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The government and the All-China Federation of Trade Unions have been preparing for a further push for the implementation of collective bargaining and an increase in what they describe as "democratic management" at all companies. They are clearly still considering how to implement the policy, but recent significant developments indicate what employers may expect.
Following the annual meeting of the National People's Congress, the government has given a number of indications that increasing workers' wages will be one of this year's primary policy goals. A key concern is the large and growing income gap between ordinary workers and the wealthy, which the Communist Party fears may lead to increased social instability.
The authorities in Shenzhen have announced that they will pick 120 companies from the Global Fortune 500 and China Fortune 500 with operations in Shenzhen and will push for collective bargaining in these companies. A draft set of collective bargaining regulations includes a provision on binding labour arbitration, similar to that which US trade unions are seeking in the Employee Free Choice Act.
Local unions reportedly played a key role in the decision by retailer Wal-Mart to abandon its attempt to eliminate assistant manager positions at all of its stores in China. However, employees affected by a new plan not to renew employment contracts may find the company's decision harder to challenge.
The Ministry of Human Resources and Social Security, the All-China Federation of Trade Unions and the China Enterprise Association have urged their local counterparts to implement a plan to expand the use of collective contracts. For enterprises having operational difficulties, such contracts should focus on measures such as arranging for flexible working hours and related wage reductions.
The All-China Federation of Trade Unions reportedly announced that it has successfully unionized more than 83% of the headquarters and more than 85% of the subsidiaries of the Fortune Global 500 companies in China. As the federation continues its drive, companies that have not yet been unionized in China may become targets for media pressure or lawsuits.