Wal-Mart forced to recognise a second trade union in China

Wal-Mart has been forced to recognise a second trade union in China in a week.

The supermarket giant is notoriously hostile towards union representation in its stores but has given in to pressure in the Chinese city of Shenzhen after 42 employees voted to form a union and chose its leaders.

The move comes just a week after staff at an outlet in Quanzhou formed Wal-Mart’s first Chinese union after pressure from the All-China Federation of Trade Unions (ACFTU) – the Chinese equivalent of the TUC.

Guo Wencai, director of ACFTU, said they would push for all 60 Wal-Mart stores in China to gain union recognition.

Although Chinese trade unions have none of the teeth of their British counterparts, China is in the process of radically overhauling its labour laws to give greater rights to workers.

A new labour contract law will soon usher in a new era of employment rights in the former hardline Communist state, but has been delayed until now due to questions over whether it goes too far.

It will impact companies around the world that have taken advantage of low levels of business regulation to move into China.

Under current law, employers can withhold wages, terminate contracts without notice and refuse to renew contracts. The new law sets down rules detailing formalities for labour contracts, managing terms and conditions and the payment of wages.

It will also create a system of inspection and supervision of working conditions, and employers will be required to negotiate an agreement with unions if they plan to lay off more than 50 workers. The law is expected to come into full effect in March 2007.

The legislation marks the first time the legislative process has been open to consultation from trade unions and business.

Rui Li Xin, deputy director of the Legal Affairs Department at the Chinese Ministry of Labour and Social Security, said that as China’s market economy develops, “the protection for employees will be our unswerving position no matter what kind of social system we are in”.

“People are the basis for production – without appropriate emphasis on people, there is no production,” he told the first-ever public discussion of the new laws at the London Business School.