First collective contract for Auto Parts industry

Since the financial crisis erupted in 2008, Chinese trade unions have been pushing for collective bargaining at regional and industrial levels. Zhang Jianguo, ACFTU Director in charge of collective contracts, says that pressing ahead with collective wage bargaining will go a long way to establishing a series of mechanisms for wage determination, normal wage growth and wage payment security, as well as for workers to participate in income distribution and supervision. It will also do much to promote the building of a unified, well-regulated and orderly employment market, create a favourable environment for sustained and healthy development of enterprises and build new socialist labour relations based on justice and win-win development.

In 2010, the ACFTU drew up the 2011-13 Work Plan for Further Promoting Collective Wage Bargaining (hereafter referred to as “the plan”). Under the plan, collective wage bargaining will be introduced in all enterprises within three years.

The plan underscores the need to implement regional and industrial collective wage bargaining as well as in the private sector and multinational corporations. In an effort to solve the problem of low pay for workers, particular attention should be given to regional and industrial collective wage bargaining in First Collective Contract for Auto Parts Industryareas with a high concentration of industrial clusters, small and medium-sized enterprises and labour-intensive firms. The ACFTU is making an all-out effort to promote the establishment of a collective wage bargaining system in the three years starting from 2011.

According to the plan, the ACFTU would have the system set up in 60% of unionized enterprises by the end of 2011, raise the figure to 70% by the end of 2012 and bring the total number up to 80% by the end of 2013. The plan requires the system to be established in all multinational corporations by the time the three-year plan is completed.

In the meantime, the ACFTU issued the Opinions on Establishing the System of Collective Wage Bargaining in Multinational Corporations Operating in China, calling for the system to be set up at corporations ’ headquarters and collective wage contracts to be signed that cover their branch companies. A branch company may, if it sees fit, conduct a second round of pay talks based on the contract signed by its parent company and sign a second contract, but its standards should not fall below those of the parent company.

To ensure that things go smoothly, the ACFTU developed the Training Programme for Collective Bargaining Experts. Under the programme, 150,000 union officials will attend training sessions.

On 16 December 2013, six auto parts plants in Beijing signed a collective wage contract at the International Conference Centre of the Beijing Auto Group, signalling that trade unions in Beijing had taken another important step forward in exploring the possibility of introducing collective wage bargaining at the industry level.

Since 2012, the Beijing Trade Union Federation for the Auto Parts Industry has been racking its brains to think of a way to bring in collective wage bargaining. As an experiment, it allowed enterprise trade unions to enter into negotiations with Beijing Hainachuan Automotive Parts Co. Ltd, a leading enterprise in the industry, over income distribution, wage standards, pay levels, education funding and social insurance. The unions worked out a draft agreement after inviting comments from workers and consulting with the company’s legal representative over its content. After obtaining recognition from management, they submitted the final agreement to the workers’ congress for approval, and it was filed with the local social security and human resources bureau.

The agreement stipulates that the minimum wage standard for the auto parts industry in Beijing shall be set based on the one released by the Beijing Municipal Government for the year and that it shall not fall 1.07 times below the minimum standard set by the government, or 1,498 yuan per month if calculated on the basis of the wage level for 2013.

Among the six enterprises involved in the talks, Yanfeng Visteon Automotive Trim Systems Co. raised its minimum standard by 30%, with an annual increase of 8%.

Zhang Bo, Chair of the Machine-Building, Metallurgical and Building Materials Workers’ Union of China, says that what is innovative about this method is that such negotiations are conducted by a trade union federation with unions in leading enterprises playing a leadership role. It allows interest relations in an industrial chain to be adjustable in order to ensure fair income distribution.

Wang Tao, Vice-Chair of the Beijing Trade Union Federation for the Auto Parts Industry, says that the union will accelerate its efforts to introduce collective wage bargaining in all enterprises and expand its contents and range.

Chinese trade unions are currently exploring ways to bring industry-level collective wage bargaining to all businesses in China in the belief that an industry-level wage standard can provide a “second guarantee” for workers in all industries to regulate wage standards.

  Source: ACFTU  2014-06-09

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