Traditionally the employer employee relationship in China has been best described as a one way street – namely power resides in the hand of the employer. However, as China undergoes fundamental restructuring of its economy in the move to become even more dominant in the global market following free market reforms in 1980, this has had the knock on effect of stimulating worker agitation.
It has been noted by a number of commentators that China’s industrial zones are seeing higher levels of labour unrest than has been seen for a considerable period of time. In the last 30 or 40 years multinationals investing in China have been able to use Chinese labour as a source to ensure efficient outsourcing production without being too concerned that there would be any complaints or unrest regarding work conditions or remuneration.
However, in March of this year Walmart stated that it was closing a store in the city of Changde. Consequently, many employees demanded higher severance payment and blockaded the outlet.
Some have agreed to increased severance packages but others have pursued litigation in the courts. Also in March, workers at an IBM factory in Shenzhen went on strike due to a transfer proposal from IBM to Lenovo.
As the level of available labour continues to shrink, workers are now finding opportunities to work in different sites and also be more proactive in what they are seeking in terms of remuneration and benefits. However, this is not going to result in fundamental structural changes as there still remains a great deal of state control. However it is clear, that given the information that workers can now access via the internet in relation to remuneration and working time limits, these issues are going to come to the fore. Companies operating or thinking about operating in China may want to factor this into any equation in terms of attracting and retaining labour.
Other blogs of interest in our BRICs series: