The HKCTU has collected 96 micro-blog

and blog entries, 187 reports or commentaries from five labour organizations’ websites and 22

different newspapers on strikes, large-scale labour protests and labour rights in China, four

research reports on labour rights and conducted two interviews with workers.

2.3 Definition of Hong Kong-invested enterprises

Hong Kong-invested enterprises are defined as "enterprises in Hong Kong, regardless their

1 The database was named as “Monitoring Database on Collective Labour Disputes of Hong Kong Enterprises in China” between 2013-

2014, while it is now renamed as “Monitoring Database on Labour Rights in Hong Kong Enterprises in China” between 2014 and 2015”.

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origins of investment, which set up enterprises or subsidiaries in China, or use OEM factories

in China as suppliers of their products. They include overseas companies which are listed in

Hong Kong. Labour rights are human rights and should be protected. By setting up business in

Hong Kong, enterprises provide the fundamental channels for Hong Kong citizens, trade

unions and labour organizations to monitor whether their operations respect basic labour rights.

By being listed in Hong Kong, shareholders of foreign enterprises would include Hong Kong

citizens. Thus they should be monitored by the general public of Hong Kong.

2.4 Report framework

This report starts with an executive summary, then a preamble. The third part discusses the

research findings, describing the causes of large scale labour disputes in Hong Kong enterprises

in China and how the enterprises unprofessionally handled the industrial actions. Part four

illustrates how Hong Kong entrepreneurs abuse their political influence to obstruct the labour

legislation in China. A conclusion and recommendations are to be found in Part five.

2.5 Research Background

2.5.1 Hong Kong entrepreneurs’ dependence on low-labour costs and low-tech production

In the late 1970s, drawn by lower labour and material costs, Hong Kong entrepreneurs moved

their factories from Hong Kong to China. Since then, they have become accustomed to the

privileges such as land and tax incentives exclusively offered to foreign investors and the trust

and networks they built with the central and local governments. Many of them have failed to

upgrade to higher-end industries in a timely fashion. In recent years, higher production costs

in the Pearl River Delta (PRD) and the local government’s policy to upgrade industries

(commonly known as “empty the cage for new birds” strategy) have pushed them to relocate

to the more remote regions of the PRD or inner provinces, such as Chongqing, Kunming, or

Shandong, to continue making profit as middlemen from low production costs.2

2.5.2 Local governments sacrificed workers’ interests for economic gains

Seeing foreign investment as an indicator of economic growth and working along with the

2 The background of Hong Kong-invested enterprises, their roles in the global production chain, ideology, how their development would

harm the Chinese workers, are discussed in our 2013-2014 annual report, which is available at the HKCTU website. “Monitoring Report on

Collective Labour Disputes of Hong Kong Enterprises in China 2013-2014 (I)”, pp.6-9,

http://www.hkctu.org.hk/cms/images/userfile/file/Corporate%20Monitoring%20Report_Final.pdf

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unspoken rule of bribe-taking, local authorities favor employers in the process of promoting

the policy to upgrade industry. They allow the employers to take shortcuts in completing the

official requirements inexpensively, creating various exemptions for them to escape severance

payments and other lawful compensations required by the labour laws.

2.5.3 Hong Kong entrepreneurs’ resistance to labour rights

Compared with statistics collected in the previous year, 2014/15 witnessed a significant growth

(nearly 70%, increasing from 15 cases to 25 cases) in collective action (mainly strikes) in Hong

Kong-invested enterprises. Workers also encountered more grave retaliation and violent

suppression from management. This is linked to Hong Kong entrepreneurs’ stiff resistance to

labour rights, while they take market-oriented labour relations for granted.3 Their refusal to

engage in dialogue leads workers to strike as the last resort to press for negotiation.

The Guangdong Provincial Government intended to pass a collective negotiation bill, hoping

that collective negotiation at the enterprise-level could reduce strikes and enhance social

stability. However, the six major business associations in Hong Kong, together with their

counterparts from Taiwan, used their connections with politicians and the business sector, to

lobby for their own interests. As a result, clauses that could have empowered workers in

collective negotiation were all removed from the Regulations on Enterprise Collective

Consultations and Collective Contracts, which have been enforced since 1 January 2015. For

example, it removes all disciplinary measures on enterprises when they refuse to negotiate with

employees. In other words, the Hong Kong entrepreneurs shut workers out from fair

negotiation.

Noticing that labour arbitration is a long and tiring process with a low success rate, workers

feel that the legal system has failed to offer them solutions and the strike is seen as a way out.

The Hong Kong management seldom has the experience to handle collective labour disputes

and therefore when they encounter frequent labour actions in China, they act rather clumsy and

unprofessional.4 As a result, labour relations have been deteriorating.

3 HUI, E.S.I. & CHAN C.K.C., “The Role of Foreign Chambers of Commerce and Government Agencies in Shaping Labour Legislations in

China: A Case Study on the Shenzhen Collective Consultation Ordinance and the Guangdong Regulations on Democratic Management of

Enterprises”, City University of Hong Kong. 4 “Experts' views: Roles and Influence of Hong Kong Capital in the Global Production Chain”, May Wong (executive director of

Globalisation Monitor) and Dr Dae-oup Chang, (Senior Lecturer in Development Studies of the School of Oriental and African Studies,

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2.5.4 TNCs failed to protect workers’ rights in their supply chain

Many Hong Kong-invested enterprises are indeed suppliers of TNCs. TNCs are in pursuit of

profit maximization and do not comply with ILO Conventions about labour protection. Their

usual practice is to order from suppliers who demand the lowest prices. In other words, they

are the accomplices, working with the Hong Kong business owners to exploit workers.

2.6 Acknowledgement

The HKCTU would like to thank the IUF for its valuable advice during the research process.

We also welcome suggestions and comments from all of you, as they could enhance our further

research. Please kindly email us your comments to hkctu@hkctu.org.hk, fax us +852 27707388,

or write us: 19th Floor, Wing Wong Commercial Building, 557-559 Nathan Road, Kowloon

Hong Kong.

University of London), HKCTU China Labour Quarterly, March 2014.

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Part III: Research findings

3.1 Factors leading to strikes or large-scale labour protests in Hong Kong

enterprises

*Includes two strikes in the same Shenzhen Artigas Clothing & Leatherware Factory, where workers launched a

second strike on 9 June 2015, after the factory refused to discuss with them regarding the severance payment of

relocation. Though the strike did not take place within our research period, it is connected to the first strike.

Therefore, the second strike is included in the statistics.

3.1.1 Illegal or dishonest ways to avoid or cut severance pay

In order to cut costs, when enterprises relocate, restructure or shut down due to Guangdong’s

industry-upgrading policies, employers take illegal or dishonest means, to escape or cut

severance payments. Among 25 cases of labour disputes, over 40% were caused by missing

severance pay. Half of them involved well-known brands’ suppliers or subsidiaries of Hong

Kong listed companies. Another one-fifth of involved Hong Kong enterprises are recidivists,

which have encountered strikes before due to their repeated violations of labour rights.

Labour Contract Law Article 40 (3), “The objective conditions taken as the basis for

conclusion of the contract have greatly changed, so that the original labor contract cannot

be performed and, after consultation between the employing unit and the worker, no

agreement is reached on modification of the contents of the labor contract, an employing

unit may revoke the labor contract, if it notifies in writing the worker of its intention 30

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days in advance or after paying him an extra one month salary.” Article 46 and Article 47

lead to “Financial compensation shall be paid on the basis of the number of years a person

works in a unit, the rate being one month’s salary for the work of one full year.”

Relocation of an enterprise, change of legal representatives, change of an enterprise’s name (a

procedure of restructuring), can all lead to differences from the contracts that workers signed.

Therefore, the enterprise is obligated to discuss with workers and come to a new agreement

when it makes these changes. But since the Labour Contract Law has not defined “greatly

changed” the Hong Kong enterprises have been using this as a gray area, to collude with the

local government in exploiting workers.

