Report on the Labour Dispute between Ole Wolff Yantai and the Labour Union (abridged)
10th September 2008
In mainland China, self-organized grassroots labour unions, catalysed by workers’ resistance, are extremely rare. Fortunately, such a labour union was established at Ole Wolff Electronics China in Yantai city, Shandong Province two years ago. However, it now finds itself pressed between the hammer and the anvil of capital in association with the local government. What is even rarer is that the workplace union then made an appeal to the international trade union movement and got a response. In 2006, several workers complained about their employer -- Ole Wolff Electronics Yantai, a Danish funded company --- to the local Labour Bureau in Yantai municipality, when they could no longer put up with over-exploitation and arbitrary dismissals. Their complaint was followed by strikes and protests. In order to safeguard their legitimate rights, the workers established a labour union. The response of the employer was to dismiss six of the worker’s representatives, all were women. The employer threatened the labour union committee to refrain from strikes and other forms of resistance and ultimately fired the acting chairperson of the labour union, who was a spokesperson for the workers.
Under pressure from the labour union, the local court ruled that it was illegal for the employer to have dismissed the six workers’ representatives. However, the employer refused to comply with the verdict when it received backing from the local Labour Bureau. The local Labour Bureau had sided with the employer throughout the events. As far as the local trade union, the Fushan District ACFTU (All-China Federation of Trade Unions), was concerned, it acknowledged the legal status of the Ole Wolff Yantai Trade Union (abbr. OWYTU) when it was founded, in response to the sympathy with the workers displayed by the National ACFTU, Beijing. However, when this sympathy dwindled, they changed their attitude, siding openly with the management as the situation developed. As a result, OWYTU paid dearly for each tiny advance. Despite many challenges, OWYTU kept on going, committing itself to disclosing the truth to the public by setting up an internet blog(2) , which created significant social influence in Yantai. In May 2008, OWYTU decided to make an appeal to the international trade union movement through the internet. The United Federation of Danish Workers or 3F (Fagligt Fælles Forbund) responded by addressing a letter to Ole Wolff Electronics A/S in Denmark, demanding the employer implement its social responsibility and also to respect the lower level labour union. The events are still in progress.
I. January to June of 2006: Labour disputes start with the launch of Ole Wolff Yantai
Ole Wolff Electronics A/S was founded by Mr. Ole Wolff in 1983 in Denmark, where it is still headquartered. The company grew to become a global organization with a research and development centre in South Korea, branches and sale offices all over the world, and manufacturing bases in Guangdong, Zhejiang, Shandong and other provinces in mainland China. Ole Wolff Yantai Co. Ltd .(3), registered as a Hong Kong funded company, is situated at Yongfuyuan Rd. 551#., Fushan High Science-Technology Park, Yantai city, Shandong province. It mainly focuses on manufacturing cell phone speakers and headphones on a small scale. Presently its workforce has shrunk to less than 100 from its peak of 250.
Liu Meizhen was one of the first women workers recruited by Ole Wolff Yantai in January 2006. The company reported an annual salary for the factory director of RMB 200,000(4) . By contrast, the monthly wage of the average worker was RMB 530 (equal to the local minimum wage). Ole Wolff Yantai announced that they had “paid too much” (at RMB 530 per month) and reduced the monthly wage of Liu Meizhen and her co-workers to RMB 480 per month after they were recruited. The company deducted an additional RMB 30 about ten days later. The company did not honour promises made when workers were recruited, refusing to sign a labour contract with employees, and claiming that the company would decide whether or not to sign labour contracts with employees on the grounds of performance.
The workers had no recourse but to report the misdeeds of their employer to the Labour Bureau in Fushan district, urging the authorities to deal with the disputes. Despite several telephone calls(5) , the officials put off the appeals over and over again. On the 28th of April, Ole Wolff Yantai fired 58 female workers without any reasonable excuses. On the 29th, the concerned workers petitioned the Labour Bureau once again. In the afternoon, the company dismissed ten more women workers without a proper explanation. Through negotiation, Ole Wolff Yantai promised to pay RMB 300 to each worker as compensation money and three months labour insurance as well. Later, the Company went back on its word and, as a compromise, agreed to pay two months labour insurance instead. Facing strong resistance from the workers, at the beginning of June, the company consented to restore the seven dismissed women workers to their posts.
