Employment Relations in China - Case Study Example

Name : xxxxxxxxxxx Institution : xxxxxxxxxxxx Title : Employment Relations In China Tutor : xxxxxxxxxxx Course : xxxxxxxxxxxx Date : xxxxxxxxxxxx Employment relations Employment relations refer to the interactions and relationships that exist within the labor market between employers and their employees and the government involvement in these relations (Cooper and Ellem, 2006). It dates back to the industrial revolution when for the first time industries were created to manufacture various goods and therefore needed a lot of workers to meet the labor demands. These workers usually worked under poor environmental conditions, were offered low wages, worked long hours, and performed the same task leading to monotonous work. These bad work conditions resulted in high employee turnover and numerous strikes by the workers that destabilized production. These problems led to the development of industrial relations as a way of encouraging better labor-management relationships between employers and employees. As such, employment relations also known as industrial relations, has two major parts; managerial relations and market relations. Market relations are concerned with such issues as pay, hours of work, benefits, leave, and pensions that are entitled to the employee. Managerial relations determine what and how market relations are carried out within the industry (Cooper and Ellem, 2006). It can therefore be stated that employment relations is concerned with a study of the regulations governing employment. Of great importance in these relations are the trade unions and the government that mediate how the market relations and managerial relations are carried out. A trade union usually represents the needs of a group of workers to a single employer. The unions usually engage in such activities as collective bargaining on behalf of the employees and legislation formation. The government influences industrial relations through the various laws and regulations that it enacts that regulates such issues as minimum wages, number of working hours, and working conditions which are of great importance to workers. Employment relations in China Employment relations in china have been characterized by a rejection of independent types of associations for workers in support of a solitary, centralized trade union federation and the significance of state owned enterprises as the heart of productivity as well as distribution of basic goods and services. There have been numerous state owned enterprises in china which have received most of the support from the government as compared to collectively owned enterprises (Zhu, 1995.) Employment has been offered on either temporary or lifelong basis with most of the workers being permanent employees. All aspects of their employment were controlled by the state labor personnel departments. Since the early 1940s, the enterprises were responsible for offering retirement benefits, housing, medical benefits, and social welfare to their employees (Yu, 2006.) Salaries and welfare were established through government policies. the settlement of the interests of the state, workers, and managers was realized within an administrative structure undertaken by the Communist Party. The 1950s saw the foundations of employment relations laid in china as a result of the cultural evolution taking place at the time. The Chinese communist party created the All-China Federation of Trade unions to serve as the mediator between the state and workers with trade unions being under the control of the communist party serving a transitory role by transmitting the ideological policies of the communist party to the working class with the aim of securing their support. The 1970s saw a change in political and market ideologies in china resulting in numerous changes in the labor and market structures in china (Harris, 1997.) The adoption of capitalistic ideologies resulted to privatization of most state owned enterprises as well as growth in the labor market. The four modernization program adopted in 1978 resulted in reforms in the employment relations in china. The government introduced labor contract systems which were constituted into law. It also introduced reforms in the wage system resulting in wage disparities so as to link performance and productivity with remuneration. The government also marketized social security through the transfer of social welfare responsibilities from enterprises to individuals (Yu, 2006.) The role of the state in the Chinese system of employment relations The state has a great role in the way employment relations in china are run. China has been predominantly a communist state despite recent adoption of capitalistic ideologies with the aim of stimulating economic growth and development. As such, the government controls most of the activities within the country through various tight held policies that ensure the government is able to control most aspects of Chinese life. As such, it has controlled the employment relations through having control over the All-China Federation of Trade unions where it had the overall control of its activities (Zhu, 1995.) The reforms of the 70s resulted in the creation of various trade unions and employer associations. Despite this, ACFTU has a monopolistic control over the affairs of workers in china as mandated by both the Statute Of Labor Unions and the Union Law. The role of the employers in Chinese system of employment relations Employers are an important aspect of employment relations in china. Their role in employment relations in china is governed by the employee assembly act that requires all enterprises to set up employee assemblies. Its main aim is to protect and encourage the power and functions of trade unions as well as employee representatives who are involved in the process of controlling significant business decision making in addition to overseeing administrative leadership. There are numerous employer associations in china that fall under three main categories which are civil chambers of commerce, industry associations and the chambers of commerce (Yu, 2006.) The role of unions in the Chinese system of employment relations Trade unions are aimed at bettering the welfare of workers. The Chinese communist party has for a long time being opposed to any independent endeavors by workers. It thus created the All-China Federation of Trade unions to serve as the mediator between the state and workers. Before the Cultural Revolution that took place in the 1960s, trade unions were under the control of the communist party serving a transitory role by transmitting the ideological policies of the communist party to the working class with the aim of securing their support. In addition, most of the trade unions that existed at this time were abolished (Zhu, 1995.) Since the 70s, trade unions have increasingly become established and able to engage the state in negotiations on behalf of workers. The issues that challenge the system of employment relations in China Collective bargaining The economic reforms that were begun by the government resulted in the taking away of some of the benefits that workers had before. This placed most enterprises on the verge of bankruptcy as well as resulted in the increase in labor disputes. For instance, collective labor disputes multiplied by six