| SHANGHAI, June 1
SHANGHAI, June 1 Behind China's biggest strike
in decades last month was a new player in Chinese labor
A previously unpublished account from inside the strike at
Taiwanese shoe manufacturer Yue Yuen obtained by Reuters shows
that supervisors were the first to challenge senior plant
leaders about the social insurance contributions that became the
focus of the dispute. Yue Yuen Industrial Holdings
declined to comment.
The involvement of managers underscores the growing
complexity and unpredictability of labor relations in China. A
generation of long-serving migrant factory employees is starting
to retire just as the economy slows and the spread of social
media makes strikes easier to organize.
Yue Yuen's strike wasn't the first time in recent years
managers, rather than front-line workers, helped orchestrate
industrial action in China. Managers were also involved in
leading a strike at IBM's facility in Shenzhen in March,
according to a worker and another person briefed on the strike.
IBM declined to comment.
Supervisors and other low- and mid-level managers also
helped corral workers during a March strike at Shanmukang
Technology, which supplies mobile phone cases to Samsung
Electronics, a former employee said.
Managers have been orchestrating strikes during
international deals for years, lawyers said. "It happens all the
time" that managers encourage workers to strike during an
international transaction that affects a company's Chinese
operations, said Jonathan Isaacs, special counsel with
responsibility for Chinese employment and labor issues at law
firm Baker & McKenzie in Hong Kong.
In many cases "the reason an M&A transaction, layoffs or
restructuring goes sideways or causes labor unrest is that the
local management were disgruntled and riled up the rank-and-file
workers", he added.
In November 2011, mid-level managers led thousands of
PepsiCo Inc workers to strike in protest against the
terms of the company's acquisition by Tingyi Holdings, according
to Hong Kong-based worker advocacy group China Labour Bulletin
However, some of the largest recent strikes, including the
Yue Yuen action, don't involve a factory sale or restructuring.
Labor unrest has surged in China in recent months as slowing
economic growth and rising costs have squeezed companies in
industrialized areas like the Pearl River Delta in southern
Guangdong province. CLB has recorded 319 strikes and labor
protests since the beginning of the year.
MORE ACTIVE ROLE
Chinese factory disputes typically start with younger
employees pushing management for higher pay. But in the last few
years, as restructurings have become more common, managers have
begun to take a more active role in negotiations and work
stoppages because they have more at stake, lawyers said.
China's 2008 labor contract law requires companies
terminating employees to pay compensation worth one month's
salary for every year of employment. The longer an employee has
been working at a factory, the greater the potential payoff from
a closure, merger or restructuring.
Turnover at Chinese factories is high - reaching 100 percent
a year in some companies. Younger workers spin through jobs
quickly, sometimes staying only months in one plant. Managers
can be among a plant's longest serving employees.
"Strikes started by older workers often come about because
of a change in the company, when a company is being merged or
restructured," says Dong Baohua, professor at the East China
University of Politics and Law. "Older workers want to cash in
on their years of service."
Line managers may have information about organizational
changes before rank-and-file workers. And they may use the
threat of a work stoppage to motivate corporate leaders to
improve managers' pay or compensation, lawyers said.
Managers "are better at motivating and organizing others,"
says Guangdong Labor Institute Deputy Secretary-General Yang
Zhengxi, who noted that his observations were based on field
research in a Sanyo electronics plant in Shenzhen in 2011. "But
managers will always stay off the front lines in strikes, always
be in a mobilizing role."
SPREADING THE WORD
According to the account compiled by a labor group, a
supervisor first raised a complaint about the social
contributions issue in late March, a few weeks before the strike
began. The supervisor and colleagues spread word among workers,
who then went to look up their social insurance contributions.
The labor group requested anonymity to protect its relationship
with Yue Yuen staff.
A Yue Yuen worker who would only give his name as Wang said
low-level managers were involved in pressuring workers to return
to work once the company agreed to their demands. The company
told them they would go bankrupt if the workers did not compel
the workers to go back to work, he said.
During the IBM strike, after a chaotic first day, line
managers began to organize the workers, according to a worker
who asked not to be identified.
Wu Xingcan, 28, worked on and off at South Korean-owned
Shanmukang Technology between 2012 and last month. The March
strike was triggered when the factory requested that workers
contribute more to the social insurance fund in line with
Chinese law, Wu said. After the strike began, group leaders and
supervisors privately encouraged workers to stay off the
production line. Shanmukang could not be reached for comment.
"The longer these people have worked in factories, the
greater their interest in social insurance, and the more likely
they are to incite other workers and participate in strikes
themselves," said Pun Ngai, sociology professor in the applied
social science department at Hong Kong Polytechnic University.
China has some 40 million migrant workers aged over 50 -
about 15 percent of the country's 262 million migrant workers,
according to the National Bureau of Statistics.
At Yue Yuen, the common belief among roughly two dozen
employees with whom Reuters spoke during the strike was that the
social insurance problem came to light when a newly-retired
employee went to collect her retirement benefit earlier this
year. One worker told Reuters this retiree was Chen Yuchi, a
senior employee who left the factory last year and is now living
in central Hubei province.
In 1989, aged 26, Chen moved to Gaobu where the
newly-founded Yue Yuen had just built its sneaker factory. She
took a job, and in April 2013, after 24 years at the factory,
retired as a manager. In August, after turning 50, she went to
the social insurance office to collect her retirement benefit.
"It was only a little more than 600 yuan ($96). I thought,
it's so low. Nobody explained why," she told Reuters by
telephone last month.
Shocked, she returned to the managers' dormitory and told
former colleagues there. When Reuters reached Chen this week,
she declined to discuss the issue further.
($1 = 6.2486 Chinese Yuan)
(Additional reporting by Shanghai newsroom)