Why worker-supported collective bargaining may still fail. Union strategies and supply chain structure in South China
| Date | 02 December 2019 |
| DOI | https://doi.org/10.1108/ER-06-2019-0250 |
| Pages | 471-491 |
| Published date | 02 December 2019 |
| Author | Siqi Luo,Tao Yang |
| Subject Matter | HR & organizational behaviour,Industrial/labour relations,Employment law |
Why worker-supported collective
bargaining may still fail
Union strategies and supply chain
structure in South China
Siqi Luo
Center for Chinese Public Administration Research, School of Government,
Sun Yat-sen University, Guangzhou, China, and
Tao Yang
Tsinghua Institute for Advanced Study in Humanities and Social Sciences,
Beijing, China
Abstract
Purpose –The purpose of this paper is to illustrate that some enterprise unions in South China, as strategic
labor actors, made local progress in collective bargaining, but further elaborates on why gainful bargaining
would require a more systematic understanding of the prevailing industrial structure.
Design/methodology/approach –This paper is mainly drawn from intensive site visits and 51 in-depth
interviews in 2013 and 2014, and several follow-ups up to 2018. Three cases of collective bargaining, featuring
different union strategies of assertive negotiation, informal cooperation and direct confrontation, are
discussed in detail.
Findings –The study illustrates that viable collective bargaining with worker-supported unions is possible
in China. However, the effectiveness of bargaining does not count on this alone; the supply chain structure
also imposes significant constraints, mainly by narrowing the bargaining scope of each supplier and
differentiating the structural power of their unions. In these cases, institutionalized union coordination
beyond individual suppliers is proposed.
Research limitations/implications –These cases began as post-strike bargaining in Japanese auto
supply chains and became the frontier of industrial relations in China. The impact of the supply chain in
different sectors or regions requires further study.
Originality/value –This paper draws attention to the effect of an “invisible”but increasingly significant
factor, industrial structure, on enterprise-level collective bargaining in China, unlike many previous criticisms
of unwillingness or incompetence among labor actors.
Keywords Supply chain, Collective bargaining, Enterprise union, Industrial structure, Production regime
Paper type Research paper
All of a sudden, the capital becomes a “giant”, which ties assemblers and suppliers together. We
laborers are not tied together –there is no strong association of unions. We are only workers and
unions in an individual supplier factory, but we have to bargain with the “giant”. In appearance, we
bargain with our general manager. What is behind the general manager is the capital’s collective
will and strength. (An enterprise union chair (Interview, July 2014))
1. Introduction
Collective bargaining[1] was written into Chinese labor law more than two decades ago but
has been largely dysfunctional in practice (Taylor et al., 2003; Brown, 2006; Wu, 2012; Luo,
2013). Nevertheless, local initiatives that are not exactly identical to the central union
guidelines have always existed (Liu, 2010; Chen, 2012; Friedman, 2014; Wen and Lin, 2015;
Pringle, 2016). Some believe that collective bargaining practices have entered a new stage,
particularly since the 2010 strike wave. When the bargaining in the Nanhai Honda plant
achieved a 33 percent wage increase for workers, it soon became the benchmark for many
Employee Relations: The
International Journal
Vol. 42 No. 2, 2020
pp. 471-491
© Emerald PublishingLimited
0142-5455
DOI 10.1108/ER-06-2019-0250
Received 17 June 2019
Revised 6 October 2019
6 November 2019
Accepted 7 November 2019
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/0142-5455.htm
471
Worker-
supported
collective
bargaining
auto part and component suppliers, mostly Japanese suppliers in South China (Bu, 2010).
This type of “strike-led collective bargaining”or “collective bargaining by riot”(Chan and
Hui, 2014) was regarded as the most “authentic”among different types of bargaining in
China (Lee et al., 2016; Kuruvilla and Zhang, 2016). However, the debate on the effectiveness
of collective bargaining is far from complete.
Most studies blame the unwillingness or incompetence of the actors for the majority of
ineffective collective bargaining contracts. The All-China Federation of Trade Unions
(ACFTU), due to its rol e as a mass organizati on of the Communist Par ty of China
(Chan, 1993; Chang, 2005) and a dependent partner of employers within enterprises
(Clarke et al., 2004), has been unable to bargain effectively. Other studies highlight
central-local differences while also noting some key flaws on the labor side. These studies
often focus on a few sectoral or regional collective contracts that were legally sanctioned
by the 2008 Labor Contract Law. Some of these experiments were pushed by striking
workers and thus became one-off processes to address the strikes, such as those in the
sanitation and construction sectors (Friedman, 2014; Pringle, 2016). More regularly
conducted sectoral bargaining that was organized by or included local trade unions often
began with employers’efforts to unify piece rates but lacked worker input (Liu, 2010;
Wen and Lin, 2015). Importantly, these exceptional cases of sectoral or regional
collective contracts exist largely in clusters of union-free firms, which means that they
are separate from the dominant form of enterprise-level collective bargaining in China by
region or sector.
Post-strike collective bargaining is another type of local initiative that occurs at the
establishment level. Since the 2010 strikes, collective bargaining has not shifted toward the
expected “riot-driven”or “Party-state-led”types (Chan and Hui, 2014), but become a regular
practice in some enterprises. It is hardly news that enterprise unions show some changes
(Chan et al., 2017). However, this is the first time that workers have elected their own
enterprise unions and become highly involved in the unions’bargaining with their
employers (Luo and Yang, 2019). This study further illustrates the labor-capital interactions
in three bargaining cases and addresses a new “puzzle”in which the bargaining outcomes
have varied greatly. Some enterprise unions have achieved workers’goals. At the same
time, in at least one case, unions have been unable to reach a new collective agreement, even
through striking. Simply blaming the actors misses the whole picture.
This paper argues that the industrial structure –that is, the arrangement and
organization of a particular industry –has imposed major constraints on post-strike
collective bargaining within individual enterprises. The prevailing industrial structure in
the global networked economy has been largely neglected in previous research. The most
important type of structure is the supply chain (Gereffi et al., 2005). Different from the
traditional practice of producing everything under one roof, many firms outsource their
manufacturing or service functions to other companies or sectors. Supply chains created
27–30 percent of the total employment between 2004 and 2013, and more than 85 percent –
approximately 330m jobs –were in emerging economies, particularly China (ILO, 2015).
The auto sector is a typical example. Importantly, the Japanese-style organization of auto
supply chains has become a highly imitated model since the 1990s, reaching many sectors
worldwide (Lyer et al., 2009). In South China, the strikes in 2010 spread widely among
Japanese auto suppliers. Collective bargaining occurred during and after the strikes in
these suppliers. The tight connectedness of firms along the supply chain is in stark
contrast to the scattering of their enterprise unions. Several studies have attributed the
success of strikes to workers’strong bargaining power resulting from the factories’
strategic positions in supply chains (Chan and Hui, 2014). However, few studies have
further related these mixed impacts of the industrial structure on workers and their unions
to actual bargaining practices.
472
ER
42,2
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