times (Baek, 2000). As a result, the Chinese government acknowledged the necessity for instituting collective bargaining structures. These collective bargaining structures were centered on: the development of collective consultations between employers and trade unions; The development of a system of discussion of the various legal and contractual laws governing labor relations and disputes (Clarke, 2004). Through this framework, ACFTU established a campaign aimed at securing the endorsement of the state on the use of collective contracts. These contracts were established so as to ensure the parties involved followed the various guidelines provided by the government and local labor bureaus. Despite these milestones achieved in establishing collective bargaining, there are still various challenges in ensuring it works effectively. These consultations are hindered by various laws that have instituted that are aimed at ensuring the legality of collective contracts. In addition, wage negotiations are frequently conducted independently from the collective contracts (Yu, 2006.) The proposals that trade unions make are usually referred to lower management levels and suggestions reported to the relevant bodies which is rather a lengthy process. Industrial dispute Another challenge to the employment relation sin china has been a large number of industrial disputes. The recent efforts by the Chinese government to adopt capitalistic policies so as to further integrate with other world economies have resulted in the growth of labor disputes in china. For instance, the amount of recorded labor disputes increased from 33,000 in the year 1995 to 155,000 in the year 2001. The State Council established the interim set of laws for settling labor disputes within State owned enterprises in 1987 (Zhu, 1995.) This was an effort to create labor dispute resolution mechanisms through institutional measures since 1955, when official measures aimed at solving labor disputes were eliminated. The laws established a three level foundation for settling disputes: internal arbitration within the enterprise, mediation at local levels founded on a tripartite principle; and absolute resolution through the People’s Courts. Industrial Democracy The third challenge that employment relations faces in china is the lack of industrial democracy. The state still has a lot of control over trade unions which limits their ability to effectively negotiate the needs of works. This is evident since an enterprise mediation commission that had been created was afterwards changed to an advisory one. (Baek, 2000). Despite this, the institutionalization of arbitration and mediation functions of the trade unions resulted enabled them to effectively contribute in dispute resolution. The chairmen these of enterprise trade unions supervise as well as chair the mediation committees. However, in such circumstances, trade unions undertake more of a role of mediators instead of being the organizers of workers. As such, this hinders the ability of trade unions to undertake collective bargaining roles effectively as they become more engrossed in handling labor disputes. The future of the system of employment relations in China There is need for further deregulation in the employment relations in china so as to enable trade unions to be actively involved in the decision making process of workers welfare. This is because the Chinese system of employment relations is still extremely regulated by the government with the decision making powers being vested by the government (Yu, 2006.) Most of the changes at the enterprise level and work unit level that have occurred within this sector are a result of policies that are decided at the topmost levels of government as has been the case since 1949. This deregulation is much needed considering china has now become a major player in the world economy with high amounts of the products being used around the world being produced in china. Most of the multinational companies have production lines and factories in china as a result of the high number of workers available in china (Petras, 2000). Lessons to be learned from the study of the system of employment relations in China The first lesson is that an increase in market growth and better economic conditions led to more industrial disputes since there is an increase in the numbers of employees as well as employers. The adoption of capitalistic forms of market economy resulted in the increase in labor disputes in china by more than six times. The second lesson is that too much government control over the workings and functions of trade unions hinders their ability to represent fully the needs of workers. This is the case in china where the state still has a lot of control over trade unions through the umbrella ACFTU body. Conclusion Employment relations refer to the interactions and relationships that exist within the labor market between employers and their employees and the government involvement in these relations. Employment relations in china have been characterized by a rejection of independent types of associations for workers in support of a solitary, centralized trade union federation and the significance of state owned enterprises as the heart of productivity as well as distribution of basic goods and services. Challenges facing employment relations in china include inadequate collective bargaining, a lack of industrial democracy, and increasing labor disputes. There is need for further deregulation in the employment relations in china so as to enable trade unions to be actively involved in the decision making process of workers welfare. This is because the Chinese system of employment relations is still extremely regulated by the government with the decision making powers being vested by the government. The first lesson is that an increase in market growth and better economic conditions led to more industrial disputes since there is an increase in the numbers of employees as well as employers. The second lesson is that too much government control over the workings and functions of trade unions hinders their ability to represent fully the needs of workers. Bibliography Baek, S. 2000. “The Changing Trade Unions in China” Journal of Contemporary Asia, Vol. 30, Issue 1, Clarke, S., Chang, H., and Lee, Q. 2000. “Collective Consultation and Industrial Relations in China” British Journal of Industrial Relations, 42:2. Cooper, R. and Ellem, B. (2006). Union power: space, structure and strategy. In M. Hearn and G. Michelson (eds), Rethinking work: Time, space and discourse. Melbourne: Cambridge University Press. 123–43. Harris, P. 1997. ‘Chinese Nationalism; the State of the Nation’. The China Journal, 38: 121-138. Howell, J. (1998). ‘Trade unions in China: the challenge of foreign capital’. In G. O’Leary, Adjusting to Capitalism. Armonk, NY: M. E. Sharpe, pp. 150–72. O’Leary, G. 1998. Adjusting to Capitalism: Chinese Workers and the State. Armonk, NY: M. E. Sharpe. Petras, J. 2000. “China in the Context of Globalization” Journal of Contemporary Asia, Vol. 30, Issue 1. Yu, J. X. 2006. ‘Industrial Association: In Search of Positive Interaction with Enterprises and Government’. Comparative Economic & Social Systems, Issue 2, pp. 118-123; Zhu, Y. 1995. ‘Major changes under way in China’s industrial relations’. International Labor Review, 134: 37–49. Read More