II. July to October of 2006: Struggles to set up a labour union
Learning from the events that had happened in the factory, and aiming to protect their legal rights, the women workers conceived of the idea of organizing their own labour union for addressing the violations committed by the company. In the middle of July, they submitted an application to the employer and the Fushan District ACFTU at the same time. However, the management made many excuses and turned down the workers’ demand. The Fushan ACFTU supported the workers in this instance but it could not change the situation.
On October 8, the angered workers went on strike, with an intensified commitment to the idea of organizing a labour union. The Labour Bureau ignored the petitions of workers at first but showed up in a hurry at the news of the strike.
On the following day, a letter was sent to the management and the Fushan ACFTU signed by 110 workers, requesting, “the setting up of a labour union to efficiently safeguard the legitimate rights of the workers”, in which the workers listed the violations of management, including the failure to issue a labour contract, non-payment of labour insurance, arbitrary dismissal, excessive overtime work, refusing leave requests, being unwilling to provide treatment for victims of occupational hearing damage, poor food and violations of women workers’ rights. In response to workers’ demands, management resolved to fire Liu Meizhen, the workers’ representative, once again. They tried to compel other workers back to work with threats, lies and spreading spiteful rumours about the six workers’ representatives. Although the Fushan ACFTU and the Bureau of Labour intervened in the situation, the management still came up with new ways to delay the process of setting up a labour union.
On October 20, officials from the city and district level ACFTU came to the factory, asking the striking workers to go back to work. In return, they would help workers to set up a labour union. But the striking workers insisted on the founding of the labour union before going back to work. The Vice Dean of the Labour Supervision office of Labour Bureau in Fushan district forbade the six workers’ representative from taking part in the election of the first labour union committee. The striking workers turned him down. However, taking the interests of all the workers into account, the six representatives asked the workers to go back to work and cast a vote for members of the labour union committee. That evening, the Ole Wolff Yantai Trade Union came into being under the auspices of the Yantai and Fushan ACFTU. 116 members elected the first labour union committee and the financial inspection committee. Wang Zhaori was elected as chairperson, Yu Yanli as vice chairperson, and Jiang Qianqiu, as a member of the committee. All are women. Liu Meizhen and the other five workers’ representatives were left outside of the factory gate.
The newly elected leaders of the labour union wished the six representatives to continue leading them on strike until they were restored to their posts. But the six decided to follow the suggestion of the Fushan ACFTU, resorting to industrial arbitration to solve the dispute. Hence, the strike ended, and the workers returned to work. The strike lasted 13 days off and on.
III. October 2006 to October 2007: The labour union strives persistently
The newly born labour union became the focus of hatred from the employer. The company still refused to sign labour contracts with employees, also refusing to pay labour insurance. Therefore, OWYTU, the basic trade union in the enterprise, complained to the local Labour Bureau about the employer. As a counterattack, the company obstructed the activities of the OWYTU committee members. In accordance with relevant provision of the Trade Union Law of the People’s Republic of China, a committee member is entitled to three working days a month in which they can handle routine affairs of the labour union. At first, the company reluctantly complied with the provision above. But, before long, the management of the company illicitly deprived the chairperson of OWYTU of this legal right, instead deducting part of the chairperson’s wage for her supposedly “being absent from work without prior permission”.
The company continued to make things difficult for OWYTU by withholding union dues which the company is supposed to allocate to the union(6) . On February 2 the Chairperson of OWYTU appealed to the people’s court in Fushan district for enforcement of the order of payment. In response to the union’s action the company refunded part of the union dues, but the Fushan ACFTU told the workplace union that since they were not a legal entity the union dues should be kept by its superior, namely the Fushan ACFTU. Later, the company simply stopped allocating union dues to the ACFTU altogether. Therefore, the OWYTU has been starved of funding until now.
