HR Policy Global’s Chinese Union Webinar Offers Timely Updates and Practical Insights

October 15, 2021

As large Chinese tech companies seek to unionize under regulatory pressure, HR Policy Global held a webinar to consider key questions, including whether Chinese unions will play a more active role in addressing emerging workplace issues, and whether non-unionized companies will find themselves under greater scrutiny.

Jonathan Issacs, Head of China Employment Practice at Baker McKenzie pointed out that Chinese unions are a “different animal” than unions in the U.S., as they are tasked to help “labor harmony” in China instead of organizing labor.  For example: 

  • Chinese unions cover all employees, including managers.  

  • All company unions are part of All China Federation of Trade Union (ACFTU), a government-backed union confederation.  Unionized companies withhold a 2% payroll deduction for union fees – 40% of the deduction goes to ACFTU, and 60% goes to the company union’s account.  

  • Voting is used to elect union leaders, but no elections are held on whether to unionize a workplace.  Worker committees, usually established by companies, submit their applications to local ACFTU chapter to have an internal union.  

  • As opposed to traditional unions, Chinese unions are expected to mitigate any labor strikes instead of representing workers.  

  • The recent move is seen as the newest effort by the Chinese government to encourage large companies to establish internal unions.  

Ellen Wu, Employee and Labor Relations Leader at IBM China, and Thomas Lan, Director of Labor and Employee Relations Asia Pacific at Honeywell, shared their experience on managing union relations in their respective companies.  Mr. Lan emphasized it is important to build and maintain a trusting relationship with local labor authorities and proactively work with them on emerging workplace issues.  Ms. Wu reminded members that the union shouldn’t be a “headache” in China.  If companies follow proper election and management procedures and have the right representatives, a union in China can be an effective channel when consulting with workers.

Other pressing issues in China, such as excessive working hours, sexual harassment, and contingent workers, were also discussed.  Panelists advised companies to set up explicit workplace policies and effective internal mechanisms to address such concerns from employees.