The All-China Federation of Trade Unions (“ACFTU”) announced its collective bargaining working plan for 2014-2018 (“Working Plan”) in April, which calls on all lower-level union organizations to conduct collective bargaining in more companies and improve the quality of collective bargaining. The Working Plan emphasizes that the terms of the collective contract shall be detailed enough to be easily performed, and the labor unions should involve as many employees as possible in the collective bargaining process to increase the employees’ awareness of and satisfaction with the collective bargaining.

In the past, although many companies had conducted collective bargaining and signed collective contracts with their employees, the terms of most such collective contracts were very general, and in many cases were just a reflection of the basic legal requirements or the company’s existing compensation and benefits policy.

The Working Plan also calls on the unions to enhance their efforts in pushing for local legislation to promote collective bargaining. In a related development, the local legislature in Shenzhen on June 26 conducted a fourth reading of the Shenzhen Collective Bargaining Regulations which, if passed, would include: (i) granting employees the right of information concerning financial statements, wages, taxes and social insurance contribution payments; and (ii) requiring a party to respond to the other party’s collective bargaining request within 10 working days after receiving the request. While an earlier draft had included a provision requiring mandatory arbitration in case negotiations stalled, the latest draft only states that if during the collective bargaining process the employees go on strike or the employer closes the factory, either party may apply for mediation of the dispute by the local Labor Relations Reconciliation Commission, which usually consists of representatives from enterprise associations, labor bureau and labor unions.

In a related development, the Guangdong ACFTU is proposing a draft set of Guangdong Province Implementing Measures on Democratic Elections in Grass-Roots Unions, which would allow company unions to act more independently of company management influence; oftentimes in practice, company management can exert some influence over the union election process or union activities. For example, the preparatory team responsible for driving the union establishment process would be selected by the company party organization and upper-level union, rather than company management.