Shenzhen Artigas Clothing & Leatherware Factory is such an illustration. Its parent company,

Lever Style Inc. made a statement on 25 June 2015, saying that there was “no legal requirement

for Lever Style to pay compensation for relocation within the same district. This has been

confirmed by the government and the company’s legal advisers.”5 (For details of Artigas Strike,

please see p.26-33)

On 28 July 2012, the Shenzhen Intermediate People’s Court gave guidelines on the ruling of

labour arbitration cases, stating that if the employing unit is not moving outside the territory of

Shenzhen City, it is not required to compensate its employees whose contracts are terminated

due to relocation issues. The court’s guidelines are indeed backing up the enterprises, as the

Labour Contract Law does not clearly define how to implement the court’s ruling and Hong

Kong enterprises make use of them to avoid severance payments.

Grosby Footwear (Shenzhen) Ltd., a supplier to world-famous British brands Marks &

Spencers and Clarks solidly illustrates such a trend. Originally a processing and assembly

factory, it has been restructured to become a wholly Hong Kong-owned enterprise, changing

its legal representative and company name in the process. In order to cut the costs of

restructuring, Grosby refused to discuss welfare and pay in their new contracts with its senior

workers, their years of service and if there would be layoffs. The company’s neglect led to a

strike, joined by all 600 workers. The employer made use of the excuse, “absenteeism”, to

5 Statement from Lever Style Inc., http://www.leverstyle.com/news/statement.htm.

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dismiss 109 senior workers in seven rounds, without paying them their severance payment.

During the strike, workers were violently attacked, their rights to collective bargaining and

strike have been severely violated. For details, please see p20-25.

In some other cases, enterprises deceived workers during the restructuring process, in order to

avoid compensation. Hanson Metal Factory Ltd., a large-scale Hong Kong enterprise which

produces watch straps, cases and jewellery, played such tricks. Workers were not willing to be

relocated to Huizou City and demanded severance payment as required by law. However, the

enterprise had never informed the workers about relocation arrangements. In September 2014,

the management of its factory in Longgang District, Shenzhen City asked some workers to help

out in Huizhou for a month, promising their wages would be calculated as in the Shenzhen

factory and they would be given 380 yuan subsidy per month. However, upon arrival in

Huizhou, their work documents and smart cards were all confiscated and replaced with those

of the Huizhou factory. In other words, the factory tricked and forced workers to work in

Huizhou.

When the workers in Shenzhen learned about this, they launched a strike on 15 November,

involving a workforce of some 2,000. They encountered the worst suppression on 17th and 19th

November. At least 10 workers were detained, facing criminal charges such as “obstructing

governmental operation” or “disturbing public order”. Many workers were injured in the

clashes, one was hospitalized. A worker, Mr Chen said, “At 3pm on 17th November, the factory

management brought in 100 to 200 riot-police, together with policemen and security guards,

they had about 400 people. The riot police

first climbed in through the main door,

using shields to disperse workers. Very

quickly, some dozens of female workers

were cornered by the police. The police

grabbed them, forcibly took them away,

dragging them. Four to five policemen

took one person. I saw it with my own

eyes, they took about three to four women workers and before then, they had already filled two

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cars with detainees.”6（See picture on the right on the previous page）

Workers sought help from media in Guangdong Province and Shenzhen City but no journalist

covered their story. A worker, Mr Zhan said, “On 19th November, 36 of us went to the Public

Security Bureau. The Bureau chief said the policemen were invited by the enterprise; it is not

their job to protect workers. We tried to get the district government, labour bureau, and village

committee to intervene but none of them wanted to get involved. The district government asked

us to talk to the Letters and Complaints Bureau, they just turn us around and won’t fix the

problems.”7

The three cases mentioned above are just the tip of the iceberg. Yet, they clearly show us that

from the beginning, the Hong Kong enterprises intended to shirk responsibility and avoid

compensating workers. They have systematically and calculatedly deceived workers, colluding

with various local authorities, to sacrifice workers' rights and interests in order to cut costs

while restructuring.

3.1.2 A new labour movement in Hong Kong enterprises to claim the missing social

security premiums

Among the collective labour actions, we witnessed a significant growth of cases related to

missing social security premiums. It contributed to 13% of cases in our investigative report last

year and grew to nearly 60% (56%) this year. Social security, sometimes known as social

insurance, is an important component of China’s social security system. It covers five

categories of insurance and one fund, namely pension insurance, medical insurance,

unemployment insurance, work-injury insurance, childbirth insurance and housing provident

fund. Both employers and employees should make contributions to the social security. This

research identifies that missing or underpayment of social security commonly occurs in many

international brands, such as UNIQLO, Wal-mart, Disney, Sony and Panasonic; or listed

6 “2,000 workers launched a five-day strike in a Hong Kong-invested factory in China (19 photos) “(深圳港資廠二千工人連續五天大罷工（19

圖）)，Epoch Times, 20 September 2014,

http://www.epochtimes.com/b5/14/9/20/n4253230.htm%E6%B7%B1%E5%9C%B3%E6%B8%AF%E8%B3%87%E5%BB%A0%E4%BA

%8C%E5%8D%83%E5%B7%A5%E4%BA%BA%E9%80%A3%E7%BA%8C%E4%BA%94%E5%A4%A9%E5%A4%A7%E7%BD%B

7%E5%B7%A5%EF%BC%8819%E5%9C%96%EF%BC%89.html

7 “Some thousands of workers strike, cracked down by several hundreds police, a dozen of workers arrested” ( 深圳數千人罷工 數百警鎮壓 10 餘

人被捕), NTDTV.COM，20 September 2014, http://www.ntdtv.com/xtr/b5/2014/09/21/a1139940.html

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companies or well-known enterprises, such as Chow Tak Fook (HKG 1929), Kingboard

Chemical Holdings Ltd. (HKG 0148), G2000, in both suppliers and subsidiaries in China.

In November 2014, 800 workers launched a strike at SPG Industrial (H.K.) Ltd.’s Huizhou

Plant, to demand their missing wages. SPG is a supplier for Sony and Panasonic, and has been

reported to have repeatedly violated laws, such as failing to pay housing provident fund,

unemployment insurance, childbirth insurance rather often. Ms Liu has worked in SPG for 20

years and she discovered that her unemployment insurance was not paid in two intervals;

between July 1994 and December 1998, and between March 2009 and May 2011. Her medical

insurance was cut between July 1994 and October 2001. However, her wages slips show that

each month, wages have been deducted for social insurance. She later found out from the local

taxation bureau that SPG had missed paying social insurance for some time. It indicates that

even the listed companies intentionally break the law and it was only when the workers exposed

the case, that SPG repaid a certain amount of the missing premiums. Last year, Yue Yuen (551)

was found paying the pension premiums by the standard of legal minimum wages. That led to

a three-week strike, involving some 50,000 workers. Yet until now, Yue Yuen still declines to

repay the missing pension insurance.8

Authorities in China tend to side with the enterprises, even if the latter refuse to repay the

missing social security (especial pension insurance) premiums. Article 20 of Regulation on

Labor Security Supervision states, “Where an act of violating labor security laws, regulations

or rules is neither found by the labor security administration nor reported or complained by

others within 2 years, the labor security administration shall no longer investigate it.” 9

Exceeding its administrative jurisdiction is a common reason for the Chinese authorities to

shirk their responsibility in helping workers to claim missing pension insurance. As a result,

Hong Kong enterprises continue to withhold pension insurance deliberately and indefinitely.

3.1.3 Low wages led to strikes in subsidiaries of three Hong Kong listed companies

Senior workers with 10 years’ experience earning less than new recruits led to a strike in the

8 “First anniversary of Yue Yuen Strike, some current facts which you should know” (裕元大罷工一周年 你不得不知的現狀), New Citizens

Movement, http://xgmyd.com/archives/16505.

9 Regulation on Labor Security Supervision, State Council, 23 May 2005. http://big5.gov.cn/gate/big5/www.gov.cn/zwgk/2005-

05/23/content_254.htm.

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Hong Kong listed company Arts Optical International Holdings Limited (HKG 1120). Its

wholly-owned subsidiary Argent Optical Manufactory Ltd. has over 10,000 workers in its

factory in Longgang District of Shenzhen City. A worker, Mr You, reported, “The basic wage

of a new worker is 2,030 yuan (the legal minimum wage of Shenzhen City in 2015), while a

senior worker, referring to those who have worked seven, eight or even over 10 years, earns

some 1,800 yuan in basic wages. The enterprise will only make changes between the flexible

bonus and basic wages, but all in all, senior workers earn less than new workers."10

The situation finally led to a strike on 16 March 2015. The enterprise stated that it would

evaluate wages and make changes, without offering concrete solutions. A worker, Shen, quoted

the management as saying, "Due to labour shortage, the enterprise had to raise wages to make

it attractive. However, the factory could not afford to raise the senior workers' wages." Some

workers were upset by this comment and resigned, and then they discovered that over the past

years, the enterprises had not paid for workers' pension insurance, medical insurance, work-

injury insurance, childbirth

insurance, unemployment

insurance and housing funds.

This discovery enraged workers

and on 20 November, some

5,000 workers, mainly senior

workers, launched a strike on

the road outside the factory. A

troop of policemen arrived to bar them from going to the City Government to make complaints

(See photo above). Workers have resumed working but they did not reach an agreement

regarding a pay rise. It is unclear if the enterprise will eventually pay all the workers their basic

wages according to the legal minimum wages of Shenzhen City. The factory has announced

that it cannot repay the pension insurance premiums.11

Furthermore, many workers refused to move to Huizhou and hoped the enterprise would pay

10 “Thousands of workers in an optical factory in Shenzhen staged a road blockade to protest against low wages” (深圳眼鏡廠數千工人抗議薪資

低堵路)，Epoch Times, 23 March 2015, http://www.epochtimes.com/b5/15/3/24/n4394819.htm#sthash.JlHMriAD.dpuf

11 “Textile workers launched a blockade and more strike from an optical factory” (紡織工人堵路 眼鏡廠再有罷工)，Radio Free Asia Cantonese

Services, 23 March 2015, http://www.rfa.org/cantonese/news/labor-03232015091553.html

19

them compensation. On 15 August 2014, Arts Optical International Holdings Limited sold its

land and property in Longgang District to Kaisa Group Holdings Ltd. for 1.5797 billion yuan.

According to the contract, the sale price should cover the costs and relevant compensation

required for laying off workers at Arts Optical.12

Arts Optical is a listed company with robust financial backing. It made enormous profit from

selling land and yet, it has violated the laws and not paid workers' social security premiums for

many years. It is unclear whether Arts Optical will compensate workers who refuse to relocate,

that is, for each year of service, a financial compensation of a month's wages, as required by

Labour Contract Law Article 40 (3), Article 46 and Article 47.

Strikes also occurred in two other Hong Kong listed enterprises: Kingboard Chemical Holdings

Ltd. (HKG 0148) and

Pegasus International

Holding Ltd. (HKG

0676), which are both

treating their workers

in ways similar to Arts

Optical.

12 “Arts Optical (1120) sold land and property in Longgang District of Shenzhen for 1.5797 billion yuan” Quamnet, 18 September 2014,

http://www.quamnet.com/newscontent.action?articleId=3828810

Workers from the Elec & Eltek factory under the Kingboard Chemical Holdings

Ltd. post a banner saying ‘we want higher pay’ on the front door of the company

20

3.2 Unprofessional ways adopted by management of Hong Kong enterprises

in handling labour disputes

3.2.1 Rights to collective bargaining and strike not recognized by the management of

Hong Kong enterprises

3.2.1a Management’s retaliation against workers’ representatives

The management of Hong Kong enterprises often refuses to

collectively consult with workers, and then dismisses

workers’ representatives and active workers when strikes

take place. Hong Kong-invested Grosby Footwear

(Shenzhen) Ltd., a supplier of British TNCs, Marks &

Spencers and Clarks and other major brands, vividly

illustrated this practice. Grosby restructured itself in 2014

and after the Lunar New Year that year, problems such as

overdue wages, late payments of social insurance premiums,

and reduction of orders occurred. Workers became worried

about whether the enterprise would shut down and repeatedly demanded to negotiate with the

employer. Grosby refused and only put out notices to explain, which led to a strike on 26 May

2014. On 5 June, the enterprise released a list of dismissals, naming 65 workers. By 16 July, a

total of 109 workers had been sacked. A

female worker who had worked in

Grosby for 12 years, jumped from a

deadly height and killed herself after she

had been dismissed (See photo above).13

A worker, Liu Xinhua reflected, “The

management has never thought of talking

to us. Most of the sacked workers are

union members and active strikers.” 14

13 “Shenzhen female worker jumped from height and killed after being dismissed in a strike” (深圳女工參與停工活動遭開除跳樓身亡), Caixin, 17

July 2014, http://china.caixin.com/2014-07-17/100705378.html. 14 First hearing of the labour dispute arbitration at Grosby Footwear (Shenzhen) Ltd. (深圳哥士比鞋業勞資糾紛案仲裁開庭), China Labour

Bulletin, 28 July 2014,

http://www.clb.org.hk/schi/content/%E6%B7%B1%E5%9C%B3%E5%93%A5%E5%A3%AB%E6%AF%94%E9%9E%8B%E4%B8%9A

%E5%8A%B3%E8%B5%84%E7%BA%A0%E7%BA%B7%E6%A1%88%E4%BB%B2%E8%A3%81%E5%BC%80%E5%BA%AD

July 17th: Husband, daughter and colleagues of Zhou

Jianrong mourning the deceased.

21

Furthermore, workers confirmed that the so-called restructuring was merely a trick to cut costs

by sacrificing workers’ interests. Most of the dismissed workers were senior workers, some

had even served there for over 20 years.15 On 25 July, vice-chairman of the trade union, Luo

Xiangxun, who was dismissed as he represented the workers to fight for their rights, testified

in front of the Arbitration Committee of Labour Disputes, for a case of 73 workers demanding

reinstatement. He stated, “The management has been looking for ways to cut down its

workforce, especially to sack the senior workers without paying severance compensation. The

strike gave it a golden excuse to do so.” 16

The focal points of the Grosby case can be seen on Table 1.

Table 1: Labour rights violations in Grosby

(The green highlighted areas are the key points of the suppression)

Management did not

respect the trade

union and refused to

negotiate.

Late

May

The enterprise refused to communicate, but put out a

“Restructuring Notice”, announcing it had been transformed

from a processing and assembly factory to a wholly Hong

Kong-owned enterprise. Workers’ years of services, wages and

benefits would remain unchanged.

26 May Employer’s refusal to communicate led to a strike, joined by all

600 workers. On the second day of the strike, the trade union

represented the workers to invite the employer for negotiation,

but no reply was given.

Management did not

respect the workers

4 June The trade union had first called the workers to return to work

and wait for negotiation. However, the management kept taking

videos of workers and verbally provoked them, which led to

another strike.

Dismissing workers’

representatives and

active strikers, as

retaliation

12 June 39 workers were sacked, quoting “joining strike, violating

factory rules” as reasons.

15 Meng Quan, Ph.D., lecturer of Department of Labour Relations, Institute of Labour Economics, Capital University of Economics and

Business, “Face-changing: governance and labour solidarity: analysis of the labour dispute at Grosby Footwear (Shenzhen) Ltd. (“變臉”治理

與勞工團結——深圳哥士比鞋廠勞資衝突事件分析), http://www.chineseworkers.com.cn/_d276742044.htm. 16 Ibid

22

Grosby started to

work with the police,

to threaten the

workers with

detention if they

continued to defend

their rights

24 June Luo Xiangxun, the union vice-chairperson was taken to police

station and put under administrative detention for seven days.

In the afternoon, the government pressurized workers one by

one, demanding them to resume working. It requested workers

to immediately select representatives to meet with the

employer.

Management

provoked the workers

and made

unreasonable

demands

25 June Grosby clarified that it would not close down and had still land

in Shenzhen, which could be used for workers’ severance

payments in future. It put out its conditions for workers to

return to work: not to break the factory rules again and to accept

disciplinary measures from the factory. Workers refused and

continued their strike.

Management

attempted

strikebreaking

8 July The dismissed workers were forbidden from entering the

factory, those who never joined the strike were given a 500

Yuan reward. Those who voluntarily resigned were given one

month of wages as subsidy.

