95% of Fortune 500 companies in China to hold collective negotiations

BEIJING - Unions will introduce collective wage negotiations by 2013 in at least 95 percent of enterprises set up by Fortune 500 companies operating in the country, a senior union official said.

Among the approximately 4,800 corporations of Fortune 500 companies in China, 93 percent have already established unions, said Guo Chen, a division chief overseeing grassroots organizations with the All-China Federation of Trade Unions (ACFTU), the top union organization.

"A greater union presence in Fortune 500 companies is a priority and we will introduce collective wage negotiations in all companies that have unions in the next three years," Guo told China Daily.

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China's Trade Union Law stipulates that a corporate unit with 25 employees or more should set up a union. The primary task of a union is to boost collective contract agreements and to mediate labor relations through negotiation between employees and employer.

In 2008 the ACFTU intensified its campaign to boost union presence in Fortune 500 companies. Consequently, unions were set up in firms such as Wyeth Pharmaceutical Co Ltd, Morgan Stanley and Marubeni China Co Ltd.

Wal-Mart established unions in all of its outlets in China in 2006 following demands by employees.

"It sets a good example for other overseas companies investing here," Guo said.

A spate of strikes occurred last year in companies that did not have a union, she said.

A lack of understanding has hampered the enthusiasm of foreign businesses to set up unions, Guo said.

"Unlike Western unions, which always stand against the employer, Chinese unions are obliged to boost the corporation's development, maintain sound labor relations and protect workers' legitimate rights," she said.

Guo's organization and local federations will push grassroots unions to establish a presence in more Fortune 500 companies in the coming years, she said.

The ACFTU also plans to train union chairpersons in Fortune 500 companies to help conduct collective wage negotiations and mediate in disputes.

"Human resources managers or corporate partners should not act as union chairpersons. We think that division managers and mid-level managerial staff might be preferred candidates because they can better represent workers," Guo said.

Many employers and employees have benefited from the presence of unions.

Tan Gang and his fellow workers can hold negotiations with their boss every three months thanks to a collective contract they recently signed with their employer.

Tan, 35, a painter with Germany's Bosch Rexroth Hydraulics and Automation Co Ltd in Beijing, said the quarterly meeting will be attended by representatives of the employer, workers and union and provides a platform to discuss workers' demands.

"We are glad that the contract ensures a 13-month wage for each worker every year, and it stipulates that workers' annual pay rises are determined by local consumer prices and the company's profits," he said.

Li Ming, the firm's union chairman and production manager, said the collective contract will benefit nearly 1,500 employees.

"More than 120 people, representing both employees and the employer, spent nine months to draft, discuss, and finally sign the contract. Compulsory paid leaves and workplace safety have also been written into the contract," he said.

Shirley Li, the company's human resources director, said: "German managerial staff members believe that it's important to abide by union-related laws in China and open communication and dialogue is helpful in maintaining a win-win employment relationship."

In the manufacturing hub of Shenzhen in Guangdong province, which has attracted investment from nearly 200 companies of the Fortune 500, 93 percent of companies have set up trade unions.

"In the past those companies were reluctant to set up a union, but now they are cooperative. Many employers have already realized the benefit of having a union," Xiao Ming, a senior official with the Shenzhen Municipal Federation of Trade Unions, said.