The pay talks went on for three consecutive years. But bosses in the catering industry in Wuhan, a major city in central China, all agree that they have brought harmony. Although the catering industry was hit by the coldest snap in history, they feel they managed to get through it by making management and labour huddle together to keep warm. The result: they didn’t feel the cold so much this winter.
The Spring Festival, the most important holiday for Chinese people, is a peak season for restaurants. However, last year, rather than the predicted 600,000 tables, only 450,000 were booked, according to figures released by the Wuhan Association of the Catering Industry (WACI).
“Business was sluggish,” recalls Yang Nianrong, manager of a restaurant in the city. “I thought my employees would quit. But when they told me they’d decided to stay, I was really moved.”
Li Junmin, a migrant worker from Henan Province, is one of Li’s staff. He and fellow workers came to their boss’s aid when they saw him in dire financial straits. “We know the business is having difficulties. We would rather take a 20% pay cut and give up our holidays.”
Li saw a glimmer of hope, although he did not agree to their proposal. On New Year’s Day, he increased the workers’ wages as agreed during the previous pay talks and promised another hike when the next round of talks was held.
“The days when you would keep down labour costs to make a profit are gone in Wuhan,” says Liu Guoliang, President of the WACI. “The old style of management is not working. The only way out for the catering industry is making innovations in management and services.”
In the first half of 2013, the catering industry in Wuhan remained enviably robust amid the ongoing slowdown, with sales growing by 16.9% over the same period of the previous year.
Liu agrees that in the past three years, labour and management have stuck together through thick and thin. This was particularly true in 2013 when the catering industry was hit by recession and workers and enterprises banded together for survival.
Zhou Guohua, Chair of the Wuhan Commercial Workers’ Union, believes that collective bargaining is not simply about pay rises and better welfare. It is more about building a communication platform to keep both sides informed of each other’s needs so that they can work in harmony and achieve mutual benefits and a win-win result.
The catering industry used to have a rapid turnover, with 8% of workers leaving each year. Since Wuhan introduced collective bargaining, it has managed to keep its turnover rate below 4%.