In response to the demand from the workers for labour contracts, the company followed a strategy of “divide and conquer,” announcing on February 15, 2007, immediately after the Spring Festival, that the company would no longer provide free meals or dorms for workers who demanded the labour contract and labour insurance, and also cut wages. The company continued recruiting new staff, threatening that the company would fire all old hands on the expiration of their labour contracts when the newly recruited employees were accustomed to their work.
The workers expressed their extreme dissatisfaction with the action of the company. Not receiving a response from the departments of labour supervision to their repeated complaints, the workers went on strike on March 9, demanding that the company extend their current contract for an additional year. After 7 days the workers strike was successful.
The company set up a “removing and cleaning” team in May(7) . Having not been provided with any protective gloves, the hands of the women workers in the team were completely exposed to poisonous benzene-containing industrial materials. Wang Zhaori, chairperson of the labour union, negotiated with the management over the terms of the working conditions, but no progress was made in the negotiation. She admitted that, “I never felt happy since being elected as chairperson of the labour union, and I wept a lot.” Persecuted by her employer, in the end Wang Zhaori could only resign and leave the factory. On June 4, 2007, vice chairperson, Jiang Qianqiu was appointed as acting chairperson of the OWYTU when the chairperson resigned and took charge of the routine activities of the labour union. Before long, the newly appointed acting chairperson experienced a similar situation. Women workers fainted and vomited because the company provided no protection for the “removing and cleaning” team. On June 7, Jiang Qianqiu, accompanied by 6 members of the labour union committee, demanded that their manager provide better working conditions. The foreign manager brutally ordered her to remove and clean spare parts within five minutes. The workers didn’t submit and were all fired by the company. Thus, the company fired Jiang Qianqiu, the acting chairperson of the labour union immediately.
Still, the company reluctantly improved the working conditions of the “removing and cleaning” team after Jiang Qianqiu complained to the Health Office. The labour union led by Jiang Qianqiu devoted itself to guaranteeing the legitimate rights of the workers, which prevented the company from further violating the law with respect to the recruitment and use of the workforce.
On June 19, after Jiang Qianqiu was fired, the members of the labour union committees complained about their employer to Shi Lianqing, the Vice Director of the labour supervision office of the Labour Bureau in Fushan district, accusing the company of retaliating against the labour union. Mr. Shi, the Vice Director, still refused to accept and hear the case. Jiang Qianqiu had no choice but to put the complaint form she had filled out on the table. However, Director Shi replied that, “it’s useless to put the form on my table. I will not accept and hear your case.” In the afternoon, the OWYTU complained to the Labour Supervision Office of Yantai municipality. They were told to report the case to the Petition Handling Office of the Bureau of Labour and Social Security of Fushan district, which Jiang Qianqiu and the committee members then did. The authorities responded by saying, “First, it’s difficult to define “retaliation”. Even if the company retaliated against the labour union, the labour departments don’t know how to handle the case either; Secondly, now that you accused the labour supervision departments of administrative omission, you may go to court.”
Jiang Qianqiu and Zhang Jun were dissatisfied with the reply and resumed their efforts to protect their rights. In the end, they persuaded the labour departments to issue a “Department of Labour Administrative Corrective Order” to Ole Wolff Yantai , in which the labour departments defined Jiang Qianqiu’s activities as justified to protect the workers’ legitimate rights, and ruled that the actions of the company against Jiang Qianqiu were retaliatory in nature. However, the company ignored the order. And the Labour Bureau didn’t take any measures to ensure that the company would follow the “Corrective Oder.” Why did Labour Bureau officials give unprincipled support to Ole Wolff Yantai? For people who are familiar with “China Conditions”, it’s easy to conclude that this is a problem of “local protectionism” — local government officials benefit from private enterprise through the latter’s tax payment, business partnership or outright bribes, and hence tend to collude with each other in defiance of the laws and labour rights. According to unverified information, relatives of officials in the Labour Bureau and Heath Bureau occupied management posts in Ole Wolff Yantai.
