Negotiated salary system saves industry
By Shao Xiaoyi (China Daily)
Updated: 2005-02-24 02:54

HANGZHOU: Migrant workers in the woollen sweater industry in a small east coastal town have been able to bargain for better pay, thanks to the efforts of a local trade union.

Following negotiations between the union and the industry association, monthly salaries have been agreed each year.

After receiving a warm welcome from trade union members in Ningbo, Zhejiang Province, migrant workers from Sichuan Province pose for a group photo. Trade unions are playing an increasingly important role in securing migrant workers' interests. [newsphoto]

"No workers complained last year that they had been paid less, or about delayed payments since we introduced the new wage negotiating system two years ago," said Chen Fuqing, the elected president of the industry trade union.

Xinhe Town in Wenling, Zhejiang Province, one of the major production bases for woollen sweaters in the province, has 116 such enterprises, both large and small in scale, employing around 12,000 workers, the majority of whom are migrants.

In the past, some employers would cut staff numbers drastically during the January to April slack season for woollen sweaters, while some reduced, or even held back workers pay.

Then when the prime season returned, local bosses found it difficult to keep skilled workers who were tempted by competitors using the lure of higher wages.

"Conflict between employers and employees in the past was often serious and some workers turned to the local government for help," said Chen.

The unstable flow of labour jeopardized the industry's future in the town.

As the then trade union vice-president in Xinhe Town, Chen realized that "standard employment rules need to be introduced in the sector by a trade union specific to the whole woollen sweater industry."

And in August 2003 the first industry trade union for private companies in Zhejiang was established in Xinhe. The committee of the trade union is made up of nine members, including Chen, and eight migrant workers employed by local companies.

On behalf of the interests of migrant workers in Xinhe, the trade union has negotiated with employers over workers wage claims twice.

At the end of summer, around September, the local industry association submits its initial pay and bonus proposal for the coming year, based on a market assessment, to the industry trade union. A delegation of over 100 worker representatives is then organized to discuss the wage proposal and hold a secret ballot at which they decide theirs.

Both are then discussed by the trade union and industry association, and after several rounds of negotiations between employers and workers, a mutually acceptable salary agreement is reached.

The fixed salary standard, detailing different pay scales according to the type of work and covering the entire production process, is then made public.

According to the agreement, the monthly salary for all employees should not be less than 800 yuan (US$96).

Salaries must be paid on time unless companies are experiencing particular cash flow difficulties. In that eventuality, firms must guarantee the minimum monthly allowance for basic living to its employees, the agreement dictates.

Standard pay levels will be adjusted each year in line with market demand and economic conditions, said Chen.

Payments for certain types of work increased by 5-10 per cent in 2004 compared to those of last year.

Li Yunzi, from Henan, employed in the Wenling Twelfth Woollen Sweater Factory, said the fixed salary standard gives her a clear idea about how much she can expect each month.

"Under the new wage standard, we get no less than 800 yuan (US$96) per month," said Li, whose salary last month was 2,500 (US$300).

In the past she had no idea what sort of salary her work could command.

"I feel no qualms about working in the factory now because the industry trade union is protecting us," she added.

The new wage negotiating system has greatly changed the formerly chaotic way of recruitment in the town, and created a good development environment for the woollen sweater industry, Chen said.

The new wage negotiating system has also been welcomed by local entrepreneurs.

The slack season did not see an exodus of workers as before, indicating an unprecedented sense of worker loyalty and security, said Wang Xinfa, president of the town's Woollen Sweater Industry Association.

While many Pearl River Delta regions are experiencing labour shortages, Xinhe has none.

"Employers can concentrate their efforts on business management rather than fighting with other companies for skilled workers, or dealing with labour disputes," says Wang.

Fu Nanbao, president of the trade union in Xinhe, said that with the help of the industry trade union and the new wage negotiating system, the relationship between employers and workers has gone from being "adversarial" to "co-operative."

Today "migrant workers are on more equal terms with their bosses," he remarked. More than ever the industry trade union is playing a more important role in protecting the legal rights of workers.

"The industry trade union acts as a bridge between workers and employers to find an appropriate solution, one which meets the interests of both and helps workers get the wages they deserve."

(China Daily 02/24/2005 page5)

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