Management further

provoked workers,

strike continued

12 July The factory gave an ultimatum, urging the remaining 87

dismissed workers to return to work the next day. Originally,

some workers returned to work. However, they were shocked

and provoked when the enterprise later demanded they write a

“reinstatement application and guarantee”, including clauses

“asking for the enterprise’s forgiveness”, “promising not to

take ‘illegal’ means to express their demands”, “pledging to

obey the management” and “accepting disciplinary measures”.

Grosby continued to

dismiss workers in

seven rounds and led

to a tragedy

16 July Another 16 workers were fired for “joining strike” and

“hindering business operation” (the seventh round, i.e. the last

round). Zhou Jianrong, a 50 years old female worker who had

worked in Grosby for 12 years was one of them. At 5.48am the

next morning, Zhou jumped from the 4-story factory building

and was killed on spot. Between 12 June and 17 July, 109

workers were dismissed in seven rounds.

Grosby worked again 17 July Zhou Jianrong’s family and colleagues asked for an

23

with the police, to

stop Zhou’s family

from defending for

her rights

explanation from Grosby and attempted to bring Zhou’s body

from the hospital to the factory. However, they were dispersed

by riot police and Zhou’s body was taken by the police and sent

to a funeral home. Workers continued to strike.

Grosby has not only violated the rights to collective bargaining and strike, but also the Chinese

Trade Union Law. Its Article 27 states, “In case of work-stoppage or slow-down strike in an

enterprise or institution…With respect to the reasonable demands made by the workers and

staff members, the enterprise or institution shall try to satisfy them….” and its Article 53 states,

“Any organization or individual…rejects consultation on an equal footing without justifiable

reasons… shall be ordered by the people's government at or above the county level to rectify,

and the said government shall handle the case according to law.” These two articles clearly

point out that an enterprise has a responsibility to consult with workers. However, Grosby’s

behavior, namely refusing collective consultation and dismissing workers’ representatives, has

repeatedly violated the Trade Union Law.17

17 Trade Union Law, People’s Republic of China, 25 May 2005, http://www.gov.cn/banshi/2005-05/25/content_896.htm.

24

Marks & Spencers joined the Ethical Trading Initiative in 1999. However, it allowed Grosby

to violate fundamental labour rights. This means, Marks and Spencers has failed to follow ETI

base code on freedom of association and rights to collective bargaining. The four major aspects

The notice from Grosby to strike workers, stating that workers will be fired because of their active participation

in the strike.

25

of these rights include:18

1. Workers, without distinction, have the right to join or form trade unions of their own

choosing and to bargain collectively.

2. The employer adopts an open attitude towards the activities of trade unions and their

organisational activities.

3. Workers representatives are not discriminated against and have access to carry out their

representative functions in the workplace.

4. Where the right to freedom of association and collective bargaining is restricted under law,

the employer facilitates, and does not hinder, the development of parallel means for

independent and free association and bargaining.

The retaliation against workers has cost the enterprise’s reputation, income from orders and

even share price. It also led the strike to become disorganized as no workers’ representative

would speak up. Without a counterpart to negotiate, there is no chance to reach a common

ground and this prolongs the strike. In the end, both employees and employer lose in this battle

and the enterprise’s reputation is badly damaged. This lesson could have been easily learnt

from the three-week strike of Yue Yuen Industrial Holdings, in which workers did not propose

or elect any representatives to negotiate with the employer. Many workers at Yue Yuen said,

“We dare not. Whoever becomes our representative is very likely to be detained.”19 Workers

reported that, “On 14 April, we went to a strike assembly and those in front were detained. In

our building alone, 10 workers were detained for six or seven days and they dare not join any

workers’ meetings anymore. They used to be very active and now they say nothing… it is said

that they were sent to a correctional institution, where they were re-educated through labour.”20

3.2.1b Violence and threat of criminal detention to suppress strikes

Hong Kong-invested enterprises have been using the authority of the police to threaten the

strikers with violence and criminal detention. In nearly 80% of the cases, workers have been

surrounded by police, violently assaulted and even detained, a similar picture to the year before.

18 Introduction of ETI, Ethical Trade Initiative, http://www.ethicaltrade.org/about-eti and its base code, Ethical Trade Initiative, 2014,

http://www.ethicaltrade.org/sites/default/files/resources/ETI%20Base%20Code%2C%20English.pdf

19 Por-Yee Lin, Ph.D candidate in Sociology, University of London and part-time lecturer, “Observations of the Yue Yuen Strike”( 裕元罷工停

看聽), Macau Daily, 19 May 2014, http://www.coolloud.org.tw/node/78760 20 Ibid

26

However, there has been an increasing trend of Hong Kong entrepreneurs employing police

brutality to suppress strikes, even some volunteers of labour organizations were attacked by

police, for their efforts to help other workers.

This report has selected two well-documented

strikes in two factories, namely, Shenzhen

Artigas Clothing & Leatherware Factory and

Sunsang Accessories Co., to compare their

similarities and differences (see Table 2, the

backgrounds of the two factories refer to

footnote 21 & 2221 22 ). Artigas supplies for

world famous Japanese brand UNIQLO and Hong Kong brand G2000. G2000 is headed by

Michael Tien, a member of the National People’s Congress and a legislator in Hong Kong.

Artigas itself belongs to Lever Style Inc., its chairman and CEO, Stanley Szeto received the

2009 Young Industrialist Award of Hong Kong from the Federation of Hong Kong Industries.23

Strikes broke out in these two factories due to missing social security insurance payments and

employers’ refusal to engage in collective consultation. In Sunsang, workers also tried to hold

21 Background of the Artigas strike：Artigas is a subsidiary garment factory of Hong Kong Lever Style Inc. in Shenzhen. It is located in

Longhua New District of Shenzhen City, with a workforce of nearly 1,000 workers. Most workers have been employed for over 10 years or

even 20 years. However, it was only after 2003, their employer started to pay for workers’ social security premiums. Some female workers

who worked there for 20 years but have only been covered for pension premiums three years ago. To be entitled to pension payment, one has

to pay in social security premiums for at least 15 years. It means when some female workers who are retiring at the age of 50 (the official

retirement age of women workers in China), they would find themselves getting no pension. Workers demanded the enterprise to repay social

security fund and housing provident fund of the missing years, yet the enterprise only gave them “verbal promises” without concrete actions,

which led to two strikes from 10 December 2014 on, to protest against the enterprise’s illegal practice of not paying social security premiums

and housing fund over years.

22 Background of the Sunsang strike：Sunsang Accessories Co. is jointly owned by Hong Kong, Macauese and Taiwanese capital, producing

artificial jewellery, handbags, shoes and etc. It was founded in 1994, located in Panyu District of Guangzhou City. 116 workers (mostly

working at the shoe production section, but later the handbag workers joined in) grew dissatisfied, as the factory secretly relocated in August

2014 without consulting them regarding the settlement measures. They also pointed out that the factory had had long record of violations of

labour laws, such as failing to pay social security premiums, refusing to give workers paid annual leave or statutory holidays, and not paying

workers overtime wages. In mid-August 2014 when workers discussed unfair treatments at the factory, a managerial staff ridiculed them by

saying, “Even if you produce more products, the company will only pay you the legal minimum wages of Panyu District. You can stay or quit

as you wish.” Such a nasty attitude outraged the workers and they demanded to negotiate with the management. Yet, the employer ignored

their lawful demands and called the police to threaten the workers, which led to a strike on 16 September. They put out a banner at the open

area of the factory, shouting slogan such as “demand collective bargaining, fight for legal rights!”

23 “Lee Man-tat conferred with the Industrialist of the Year Award”, Press release, Federation of Hong Kong Industries, 16 November 2009,

http://fhki.industryhk.org/print/english/news/news_press/pr_091116_049.php

Artigas female workers stayed at the factory to

guard the machines from being secretly moving

away by the management.

27

the employer accountable for severance payment as the factory relocated. The workers in these

two Hong Kong-invested enterprises faced three similar types of suppression. First, the

management would pretend to negotiate with workers or work with the local government to

hint that it would. When the workers lowered their guard, it signaled the police to violently

crack down on the industrial action. Artigas workers were not conducting a road blockade but

peacefully staying in the factory during the strike. However, the police still stormed into the

factory and some workers were seriously assaulted and hospitalized.

