The key players in Chinese trade unions

The Chinese trade union system is a broad network of trade unions spearheaded at the top by the All China Federation of Trade Unions (ACFTU) with close ties to the China Communist Party (CCP). At the grassroots level are the Enterprise Trade Unions (ETUs) within individual companies.  In 2009, 311 million workers were members of Chinese trade unions, the largest number in the world.

The ACFTU's primary role is to assist the state in ensuring the continuing operation of the labour market. This is contrary to the traditional role of trade unions in western countries which has been to uphold workers' rights, for example, by coordinating the mobilisation of the workforce in industrial disputes.

Instead of being led by employees, the ETUs are generally led by the management of the corporation within which their members work.  As such, negotiations over wages and working conditions are not the modus operandi of the ETUs.  Whilst they legally represent the interests of workers, the ETUs are more focused on the well-being of the enterprise at the direction of the CCP.

The function of ETUs is being challenged by a newer generation of workers who are more educated and politically aware than the earlier generation.  As a result, the number of employees' strikes and wage demands have increased in recent years.  This has forced the ETUs to reconsider their role, given the risk of disgruntled employees taking more action of their own accord.  This changing dynamic will become more apparent in the coming years.

Trade unions and the law

Under the law, employees must be allowed to form a trade union if 25 or more of them wish to do so.  Whilst an employer is not responsible for setting up a trade union, it must not prevent a trade union from being established. Once established, the trade union must be consulted in relation to all ''material" work issues, such as salary review and unilateral terminations.

A trade union is funded by contributions from employers. Where an ETU has been formed, 2% of the total wages of the entire workforce must be paid by the employer to the trade union. Such funds will be used primarily to serve the employees and support the trade union activities.

One of the most criticised aspects of trade union law in China is the fact that there is not a legal right to strike in industrial disputes, although this has not precluded such action from taking place in practice. For example, in early 2012, 200 members from the Microsoft Xbox production line of Foxconn Technology staged a strike and threatened to kill themselves by jumping off a building.  They were demanding an increase in pay and proper compensation if they were transferred.

Latest developments

The ACFTU has a goal of unionising 90% of all companies in China. Thus, companies (particularly, the foreign-invested companies operating in China) have been pressed by the ACFTU to form unions.

In February 2012, new rules were jointly issued by the ACFTU and the CCP that expressly provide for an Employees' Representative Congress (ERC) to be organised in each company.  Although an ERC is separate from an ETU, practically the two may assist each other.

An ERC can review important decisions that affect the interests of employees, make proposals, approve collective agreements and elect employee representatives (where applicable).

Currently, establishing a trade union or ERC is not mandatory and there is no punishment or other reprimand for a company which fails to do so.  However, as a result of a strong push from the local ACFTU branches, worker unionisation will continue to rise in China.