The Guardian 14 March, 2007

Unionising Wal-Mart:
The Chinese experience


Chris White*

At the high-rise Beijing headquarters of the All-China Federation of Trade Unions (ACFTU) I asked Ms Guo Chen from their Grass-Roots Organisation and Capacity Building Department to go through the steps which resulted in unionising Wal-Mart stores in China.


Wal-Mart is the largest retail company in the world and is actively anti-union. ‘No union at all’ is its motto. A management handbook says that ‘Staying union free is a full time commitment. The commitment to stay union free must exist at all levels of management — from the Chairperson of the Board down to the front line manager…The time involved is 365 days per year.’

Breakthrough

The China union breakthrough is therefore a significant achievement. The reputation of the ACFTU was that it unionised top-down with management approval. But arguably Wal-Mart was different and involved bottom up union building. Does this herald a shift from the unique Chinese servicing model to an organising model of unionism? Can the ACFTU be an effective collective bargaining voice for Chinese workers?

For years, the regional trade unions reported that Wal-Mart managers were opposed to unions in China. Local Wal-Mart management always rebuffed union approaches repeating, "our workers do not want to join. We are reluctant to have our Chinese workers in the union". Other multinationals agreed with Wal-Mart.

The 2003 ACFTU Congress resolved to set up unions among Wal-Mart workers and the unionisation of foreign multinationals began to be publicly debated.

China’s Trade Union Law states that there is a legal right for 25 workers to start a local union committee in an enterprise. The ACFTU at the national and local level held meetings to unionise Wal-Mart. In 2005, again the request was made to each regional city union organisation and to local trade union cadres in branches to talk to the local management in Wal-Mart stores and ask them to allow their workers to be in the union. This was done, but were again rebuffed. In Nanjing the Trade Union Council was rebuffed 28 times. The top-down attempts were not successful.

Normally, the ACFTU did not organise from the bottom up as happens elsewhere where unions face hostile management. But elsewhere, unions had not succeeded in Wal-Mart either.

An article came to the attention of the ACFTU leaders in the Chinese business news asking, ‘Is Wal-Mart or China’s ACFTU the more powerful?

Finally in 2006, the trade union heads and organisers at a large meeting resolved on a unionisation drive:

  • mobilise all workers in Wal-Mart into the union;
    give attention to a public campaign in the mass media, TV and extensive leafleting and pamphlets, etc;

  • increase material and manpower investment for unionisation;

  • enforce legal provisions

  • that management not prevent workers from joining a union;

  • that hindering or limiting this right is illegal;

  • that businesses investing in China must abide by local Chinese laws;

  • increase investment in dealing with those workers who have been punished unfairly or mistreated by management;

  • improve low wages and conditions.

    Into action

    The local union cadres went into action in front of Wal-Mart exits. Organisers handed out flyers and leaflets urging workers to join. Union pamphlets showed the benefits of joining with special offers for a range of services. Local cadres met workers in restaurants and in their dormitories and homes at night.

    Reports came in that young women were too scared to join as management would discriminate against them. Trade union cadres complained to management pointing out the law allowing workers to join. Management continued to say that their workers did not want to join.

    The union locally discussed how to go forward. Wal-Mart’s rude and arrogant attitude was reported in the newspapers. Journalists reported the contest, leading to a public outcry.

    Celebration

    On July 29, 2006, the first trade union committee in the world was formed in a Wal-Mart store. It was formed in secret and held at night to include night and day shift workers. A young 29-year-old meat-packer was elected the leader and Chair and thumbprints recorded the union oath of the workers. Their names were kept secret at the local level so as to not give information to management. With the first 30 joining, the feeling was that it was historic.

    There was a celebration and the singing of the Internationale. Photos and speeches of the young chairman, Ke Yunlong were distributed. He declared that it was "the most meaningful achievement of our lives".

    Union organisers worked seven days and nights in a row giving advice in the provinces. Legal advisors were used to help dispel the misgivings of those who feared to join the union. The union would defend their rights.

    When Wal-Mart found out from the public announcement that trade union committees had been formed, they first responded adversely. Various tactics were used to intimidate workers not to join. They alleged that their workers had not joined voluntarily. But after an argument, management started to say locally that if 25 decided to join, then they would recognise the law.