Second, the factories would threaten the workers with detention, to stop them from fighting for

their rights. Workers from both factories have been detained, after the employers had brought

police in. A manager from its Hong Kong parent

company Lever Style Inc., personally led the

police into the Artigas factory to detain workers.

Sunsang Accessories Co. provided a name list and

photos to the police, to help them to detain workers

in the factory. After detention, seven workers’

representatives faced a criminal charge of

“sabotaging production and business operation”.

Third, the management adopted various ways to threaten the workers, to keep them from

fighting for their rights. After workers were being forced to resume work, the management of

Artigas sent security guards or police to supervise workers in the factory. A worker described

this on his micro-blog, “If we slow down, we

will be violently assaulted.” 24 Sunsang

Accessories Co. treated workers with

administrative disciplinary measures. It

would start with a warning letter, a demerit

point, and then a “resume work or dismissal”

notice warning workers, threatening the

24 Micro-blog “Artigas workers defending rights” (「慶盛廠工人維權」微博), 23 December 2014，

http://www.weibo.com/5430587020/BC9clgsrj

A female worker who fainted due to miscarriage

while she safeguarded the factory at Shenzhen.

A number of senior female workers were also

sent to hospital for sunstroke on their way to

petition to the Guangzhou provincial

government.

More than 100 female workers asked for public

donations on the street of Guangzhou, in order to

support their transport, accommodation and meal

fee at the period they went to petition to the

provincial government at Guangzhou.

28

workers untill they give up their fight. 25

What harm would it do to the labour relations, when the management begins to treat workers

with violence? A worker Ping (not her real name) reflected after Artigas voluntarily invited the

police to suppress the labour action, “We took legal means to protest but were considered as

disturbing social order. That makes us feel helpless. Some workers have served the factory for

20 or 30 years, yet the factory repaid them with continuous suppression and lies. The enterprise

also tried to break us apart from our lawyers and make us disorganized. These unscrupulous

measures made us so disappointed. The enterprise, the police, the trade union and authority, all

four of them joined hands to crack down on us. Some workers gave up fighting, we keep

working there, working and waiting in the factory (It means staying at the workplace but not

working). The enterprise would take photos of us every day, monitor our work and make us

like prisoners under surveillance. Even though we don’t like it, we have to tolerate it, it makes

us so disheartened and feel hopeless.” 26

25 Collection of enterprise notice (公司公告集合)，Youth Sparks, 15 November 2014, http://www.youth-

sparks.com/bbs/viewthread.php?tid=4280&page=1#pid22242, & photos of enterprise notices, uploaded to micro-blog, 15 November 2014,

http://photo.weibo.com/2687403913/albums/detail/album_id/3776544156817174#!/mode/1/page/1

26 Ibid

29

Table 2: Similarity and difference of suppression in two strikes in Artigas and

Sunsang

Similarity (1): the employers pretended to negotiate or worked with the local authorities to make

workers believe that their demands are heard, while colluding with the police to prepare for

violent suppression.

Artigas On 15 Dec 2014 (the 6th day of the strike), workers sent

an invitation to the employer for negotiation. The

employer confirmed its arrival two days later, on 17 Dec

and appointed to meet on the next morning (18 Dec). The

employer also put out a notice, stating it supported

“workers to directly elect” their representatives. Yet, at

7am the next morning, instead of coming to negotiate, the

owner of Lever Style Inc. led some 300 armed police to

storm into the factory (See photo below). He demanded the workers to first resume

working before negotiation (See photo on the right). Workers stayed united and refused

his demand. At 9am, the factory

indicated to the police to forcibly

disperse workers, claiming it was a “fire

drill” to the public while the reality was,

Artigas had to remove the workers in

order to deliver a shipment to UNIQLO.

31 workers’ leaders were detained and many were injured. One detained leader’s head

was badly injured and he was hospitalized. Other workers, including pregnant women,

were also attacked by police.

Sunsang On 31 Oct 2014 (Friday), Labour Bureau of Guangzhou City promised that by the

following Monday, a solution of severance settlement would be delivered to workers at

Sunsang. However, when workers arrived the factory on 3 Nov (Monday), they were

surrounded by some 200 policemen. The police hid the factory area with cloths and

detained 14 workers’ representatives, with pictures and a name list provided by the

employer. They also forcibly took or destroyed workers’ mobile phones. Some female

workers had been scared and cried.27

27 Timeline of Sunsang workers’ struggles, Yang Jinyan’s blog, Sina blog, http://blog.sina.com.cn/s/blog_a02e87890102vawz.html.

30

Similarity (2): detention as a threat to stop workers from fighting for their rights

Difference: Sunsang workers’ representatives were criminally detained

Artigas On 18 Dec, workers were dispersed and the management threatened the workers to

resume working and elect representatives who were close to the management. Detained

workers’ leaders were threatened by the police in the police station that they had to give

up the strike and sign a “statement to stop defending rights” before being released.

However, all of them refused to comply and after some 12 hours of detention, they were

released before mid-night.

Sunsang On 3 Nov, the day the 14 workers were detained, fellow workers and labour activists

went to negotiate with the police at Donghuan Police Station, to demand the release of

workers and show them support. Seven

workers were released at mid-night, but

another seven (Qín Qìngméi, Zhāng Wèipíng,

Yáng Lìyàn, Zhū Guógāng, Bì Yòuxiáng,

Yáng Dōngshēng, Yè Shìbīn) were criminally

detained, facing charges of “sabotaging

production and business operation”.28

On 5 Nov, after 50 hours of detention of the

seven workers, Yang Dongsheng’s wife, Yu

Sanmei requested to visit him and give him

some medicine, as he suffered from a serious

liver disease. However, her request was

immediately turned down by the Donghuan police station.

Similarity (3): various means to threaten workers

Difference: Artigas workers were monitored by the management while Sunsang workers were

punished by factory rules

28 Guangzhou citizen Liu Shaoming’s live coverage of Sunsang workers’ right-defending incident (廣州公民劉少明關於新生鞋廠工人維權事件的實

況報導), Changweibo, http://www.changweibo.com/p/2014110608485198399.

The wife of the workers’ representative

Yang Dongsheng sent a letter to the police,

demanding them to be responsible for her

husband’s deterioration caused by

deprivation of medicines and visits.

31

Artigas On 23 Dec, workers were forced to resume working. They uploaded pictures to micro-

blogs, showing that they were monitored by police or security guards at work (See

photos on the left). “If we work

slowly, we will be violently

attacked. The outside world thinks

that our boss has addressed our

demands with reasonable means,

but the truth is we got none of what

we should have got. Despicable

and cruel Hong Kong employer

used violence to force us to go

back to work.

Sunsang The factory put out several notices on 11 or 12 Sept 2014 (exact date was covered and

blurred by a stamp), punishing strikers with warning letter, demerit point and dismissal

warning with administrative disciplinary measures (See photo below).29

29 Same as footnote 25.

32

In the process of being violently suppressed by employers and local governments, workers

have developed the tactic of using their collective power in protecting the workers’

representatives. For example, when their representatives are taken away by the police and

detained in a police station. Workers would unite and gather in front of the police station,

calling the media to expose the truth. Such a tactic can pressure the public security and help to

call for immediate release.

Famous brands tend to present themselves as businesses with a conscience, even if they are

violators of international conventions and fundamental labour rights. For example, UNIQLO

is owned by Fast Retailing Co. Ltd. and claims to have a mission “to use our business to change

the world for the better, to improve the lives of people around the world and change the society

for the better.” In practice, it leaves its supplier Artigas to refuse collective consultation with

its workers, miss the payments of social security, and even violently attack striking workers.

Artigas’ behaviours violate the OECD Guidelines for Multinational Enterprises, whose Article

1 and Article 2 of Part V “Employment and Industrial Relations”, calls for respect and

recognition of organizations of employees’ own choosing, engagement in constructive

negotiations, provision of information and facilities to workers’ representatives as may be

necessary to assist in the development of effective collective agreements.

Artigas has failed to address the problems of missing social security premiums and in early

June 2015, without informing its workers about its relocation plan, it removed machinery from

the factory and attempted to avoid severance payments. Workers safeguarded the machinery

in shifts and from 9 June, they launched a second strike, urging the employer to talk with them.

