In April 2014 the All-China Federation of Trade Unions (ACFTU) announced its collective bargaining working plan for 2014 to 2018, which calls on all lower-level union organisations to conduct collective bargaining in more companies and improve the quality of collective bargaining. The working plan emphasises that the terms of collective contracts should be detailed enough to be performed easily and that labour unions should involve as many employees as possible in the collective bargaining process in order to increase employee awareness and satisfaction.

In the past, although many companies conducted collective bargaining and signed collective contracts with their employees, the terms of most of these collective contracts were very general and in many cases merely reflected the basic legal requirements or the company's existing compensation and benefits policy.

The working plan calls on unions to enhance their efforts in pushing for local legislation to promote collective bargaining. In this regard, on June 26 2014 the Shenzhen legislature conducted a fourth reading of the Shenzhen Collective Bargaining Regulations. If passed, the regulations will:

  • grant employees the right of information concerning financial statements, wages, taxes and social insurance contribution payments; and
  • require a party to respond to the other party's collective bargaining request within 10 working days of receiving the request.

Although an earlier draft included a provision requiring mandatory arbitration for stalled case negotiations, the latest draft states only that if either the employees go on strike or the employer closes the factory during the collective bargaining process, either party may apply for mediation of the dispute by the local labour relations reconciliation commission, which usually consists of representatives from enterprise associations, labour bureaux and labour unions.

The Guangdong provincial ACFTU has also proposed a draft of the Guangdong Province Implementing Measures on Democratic Elections in Grass-Roots Unions, which would allow company unions to act more independently of company management influence; in practice, company management can often exert some influence over the union election process or union activities. For example, the preparatory team responsible for driving the union establishment process may be selected by the company party organisation and upper-level union, rather than company management.

For further information on this topic please contact Andreas Lauffs or Jonathan Isaacs at Baker & McKenzie's Hong Kong office by telephone (+852 2846 1888), fax (+852 2845 0476) or email (andreas.lauffs@bakermckenzie.com or jonathan.isaacs@bakermckenzie.com). The Baker & McKenzie website can be accessed at www.bakermckenzie.com.