Saturday, January 5, 2013

Labor Issues in China - a shift underway in CCP's approach?

Lack of labor regulations are generally acknowledged to be a significant reason for China's fast manufacturing growth. The ease with which the concerns of Labor could be ignored and disregarded was a major incentive for both local and foreign Capital. The owner's and management's were reassured that their control would not be challenged or obstructed by labor. In order to focus on national growth, the Chinese government quietly seemed to have turned a blind eye to the considerable labor exploitation over the last 2 decades. But all that seems to be heading for a change. The government appears to have noticed that a problem area has been created. Labor Regulations or rather the absence of regulations has now begun to be redressed.

Three key highlights of the emerging regulatory changes :

Fresh national regulations issued by the Chinese Communist Party (CCP), mandate that employee representative councils or “ERCs”  (“yingdang”) be established in enterprises for democratic management. In the past, ERCs were mandatory only in state-owned enterprises, but for the first time now national regulations expand this to all enterprises.
Secondly, In May 2012, the Central Committee of the CCP issued a notice to improve the CCP’s work in private companies.  All private companies having 50 or more staff should have CCP member(s). If a company has at least three CCP members, then a Party organization should be established within that company.
Lastly, local chapters of the All-China Federation of Trade Unions ("ACFTU") are taking steps to implement the "Rainbow Plan", under which collective bargaining agreements should be in place in all companies with unions by the end of 2013. 

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