    Many workers were now saying they had a long aspiration to join, but were worried about being punished or dismissed and worried to raise their demands. Other union local committees emerged in stores. Unionising Wal-Mart became a national and then an international story.

    The head of Wal-Mart China came to the ACFTU headquarters and claimed the company wanted to play a greater role. One point they put up was that the local management could be the Chair of the union committee. This was rejected. Wal-Mart then said that it would be better if they organised the trade union committee elections, rather than the union.

    Workers call for bigger union role

    In response to this the ACFTU surveyed the union members who all said the union should play the bigger role and that union candidates should come from the workers and not be put up by management. Back in the stores, this was debated and workers insisted that they had to elect the union committee. They did not want "an employers’ union". Wal-Mart had to back off.

    Eventually Wal-Mart made an agreement with the unions.

    Workers are to seek guidance from the union, membership is voluntary and open to all, and democratic elections must be carried out for the chair of trade union committees in each store.

    A compromise was that the preparatory committees have management, district union officials and employees, but management is to be only 20 percent of committee members.

    By October 2006, the ACFTU had recruited 6,000 members in Wal-Mart stores. The trade union committees in some stores have increased wages and succeeded in raising the wages of part-time workers. The probation period for part-time workers was abolished. The union assists in disputes and collective agreements are being signed.

    Wal-Mart now says, "we are abiding by the law allowing workers to join and that Chinese unions are different from unions in the west, that the ACFTU has made it clear that its goal is to work with the employers, not promote confrontation".

    The ACFTU insists it sticks to the principle of relying on workers to form unions and that it is a big departure from past organising practices. But critics say the arrangement is still top-down.

    The ACFTU says this organising experience is being driven into all foreign enterprises not unionised, with a target of 70 percent unionisation by the end of 2007.

    But why is this significant? It sounds like "normal" organising to Australian trade unions. The last ACFTU Congress gave priority to unionising the workers in the foreign sector — target the biggest companies first and others would follow.

    Interesting times indeed! How should Australian activists engage?

    Wal-Mart is not in Australia. It is however, the biggest company in the world, has 1.3 million employees, sells annually more than the GNP of most countries, is the biggest employer in the US, will open 70 super centres in China in 2007, 80 percent of their 6,000 supplier factories are in China and these Chinese suppliers are screwed on price, so they exploit other Chinese workers.

    Worldwide Wal-Mart trumpets its low prices. China Newsweek (22/3/2004) reported "The Dark Side of Wal-Mart’s Low Prices: Suppliers Seriously Violate Labour Law". It reported lower wages, longer hours, the poorest of conditions and huge profits made in large sweatshops. The ACFTU is now pushing labour administrations for greater compliance by companies in 2007.

    Providing services

    In saying that trade unions in China are different from unions in the west is to point out that they are greater servicing organisations. I stayed in Beijing at The People’s Palace, one of its four-star hotels, next to its multi-storied headquarters.

    They organise health insurance and social security benefits in state-owned enterprises, run senior citizen homes, assist workers to find homes, run canteens, medical centres, kindergartens and public baths.

    Eighty percent of union members in a poll in private companies on what the union did well put cultural events, cinema tickets at the top. Only eight percent said that the union fights for workers’ workplace wages and conditions. Is this being turned around?

    In China the main responsibility of unions is seen to be economic development. In all the enterprises, the union supports production and economic efficiency. In some enterprises the union head is also at the top of management. Finance for the union is guaranteed, as the enterprise is required by law to submit 2 percent financial assistance. There are union participatory rights particularly in state owned enterprises and increasingly in the private sector. But although there are "employee councils and assemblies", and rights for the union to conclude collective agreements, these collective agreements are not extensive and only cover 22 percent of the private sector. The ACFTU is not yet in a collective bargaining role to improve wages and conditions as in the West. But it has to respond to the increasing demands of its members.

    *Chris White is a labour law researcher in Canberra and at the Flinders University School of Law. He was a former Secretary of the United Trades and Labour Council of South Australia.

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