New workers’ rights thwarted in China

SHENZHEN, CHINA —  Huang Qingnan had just reached a tiny fast-food stand in a run-down neighborhood here when all of a sudden, two men dressed in dark clothing appeared out of nowhere. They unsheathed watermelon-cutting knives concealed in newspapers and began slashing Huang’s legs and back with the 16-inch blades.

The 34-year-old labor activist shrieked in pain. Witnesses said he turned and lunged toward one attacker, then collapsed.

“Catch them, catch them!” onlookers shouted as the two strangers fled, scurrying off to the end of the block, where they were met by a motorcyclist who spirited them away late one afternoon last month.

Huang, interviewed at a hospital here where he was recovering, said he believed the attack was motivated by his work to publicize China’s new labor contract law.

Starting Jan. 1, workers nationwide will gain new rights, especially when it comes to long-term job security.

Employees with 10 straight years at a company will be entitled to a contract without a fixed end date, essentially giving them lifetime employment. Severance payments will be mandatory for anyone whose contract expires or who leaves after giving 30 days’ notice or is laid off, except in special cases of large-scale layoffs or dismissals due to criminal liabilities or serious violations of company rules.

Here in this southeastern industrial city near Hong Kong, people such as Huang have been reaching out to migrant workers and educating them about their protections under the new law. Although lacking proof, Huang and other labor advocates believe some employers are trying to shut them up.

“The government is not promoting this law, so we need to,” said Li Jinxin, an assistant with a Shenzhen labor law firm who last month was pushed into a van and taken to a remote street where men clubbed him with iron pipes. Sitting in his apartment here last week, his cast-encased leg resting on a red stool, the 29-year-old Li said employers “wish we did not exist.”

Local police and government labor officials declined to comment on the beatings.

Analysts say China’s overhaul of employment rules -- adopted in June after months of hearing opinions from interest groups -- was needed in the face of China’s rampant industrial development on the backs of largely unprotected laborers. Stories abound of workers toiling in inhumane conditions, being summarily fired and struggling for years trying to collect unpaid wages from unscrupulous employers.

“This law is beneficial to the job stability for migrant workers,” said Wang Chunguang, a deputy director in the sociology department at the Chinese Academy of Social Sciences in Beijing. And that, he said, would help narrow the economic and social gap between China’s poor and the rich, its countryside and cities.

“For the entire society’s development, this large mobile population should be stabilized, and the premise of that is stable employment,” he said.

But many employers, including foreign multinational corporations, regard the law as too restrictive, according to consultants and business groups. Some have warned that it would add hefty costs and could hurt China’s competitiveness.

Most provinces in China already require labor contracts between companies and their staff. But contracts are typically for one or two years. Many factories ignore labor pacts, though now they are scrambling to institute written employment contracts because failure to do so under the new law could subject them to doubling a worker’s salary.

Some key details of the law haven’t been spelled out yet. For example, it’s not clear whether a worker with 10 consecutive years at a company will be entitled on Jan. 1 to an open-ended contract or whether years of employment will be calculated starting from the effective date of the law.

Employers aren’t taking any chances, however. Some companies have been firing workers, particularly veteran staff, or pressuring them to sign new contracts, in an apparent effort to circumvent some of the law’s key provisions.

At Kaixing Plastic & Metal Factory in Huizhou, a toy manufacturer just north of Shenzhen, workers said 20 long-serving employees were told last week to sign their first labor contract ever -- which stated a pay rate much lower than they were getting.

These workers said they were reassured that their actual salary wouldn’t change, but they feared that Kaixing Plastic would shortchange them by making severance payments based on the labor contract. Workers at Kaixing also worried that because they had no previous contracts, they may not be able to prove how long they had worked there.

“We have nothing in hand to protect ourselves,” said one employee who gave only his surname, Chen. In the end, he said he had no choice but to sign. “The company told us if we don’t, we can choose to terminate our working relations.”

Representatives at Kaixing, owned by Hong Kong investors, declined to comment.

Experts say few large companies appear to have resorted to such heavy-handed tactics.

Huawei Technologies Co., a telecommunications equipment giant based in Shenzhen, reportedly offered a bonus to employees with at least eight years of service to resign and reapply for their positions, a move largely seen as a way to sidestep its obligations to veteran workers under the new law. Huawei’s products include networking gear, security devices and data storage software.

Huawei representatives declined requests for an interview but said in a statement that some staff had signed new employment contracts as a result of the upcoming law. The company, which has operations in the U.S. and other countries, says it strictly abides by local labor regulations.

Analysts said technology firms may be particularly concerned about being hamstrung by the new law. Facing rapid changes in technology and market forces, these employers insist they need more flexibility to hire and fire swiftly. The new law would allow companies to dismiss workers who are not qualified, but only after having provided additional training or a change in their position.

What about an older worker who has an open-ended contract but is not as quick a learner as he once was? “Under those conditions, it would be hard to let that person go even if they are not up to standard,” said Lesley Li, a consultant for Squire, Sanders & Dempsey, a law firm with offices in Shanghai and Beijing.

Li said many multinational companies were gearing up for the new law by reviewing current labor contracts and updating employee handbooks. The latter are an important basis for outlining circumstances not covered by the law under which employers can legally fire workers, she said.

Wal-Mart sparked a controversy recently when local media reported the company dismissed about 110 purchasing department workers in China. Labor advocates criticized the move as a scheme to preempt limits in the new law. Wal-Mart spokespeople in China declined to comment. Outside Wal-Mart’s headquarters in Shenzhen, purchasing section workers said that some employees were laid off in late October but that the firm has hired workers since then.

“Whether Wal-Mart or Huawei, the largest misunderstanding they have is the belief that this new law increases labor costs,” said Guo Jun, director of the Democratic Management Department at Beijing-based All China Trade Union. Guo said employers would still have a lot of flexibility with part-time staff, and he contended that long-term contracts would ultimately pay off for employers with greater loyalty.

Loyalty doesn’t come easily at factories in Shenzhen, a gritty industrial city that is no stranger to labor struggles, in large part because of its abundance of labor-intensive industries and proximity to more liberal Hong Kong, with its lawyers and activists.

Huang, the labor activist who was stabbed, runs the Dagongzhe Migrant Worker Center, a Hong Kong group-supported counseling program in a poor community in western Shenzhen. The center, with a staff of five, had been operating since 2003 with little incident. But on a Thursday night in October, several people stormed into the garage-sized storefront, smashing the glass door and threatening staff and visitors with steel water pipes. A month later, four men came in broad daylight and destroyed desks, bookcases and other furniture.

A few days later, Huang was attacked. It was the second life-threatening assault on him. In 1999, while he was sleeping in a dorm at a food factory in Shenzhen, someone poured sulfuric acid over him, leaving his face, neck and arms disfigured. The crime was never solved.

“We cannot avoid conflicts doing this kind of work,” Huang said from a Shenzhen hospital bed last week, lying prone on a thin mattress, most of his left leg encased in a cast. Huang said he did not know whether he could continue his work. “I may be disabled,” he said. But Huang remained hopeful about the law.

“It will have a large impact -- to small and big employers -- for the entire country,” he said. With written contracts, “workers will now have some evidence to protect their rights.”

Other labor activists weren’t so sure. The law doesn’t spell out enforcement mechanisms such as spot checks, they said, so it will be mostly up to workers to file complaints to ensure that they get these rights.

“Law is drafted by the highest level of government,” said Li, the labor law assistant who was shoved into a van and beaten. “But enforcement is by the lowest level of government.”

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don.lee@latimes.com