On December 24, OWYTU went to court, charging the Labour Bureau in Fushan district with administrative omission. However, the court turned down the appeal, claiming the bill of indictment was poorly drafted.
IV. October 2006 to 2007: Win the lawsuit, but lose the job
In order to keep the new labour union from getting involved in labour disputes in its early stage, the six dismissed women workers decided to appeal through the arbitration process to get their jobs back. A hearing was held by the Labour Dispute Committee in Fushan district on November 15, 2006. On December 18, the committee ruled in favour of the six dismissed workers. One day prior to the date the judgment would become effective, Ole Wolff Yantai went to the People’s Court in Fushan district, appealing to the Labour Dispute Committee to withdraw the judgment. The real intent of the employer was to stall for time because the labour contract of the six dismissed workers would have expired by the time the court could conclude a new verdict. On January 30, the Fushan District Court held a hearing for the first time to hear the case. In August, the court ruled in favour of the six dismissed and said that:
1. The company’s decision to terminate the labour contract with the six should be rejected.
2. The company should pay the six workers 520 yuan for the arbitration fee. The Court costs should also be borne by the company.
The company refused to obey the judgment, appealing to a higher People’s Court. But, on October 22, the Intermediate People's Court in Yantai city rejected the appeal.
Ole Wolff Yantai didn’t allow the six workers to enter the factory, however, and thus the judgment of the Intermediate People’s Court turned into a mere scrap of paper. The women workers stayed unemployed. The case was transferred to the Labour Bureau once again. Although the six workers complained to the Labour Bureau several times, the officials denied them and made various excuses, failing to accept and hear their appeals. The Labour Bureau refused to define the company’s action as retaliatory, claiming that the company had the right to dismiss employees, and even encouraging them to leave with the promise of financial compensation.
The company continues to retaliate against the six workers through withholding their employment files, in addition to refusing to provide the dismissed six official notification of termination of labour contract. The company’s action makes it very difficult for these workers to find new jobs. The workers have approached the company many times to settle the problem but they were just turned away by the company.
V．2008: The Underdog is still Fighting Back
In January 2008, the management tried to oust the OWYTU leadership by organizing a fake union election, although the current term of the leadership was far from expiration. Li Yulan, the manager of human resources, was nominated as a candidate in the election. The company even sent some team leaders to monitor and manipulate the election process. Fortunately, the labour union discovered the plot at the very start, and the conspiracy failed because the workers boycotted it.
Meanwhile, the police or the security agency started investigating the labour union activists. On the evening of January 25, the Fushan ACFTU invited Jiang Qianqiu, the acting chairperson, to attend a meeting in its office. Upon arrival she found that two officials from the municipality were there but they refused to disclose their titles. They kept on questioning her about the background of Zhang Jun, the Labour Union consultant. Jiang suspected that the two persons might be state security people. On February 22, policemen from the township police station then came to the house of Jiang Qianqiu, and this time the target persons were herself and her boyfriend.
The story of OWYTU was reported by the “Yantai Evening News”, “Six o’clock in the Morning”, “Qilu Evening News”, “China Women’s News”, Shandong Radio Station, China Central Radio, Qilu TV Station, CCTV, the official website of the All-China Federation of Trade Unions and other media, which attracted attention from high-level officials including the secretary of the Shandong Provincial ACFTU and the secretary of Communist Party of Yantai Municipality. However, the OWYTU has made little progress in getting back their legitimate rights and the Fushan Labour Bureau and Fushan ACFTU remain indifferent to their situation. The concerned departments told workers that media involvement would do nothing but arouse “the panic of the concerned departments,” warning workers off any media interviews.
