November 27, 2008 / 3:22 AM / in 9 years

China toy workers get improved payouts after violence

BEIJING (Reuters) - A Hong Kong toy manufacturer has agreed to improve compensation terms for a batch of laid-off factory workers who clashed violently with police in south China over severance payouts, state media reported on Thursday.

Rising labour costs, falling export orders and a weak Christmas outlook have forced a growing number of Chinese toy factories to close or lay off workers, heightening the country’s social strain as the global financial crisis worsens.

A crowd of 500 workers overran nearly 1,000 police and stormed into the “Kaida” toy factory run by top Hong Kong toy manufacturer Kader Holdings in the latest sign of social strain in China’s industrial heartland of Guangdong province.

The workers overturned police vehicles, smashed windows and computer monitors in a dispute over compensation for laid-off workers in the industrial belt of Dongguan where thousands of factories have closed.

Hong Kong-listed Kader (0180.HK), one of the city’s largest toymakers which counts industry goliaths like Hasbro among its clients, said in a statement that it regretted the incident but reaffirmed its financial structure was “sound and stable.”

Kader, which employs around 8,000 people at the factory, laid off 380 workers last week and a further 216 contracts were due to be terminated on Wednesday, the China Daily said.

Kader said the 400 or so workers had been “compensated accordingly” under China’s Labour Law and rewarded staff who’d served more than five years with “extra bonuses.”

    The China Daily however quoted local official Li Zhihui as saying the company would “offer a new plan about giving economic compensation and bonuses to the employees whose contracts were terminated.”

    The newspaper didn’t clarify whether all contracts would be renewed or just those of “senior” employees.

    Last month, about 1,000 workers protested outside another toy factory in Dongguan, demanding unpaid wages after the company shut its doors.

    Reporting by Beijing newsroom and James Pomfret in Hong Kong; Editing by Nick Macfie Keywords: CHINA TOY/

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