By 17 July, six workers had been criminally detained by police for joining the strike and are

not yet freed. One of them has been detained since 6 June.

In December 2014, June and July 2015, UNIQLO issued statements, claiming “ensuring human

rights and appropriate working conditions are of the utmost importance. Fast Retailing is

concerned by the reported strike and is looking into it. Fast Retailing has requested that

management of the owner company, Lever Style, undertake thorough discussions with the

33

workers, for a peaceful resolution.”30 However, such a publicity gesture has not brought any

constructive action to help workers with equal consultation or compensation as required by the

Chinese labour laws. UNIQLO even accepted Lever Style Inc.’s proposal to use a “care

hotline”, instead of collective consultation, to talk to the workers’ representatives. Chairperson

of G2000, Michael Tien even cut orders from Artigas, to avoid responsibility before the labour

dispute had been addressed.

3.2.2 Management of Hong Kong enterprises deprives workers’ of freedom of association

Enterprise management commonly controls the trade unions and deprives workers’ of their

freedom of association. One of the examples is Foshan Arts & Crafts Works Co. Ltd. (hereafter:

Foshan Ltd.), which is a supplier factory of the Hong Kong listed company Chow Tak Fook

(HKG 1929). Foshan Ltd. is located in Chancheng District of Fushan City, it also supplies for

other Hong Kong enterprises such as Gold Forever Ltd. and Gold Apex Precious Metal (H.K.)

Ltd., Mansion Bullion Ltd. and others. However, it secretly set up a factory in Dali Town under

another name, and from April 2014 onwards, moved machinery from the old factory to the new

factory, neither informing its workers nor discussing future arrangements with them.31

Fifty-nine workers had served in the factory for 10 years or more. A sudden decline of workload

caused their monthly income to drop from 7,000 or 8,000 yuan to 2,000 yuan. Foshan Ltd.’s

move intended to force them to resign, without paying their severance payment.32 Workers

launched a strike on 16 June 2014, and after months of struggles, the enterprise finally repaid

all of the missing social security premiums, housing fund and paid leave to workers on 10

October.

During the strike, workers sought help from the Foshan City Federation of Trade Unions and

demanded to set up a union. However, they were informed that “you have been members.” and

“Li Yueying is the union chairperson”. Yet, workers had never participated in a union election,

30 Statement “Regarding the Strike at Shenzhen Artigas Clothing & Leatherware Factory in China”, UNIQLO, 17 June 2015,

http://www.fastretailing.com/eng/csr/news/1506171300.html 31 “Wage cutting and forced relocation in Foshan Ltd.: stalemate as no consent has been reached” (佛山同心首飾廠降薪逼遷：勞資談不攏維權陷僵

局), 21 July 2014, http://blog.sina.com.cn/s/blog_ed2baf420102uxzv.html.

32 “Foshan Ltd. relocated its machinery and cut wages, workers demanded the truth” (佛山市工藝總廠又搬設備又降薪，工人停工求真相), Forum of

China’s collective bargaining.(中國集體談判論壇)，7 July 2014, http://www.jttp.cn/a/report/news/labor/2014/0706 /5802.html

34

had no union membership cards, and had never known of the existence of the union

chairperson.33 According to workers, Li Yueying is one of the senior managers from the

employer’s side. Workers returned to the enterprise, demanded to improve the union structure

and the distribution of their membership cards. They also wanted Li Yueying’s assistance to

call on the employer to negotiate concerning guaranteed wages and the abolishment of

unreasonable factory rules. However, their demands were ignored by both the enterprise and

Li. Instead, on 15 October and 10 November, the enterprise punished the workers with factory

rules, as retaliation.34

China’s Trade Union Law and Constitution of the Chinese Trade Unions allow workers to seek

upper union’s approval to dismiss a trade union chairperson and re-elect, when the current trade

union chairperson fails to carry

out her/his duties. Workers

decided to hold a general meeting

and invited the Guangdong

Provincial Federation of Trade

Unions and Foshan City

Federation of Trade Unions as

witnesses, to re-elect its trade

union chairperson and committee

on 27 November. Both upper level

unions declined to reply.35 On the

morning of 25 November, the

enterprise fired three workers’

representatives, Zhù Xīnhuá, Qián

Sēnhuá and Zhèng Hóngshuāng

(see photo on the left) and

dispersed the workers with police

33 “Timeline of the case of the Foshan Ltd.’s wages-cutting and forced relocation (2014.06.23-2014.11.28)”，Youth Sparks, 6 July 2014,

http://www.youth-sparks.com/bbs/viewthread.php?tid=4161

34 Ibid 35 “Foshan workers plan to sue unions for its indifference to factory’s unscrupulous acts and neglect to their demand of union chairperson

re-election” (佛山工人擬控工會不履職 責無視廠方惡行 求直選主席無回應), Mingpao Canada, 11 Decemeber 2014,

http://www.mingpaocanada.com/tor/htm/News/20141211/tcaf1_r.htm

35

force. All workers went to seek help from the City Federation of Trade Unions but were turned

down. On 27 November, 35 out of 59 workers participated the re-election of trade union

representatives. However, the meeting hall was guarded by the management and a dozen

security guards. Workers could not conduct the re-election and decided to reschedule. No one

from the upper unions attended. On the same afternoon, 32 current workers were denied entry

to the factory. This ban lasted over two months, until the workers sued the factory for “illegal

dismissal” at the Labour Arbitration Committee.36

Another case comes from Yue Yuen Shoe Factory in Dongguan. In April 2014, 50,000 workers

staged a strike and they said, “We didn’t know that the union existed. Unions only provide

services like life coaching, but do not genuinely fight for workers’ rights.”37

Taking the employers’ side, the ACFTU has not only neglected its duty to represent workers

and help solve labour disputes, it also exposes workers to more risks when they fight for their

rights. The previous cases illustrate that the upper level unions (which are branches of ACFTU

at the local levels), do not only ignore workers’ lawful demands to safeguard themselves, but

also threaten workers with violence or obstruct them from making further complaints to higher-

level government authorities or unions. Between late 2014 and early 2015, during the strike at

Artigas, workers brought their case to the Shenzhen City Federation of Trade Unions,

Shenzhen’s Letters and Complaints Bureau and the Guangdong Provincial Federation of Trade

Unions. They received numerous violent threats for making these trips. On 14 January 2015,

the Longhua District Union chairman Wang Jianping sent out his staff members and policemen,

to track workers down, attempting to stop them from making the complaint at the provincial

union. Sunsang Factory’s workers experienced the cruel reality that three levels of trade unions

(city, district and community levels) and their employer joined forces to shut them out of

consultation and bargaining. Workers described “trade unions (referring to all upper level

unions, which are branches under the ACFTU) as accomplices in exploiting workers. The scale

36 First hearing of the illegal dismissal of Foshan Ltd. at the Labour Arbitration Committee, Chinese news, China Labour Bulletin, 4

February 2015,

http://www.clb.org.hk/schi/content/%E4%BD%9B%E5%B1%B1%E5%B7%A5%E8%89%BA%E6%80%BB%E5%8E%82%E5%B7%A5

%E4%BA%BA%E8%A2%AB%E9%9D%9E%E6%B3%95%E8%A7%A3%E9%9B%87%E6%A1%88%E4%BB%B2%E8%A3%81%E5

%BC%80%E5%BA%AD

37 Same as footnote 19

36

of the unions’ deception and destruction is indeed the highest.”38

38 Timeline of Sunsang workers’ struggles, Yang Jinyan’s blog, Sina blog, http://blog.sina.com.cn/s/blog_a02e87890102vawz.html.

37

Part IV: Hong Kong enterprises’ abuse of political power in

violating labour rights

4.1 Hong Kong and Taiwanese entrepreneurs joined forces to weaken the

collective consultation regulations

In past years Hong Kong and Taiwanese entrepreneurs colluded with local governments to turn

the collective consultation regulations into a toothless tiger. Rights to collective bargaining are

internationally recognized as fundamental human rights and labour rights and clearly stated in

the ILO Convention. Freedom of association can ensure workers are represented through

democratic mechanisms.39 Trade unions and workers’ organizations should not be controlled

or manipulated by the employers or the government, to guarantee equal collective negotiation

with employers. Such a standard can ensure fair negotiation results and protect workers’ rights.