The labour union had about 120 members when it came into being. Now its membership has shrunk to 40. The company has improved treatment and working conditions because of the labour union’s struggles. However, according to Zhang Jun, “many newly recruited employees fail to recognize the great efforts the labour union had devoted to the improving the workers’ benefits. Some don’t even understand the role of the labour union.”
Around this time, the OWYTU made an appeal to the Danish trade union movement. 3F, the United Federation of Danish Workers, responded and made contact with its union branch at the headquarters of Ole Wolff Electronics A/S (Denmark). On May 19, 2008, 3F had an interview with Mr. Ole Wolff. Mr. Ole Wolff admitted that he had heard of the events that happened in Yantai but he confessed that he could neither control the factory nor make further reforms. He also informed 3F that Ole Wolff Yantai planned to cut the number of its employees step by step through the subcontracting of new product lines.
On June 23, OWYTU made a statement, pointing out that Mr. Ole Wolff “tried to present himself as entirely outside of the dispute and had nothing to do with the misbehaviour of the Ole Wolff (Yantai) company” and that this was irresponsible and unacceptable. They requested that he publicly condemn what his managers did in Ole Wolff Yantai by publishing a statement and approving the OWYTU demands at once. Mr. Ole Wolff made no response to OWYTU’s statement.
Before long, the 3F decided to step in and urged the Ole Wolff Electronics A/S to negotiate with the workers.
However, Ole Wolff Elektronic A/S completely ignored the demands. As a result, 3F reported the event on its website, which initiated a new stage of international support. On August 28, 2008, Guy Ryder, the General Secretary of the International Trade Unions Confederation, wrote to Ole Wolff to express full support for the OWYTU. This was later followed by LO, The Danish Confederation of Trade Unions. On August 31, the Danish National TV reported on the case and other media followed suit. On September 11, Ole Wolff Yantai finally agreed to meet with OWYTU to discuss the dispute between them. However, the management showed no commitment at all to a genuine negotiation. They refused the six’s demand for reinstatement. As for compensation, they only wanted to pay a little more than three months wages, which was far below the expectation of OWYTU. They also refused to reinstate and compensate Jiang Qianqiu.
On September 12, representatives from four Hong Kong groups launched a protest at the office of Ole Wolff (Asia) Ltd to express solidarity with OWYTU. They were Globalization Monitor, Asia Monitor Resource Centre, the Hong Kong Liaison Office (IHLO) for the International Trade Union Movement, and the Neighborhood and Workers Service Center.
On October 8, Ole Wolff Yantai summoned all its workers and handed them a letter, telling them:
During this period they [OWYTU] have posted messages to the internet to discredit our company. What is more outrageous is that they sent messages to our clients’ websites, which resulted in our clients cutting our order this quarter, along with the loss of opportunity of developing new products. Confronted with such serious loss of businesses, we have to take a series of measures, including cutting expenditure and moving from the present building (4400 sq.m) to a much smaller one (500 sq.m). This implies we have to cut our workforce until only one assembly line is left. The company will ask employees to voluntarily resign, and we will pay them compensation in accordance with the labour laws.
The OWYTU is not going to accept this. The company’s accusation that the OWYTU approached its clients is pure invention as well. It is 3F who contacted Ole Wolff’s clients. The case is still developing.
(1)Wang Jian is correspondent of Globalization Monitor.
(3)It is referred to as “Ole Wolff Yantai” or “the company” in the following paragraphs.
(4) For recruitment information in detail, please go to: http://so.jobmet.com/index.php?query=%B0%C4%C0%FB%CD%FE%B5%E7%D7%D3%D3%D0%CF%DE%B9%AB%CB%BE&kind=1
(5)In accordance with the law, the Bureau of Labour shall end a simple case in 30 days and a complex one in 60 days.
(6)In accordance with Chinese law, the enterprise, public institution or government organ that established a trade union shall allocate 2% of total wages of all of its employees to the trade union each month as a trade union fund.
(7)The removing and cleaning team was in charge of a working procedure in which a worker is asked to a) put the main boards of a cell phone into a container of liquid benzene; b) remove the appointed electric units from the main boards.