According to the Legal Services Centre of the Beijing Trade Union Federation, the Beijing Labour Dispute Mediation Centre has successfully solved a collective labour dispute in just 20 days, with 27 contractors being compensated to the tune of 1.37 million yuan in total (over US$ 220,000).
All 27 worked in a state-owned logistics company. To make its recruitment procedures more convenient, the parent enterprise registered a so-called labour services company. Employees were required to sign an employment contract with the latter, becoming contractors in the process.
However, according to the most recent legislation, employers shall not establish their own labour dispatching enterprises. The labour services company therefore decided to transfer hundreds of employees of the logistics company to two large labour dispatching outfits selected through open bidding. Although the employment contract change agreement specified all the relevant issues, some employees doubted that the new companies would take into account all their years of service and demanded appropriate compensation from the labour services company. When the two parties then disagreed about the compensation plan, a labour dispute occurred.
The 27 contractors reported the dispute to the parent enterprise, the State Bureau for Letters and Calls and then the All-China Federation of Trade Unions (ACFTU). Deeply concerned about the situation, the Legal Services Centre of the Beijing Trade Union Federation asked the contractors for the labour dispute application letter and assigned an experienced mediator to the case.
As a result of discussions between the manager of the logistics company and the federation, a dispute agreement was signed after 20 days of effort and a total of 1.37 million yuan was paid out to the 27 contractors in compensation.