It also can build up healthy labour relations, to avoid costly labour disputes for both parties.

While freedom of association is prohibited in China, on the one hand, workers do not have

effective and equal mechanisms to conduct fair collective negotiations with their employers;

and on the other, strikes or other rights-defending actions lead to criminal accusations.

For example, Wu Guijun, a workers’ leader of the Hong Kong-invested furniture factory

Diweixin was detained in May 2013, for his involvement in a strike and protest at the city

government. He finally walked free after one year and seven days. His case is seen as an

example that Hong Kong enterprises often collude with local governments and use their

authority to suppress labour rights. Without an environment for equal collective negotiations,

the Hong Kong and Taiwanese entrepreneurs manipulated the law-making process of collective

consultation regulation (i.e. Guangdong Province’s Regulations on Enterprise Collective

Contracts). It is the final version of collective consultation legislation, implemented since 1

January 2015, hereafter: Regulations). The business sector’s “efforts” have removed the last

few clauses which could have regulated employers to take account of workers’ voices. The

finalized regulation cannot bite, even if the employers would refuse to consult with workers;

and if the employers’ power is not checked, regulation on collective consultation is no more

than just a paper regulation.

39 ILO standard on Collective Bargaining, ILO, http://www.ilo.org/global/standards/subjects-covered-by-international-labour-

standards/collective-bargaining/lang--en/index.htm

38

Back in 2008, the Guangdong

Provincial Government attempted

to incorporate labour negotiations

into the system through

legislation. The earlier draft

allowed employees to officially

demand that the employers

negotiate regarding workplace

issues, as a tool to reduce strikes.

However, the Hong Kong business

sector joined force with its

Taiwanese counterparts, to manipulate the law-making process. They removed most of the

clauses which would have enhanced fair negotiation from the final version of the Regulations

on Enterprise Collective Contracts.

The Hong Kong entrepreneurs cornered those drafts, the parts regarding collective consultation

have been shunted several times. The government re-started the consultation in October 2013.

By then, many restrictions had been put on the draft of the Regulations on Enterprise Collective

Consultation and Collective Contracts, which were unfriendly to labour rights; for example,

strikes are not allowed during labour consultation. The six major business associations from

Hong Kong,40 together with Taiwanese chambers of commerce, such as Taiwan Businessmen

Association Dongguan,41 continued to pressurize various authorities in China, Hong Kong and

Taiwan to gain more ground. They met directly with Huang Yebin, vice-chairman of the

Standing Committee of the Provincial National People’s Congress and chairman of Guangdong

Provincial Federation of Trade Unions, demanding to stunt the legislation. They also used all

channels to express their resistance to this legislation, including to the Guangdong Provincial

Government, the Taiwan Affairs Office, the Hong Kong SAR Government, the Liaison Office

40 The six major chambers of commerce include Chinese Manufacturers' Association of Hong Kong, Chinese General Chamber of

Commerce, Federation of Hong Kong Industries, Hong Kong General Chamber of Commerce, Hong Kong Chinese Importers' & Exporters'

Association, and the Real Estate Developers Association of Hong Kong. 41 Zhang Zhuzhong, legal consultate, Analysis of Regulations of Enterprise Collective Contracts Guangdong (《廣東省企業集體合同條例》解析),

22 January 2015，http://www.ts960.com/management/3342.html

On June 6th 2014, CTU and other labour unions protested at the

HKGCC Annual General Meeting, strongly protesting against the

establishment of Regulations on Enterprise Collective

Consultation and Collective Contracts.

39

of the Central People's Government in Hong Kong, Hong Kong delegates of the National

People's Congress, members of the Chinese People's Political Consultative Conference and the

Central Government.42 As a result, many articles which would have been in favour of labour

rights but were attacked by the Hong Kong entrepreneurs, have been either removed or largely

revised (see Table 3). For example, all disciplinary measures on enterprises, when they refuse

to consult with workers, have been removed. Pearl River Delta Council, an affiliate of the

Federation of Hong Kong Industries, even said it was “pleased” that the Regulations were

passed.43

The business associations consider the outcome as a significant victory. However, without the

right to collective bargaining equally, it would eventually lead to more strikes. In other words,

it is the business sector which caused the deterioration of labour relations.

Table 3: Articles of the Regulations which are removed / largely amended due to furious

attacks from the Hong Kong entrepreneurs

Before amendments / removals: Regulations

on enterprise collective consultation and

collective contract of Guangdong

Province(Draft for comments)

After amendments / removals: Regulations on

enterprise collective contract of Guangdong

Province (final legislation on collective

consultation)

The negative impact on workers for the removal of Article 59:

1. It removes all disciplinary measures on enterprises when they refuse to negotiate with

employees. Without any costs, it is ineffective to order enterprises to conduct negotiations with

workers.

2. The only method that workers can use to force employers to negotiate, the right to strike,

under certain conditions, has been abolished.

Article 59:

When an enterprise violates Article 25, fails

to reply or provide a justified reason to refuse

consultation within the prescribed time limit,

thus leads to a collective work stoppage,

Article 59 removed

42 Regulations of Enterprise Collective Contract, Guangdong Province, will be implemented on 1 January 2015, Association Notice, Pearl

River Delta Council, 8 October 2014, http://www.prdcouncil.org/index.php/xhdt/xhxx/xhtg/1018-2015-1-1 43 Ibid

40

slowdown, employees are not considered as

severely violating the business rules and

regulations, and the enterprise shall not

terminate their labour contracts. If employees

terminate the labour contracts, the enterprise

shall pay financial compensation as required

by law.

The negative impact on workers for the revision on Article 26:

The revision raises the benchmark for workers to demand collective bargaining, from approval

of 1/3 to 1/2 of employees.

Article 26:

…based on employees’ opinions and the

actual situation of the enterprise, an enterprise

union could decide to demand collective

consultation with the enterprise. When 1/3 or

more of workers or workers’ congress

propose to conduct collective consultation,

the union shall demand the enterprise to do so.

For an enterprise without a union, or its union

fails to properly operate, employees could

propose to the upper level union. After the

upper level union has collected consent from

1/3 or more of workers or workers’ congress,

it shall demand the enterprise to conduct

collective consultation.

Article 18:

… When a half or more of workers or workers’

congress propose to conduct collective

consultation, the union shall demand the

enterprise to do so. For an enterprise without a

union, employees could propose to the local

federation of trade unions. After the upper level

union has collected consent from 1/2 or more of

workers or workers’ congress, it shall demand

the enterprise to conduct collective

consultation…

The negative impact on workers for the revision on Article 23:

The definition of relevant information for the purpose of consultation has been removed and

replaced by “true situation and materials relevant to collective consultation”. It makes the final

definition very vague. The right of workers to actively demand information has also been

removed.

Article 23: Article 15:

41

Representatives to the consultation serve the

rights to demand relevant information from the

other party for the purpose of consultation.

Relevant information includes, registration

status, rules, financial reports, labour

allotment criteria, payment of wages, taxes

and social security payment reports.

An enterprise shall guarantee the

representatives with the working conditions

and time necessarily required for consultation,

to inform the employees’ representatives of the

true situation and provide materials relevant to

collective consultation…

4.2 Lack of equal collective consultation rights leads to growth of strikes

Hong Kong entrepreneurs’ denial of the workers’ equal rights to collective consultation, can

only lead to significant growth of strikes and more risks for their business operations. If

workers do not have access to their labour rights within the system, they will take more direct

and prompt means, such as wild-cat strikes, to force the employers to talk. One internal survey

conducted by a Chinese non-profit organization has shown that, at times of factory relocations,

closures or restructuring, only 15% of workers settle their problems through legal procedures

while 62% take collective action such as stoppages, slowdowns or strikes.44 These numbers

reflect that the more the Hong Kong entrepreneurs seek to avoid labour rights, the more

intensive the labour conflicts become. When the labour relations break down and a strike breaks

out, the enterprise will eventually suffer damage to its reputation and financial losses as

production halts. The massive strike of Yue Yuen in April 2014 is an example. Yue Yuen

admitted that it had a direct loss of USD 27 million from that strike.45 There is also, the further

higher price of ruining the trust between employees and the employer.

According to China Labour Bulletin’s statistics, the numbers of strikes have been multiplied in

China. The accumulated number of strikes of the first quarter of 2015 (Jan to Mar) has been

2.24 times higher than the total number of strike in 2011. These numbers indicate, the more

the Hong Kong entrepreneurs avoid labour rights and resist equal labour consultation, the more

44 The survey was to study and analyse the labour rights conditions, workers’ actions and updates of their livelihood after the industry

upgrade in Guangdong Province. A questionnaire survey was conducted among the workers who had been affected by factory relocations,

closures and therefore experienced labour conflicts. It covered the areas of Shenzhen, Guangzhou and Dongguan. The involved workers

were identified from the labour organization’s consultation and case handling services, followed by face-to-face interviews or telephone

interviews. 176 valid questionnaires were received.

45 “Another strike at Yue Yuen, 2,000 affected” (裕元東莞廠再罷工 影響 2000 人), 19 March 2015,，

http://money.udn.com/money/story/5641/775442-%E8%A3%95%E5%85%83%E6%9D%B1%E8%8E%9E%E5%BB%A0%E5%86%8D%

E7%BD%B7%E5%B7%A5--%E5%BD%B1%E9%9F%BF2000%E4%BA%BA

42

unrealistic their wish for harmonious labour relations will become. Research scholar Aaron

Halegua of the US-Asia Law Institute of the School of Law at New York University described

the effectiveness of collective consultation legislation in Guangdong Province saying, “In short,

the final regulation maintains the status quo. There are no new tools to pressure employers to

take bargaining seriously. Instead, the Year of the Sheep is likely to see the strikes - along with

the firings, injuries, detentions and arrests - continue to rage on in Guangdong.” 46 In other

words, without equal negotiation, there is no way out.

Collective bargaining rights are an internationally recognized fundamental human right and a

core labour right. ILO’s C98 Right to Organise and Collective Bargaining Convention entitles

workers to collectively bargain with their employers equally. In the earlier years, such a right

did exist in Hong Kong. Thus, the Hong Kong entrepreneurs should implement it and the Hong

Kong Government is obligated to legislate it and monitor the Hong Kong entrepreneurs. No

matter where they are operating, they should recognize workers’ rights to collective bargaining.

46 Aaron Halegua, research scholar of US-Asia Law Institute, School of Law, New York University, “China's new collective bargaining rule

is too weak to ease labour conflicts”, South China Morning Post, 25 February 2015, http://www.scmp.com/comment/insight-

opinion/article/1723213/chinas-new-collective-bargaining-rule-too-weak-ease-labour

43

Part V: Conclusion and Recommendations

Between May 2014 and April 2015, 25 cases of collective labour action in Hong Kong-invested

enterprises have been identified, affecting approximately 150,000 workers. It is believed the

actual figures of labour violations, individually and collectively, have been countless. Among

the 25 identified cases, more than 30% took place in either factories owned by large-scale listed

companies or their suppliers, such as Stella International Holdings Ltd., Pegasus International

Holdings Ltd., Arts Optical and Chow Tak Fook.

These enterprises all claim that they have their own CSR standards and will examine their

suppliers’ codes of conduct through other famous brands. However, through strikes and large-

scale labour actions, we realize that they are offenders of labour rights violations. They do not

only violate labour laws and provide workers with poor working conditions, but also invite

police to violently attack workers and dismiss workers as retaliation. Their denial of collective

bargaining is the major cause of strikes, and in return, they run into more troubles when they

operate. CSR models are voluntary and not legally binding, which are unhelpful in either

eliminating or addressing the violations that grassroots workers face. The current mechanism

must be re-evaluated and legislation should be considered to solve the problem.

Furthermore, internationally-known brands, such as UNIQLO, Wal-mart, Disney and Sony

have turned a blind eye to the labour rights violations at their suppliers’ factories. These TNCs

have signed the OECD Guidelines for Multinational Enterprises in their home countries and

have their own CSR polices. However, they see these as empty promises and fail to comply.

The HKCTU urges the TNCs to honor and implement their policies, in order to protect labour

rights.

HKCTU’s recommendations:

1. Recommendations to Securities and Futures Commission & Stock Exchange: Public

interest is involved in the labour disputes of listed companies, therefore, they should be

more closely monitored. The HKCTU recommends following the examples of certain

countries, to include labour conditions as one of the criteria in regulating the listed

companies:

44

a. Recommendations to Securities and Futures Commission (SFC):

i. When a compliant is received, or there is evidence that a subsidary of a Hong

Kong listed company has violated Chinese labour laws, an immediate notice

should be sent to the licensed corporation of the listed company, demanding

it to take prompt and effective correctional measures, and to deliver a detailed

investigative report, covering the correctional measures, within a certain

timeframe.

ii. The listed company is required to document the violations at prominent

positions in its annual report and issue letters to its investors, to disclose such

a risk to its investors;

iii. SFC should upload its annual report and disclose a list of law-breaking listed

companies to make it publicly accessible;

iv. If the above-mentioned violation continues or severe violations are found,

SFC should conduct site visits or establish an independent investigation

committee, to further investigate or make inquiries. Disciplinary measures,

such as public condemnation, revocation or suspension of license or fines,

should be exercised when appropriate;

b. Recommendations to Stock Exchange:

i. It should require all listed companies to seek verification of any alleged

violations of labour laws in mainland China, the results will be used as one of

the conditions of listing approval;

ii. To promote these policies, the Listing Rules should immediately be modified

accordingly;

iii. The Stock Exchange should immediately learn from the company whether

policies have been implemented to protect mainland workers, and their

responses to the specific allegations of violations of labour laws. The listing

process should be suspended until a satisfactory reply has been presented;

2. Recommendations to the Hong Kong Government:

a. Taking OECD’s "OECD Guidelines for Multinational Enterprises" as a reference, to

develop its own guidelines on labour rights, so that Hong Kong enterprises can

understand how to protect workers’ rights in Mainland China. Hong Kong government

45

should also set up complaint channels, to strengthen the supervision on the

implementation of the above labour rights protection;

b. Reflecting upon the laws on supervising the listed companies and the company

regulations, punishing the listed companies and Hong Kong enterprises that violate

labour laws in mainland China;

c. That it take a neutral stance and stop favoring the business sector. In distributing /

collecting news and information related Chinese labour laws it should fully consult

all stakeholders, including the Legislative Council, trade unions and other labor

organizations;

3. Recommendations to major business associations: sending warning letters to Hong

Kong enterprises which have failed in taking up their corporate social responsibility and

have violated the labour regulations in mainland China, demanding them to take prompt

and effective correctional measures; blacklisting Hong Kong enterprises which have

repeatedly broken labour laws in the mainland, and blocking them from being members

of the business association.

HKCTU’s demand

Transnational corporations (TNC):

1. TNC should strictly follow the "OECD Guidelines for Multinational Enterprises" and

their own codes of conduct, to ensure their suppliers are giving legal and reasonable

wages;

2. China’s Trade Union Law and Regulations on Enterprise Collective Consultations and

Collective Contracts both state that an enterprise must conduct collective consultation

with its employees. The “ILO Convention” and “OECD Guidelines for Multinational

Enterprises” clearly support workers’ freedom of association and rights to collective

bargaining. TNC should not allow suppliers to replace collective consultation with

telephone hotlines or face-to-face individual meetings with workers;

3. When a labour rights violation is reported at a supplier factory, TNC should not only take

in the report from the supplier, but it should also conduct an independent investigation to

discover the facts of the case. When a collective consultation takes place, TNC might send

a representative to attend, to promote and ensure that the supplier responds to workers’

reasonable and lawful demands;

46

4. TNC should prohibit its supplier from making use of police brutality, assault, arbitrary

detention or criminal charges against workers in peaceful strikes;

5. TNC should strictly urge suppliers to pay workers their severance payments and missing

social security insurance premiums. If a supplier cannot afford these payments, the TNC,

should be responsible. It should prohibit suppliers from excusing themselves from paying

severance and social security insurance payments, by quoting the local administrative

jurisdiction’s lack of competence, or claiming that it has not broken the law as the local

government has arbitrarily set up guidelines claiming no clear definition to implement the

legislation.

1

2

3

4