Strengths and Weaknesses Employment Relations in China

Question: Discuss about the Strengths and Weaknesses for Employment Relations in China. Answer: Introduction The employment relations in each and every country are monitored and reviewed by the legal framework developed by the state government. Employment relations are described as the legal link existing between employers and employees for exchange of performing services by an employee in return of compensation provided by the employers. The role of government on industrial relations is very important as it determines the legal obligations of both the employer and employees on each other. The existence of legal laws and regulations developed by state plays a critical role in promoting good employment relations by providing equal degree of control to both the parties in context (Blyton et al., 2008). In this regard, the present paper assesses the strengths and the weaknesses of the role that the state plays in the system of employment relations in China. Assessment of strengths and weaknesses of the role that the state plays in the system of employment relations in China General Assessment of Role of State in Employment Relations Employment relations are not only limited to the employer-employee relations but also includes industry context which provides framework for governing these relations. Employment relations generally exist at individual as well as at collective level. Individual level includes the relationship existing between employer and employees while at collective level it refers to the relationship existing between association of employer and employees such as trade unions (Dzimbiri, 2008).The role of state and central government is very important in regulating employer-employee relations at collective level for ensuring protection of interests of both the parties. Thus, it can be said that there are three major parties involved in employment relations that are, employer, employees and government. The state and central government holds the responsibility of regulating employer-employee relations through development of legal laws and regulations for monitoring the working conditions in industrial sector (Blyton et al., 2008). Also, the state also established labor courts, tribunals and other regulatory bodies for resolving conflicts arising between employer-employees in any context. The state government also plays a major role in promoting collective bargaining to protect the exploitation of workers by employers (Dzimbiri, 2008). Collective bargaining can be described as a process of carrying out negotiation between employees and employers association for determining the employment terms and conditions such as remuneration, working hours, benefits, health and safety. Collective bargaining process has played a significant role in promoting fair employment relations and improving working conditions (Bendix, 2001). The state government holds the authority to take decisions in the matters involved in disputes related to wages and working conditions that is to should be abided by both employers and employees. The state government is actively involved in introducing major steps for promoting growth of trade uni ons in developing and underdeveloped economies of the world. In addition to this, it also takes voluntary initiatives such as establishing codes of conduct and discipline for industries to achieve industrial peace and harmony. The government holds all the legal power to impose decisions in the event of strikes and lockout for overcoming industrial unrest (Dzimbiri, 2008). Labor Market in China The introduction of economic reform in China has opened up its economy to outside world, which is facilitating the economic activities between domestic community and other countries. This has caused major changes in the employment relations in the country over the past few years (Wu, 2006). There have been large scale establishments of non-public entities in the country causing large scale increase in the number of employees. The state enterprises in the country were largely restructured for enhancing the volume of productivity (Rush, 2011). This leads to a significant increase in the number of employee responsible for the occurrence of industrial disputes in the country. The reforms in China have facilitated rapid development of industries caused by the large scale migration of workers from rural to urban areas in search of employment. The unlimited supply of labor in Chinese market is responsible for creating an imbalance between supply and demand factors of labor. The growing inte nsity of labor in Chinese market has caused the occurrence of several conflicts between employer and employees. Industrial conflicts have evolved as a major prominent issue in the countrys market with the fraction of disputes increasing in number dramatically (China: from surplus labor and unemployment risk, to labor shortages in a decade, 2015). The nature of industrial disputes relating to employment relations is collective in nature. The major causes of industrial disputes in Chinas labor market are compensation, economic remedies, labor insurance and welfare programs. The percentage of industrial disputes in Chinas market is increasing at a rapid rate for example, there were approximately about 515,000 workers involved in collective disputes in the year 2003 that represents about 61.6% of the total industrial disputes. The nature of employment disputes being collective in nature is complex in nature and thus their resolution poses difficulty for the management and government in China. There is relative increase in the mass protest and campaigns in the country indicating workers dissatisfaction about their working conditions (Lee and Warner, 2006). The major example of industrial disputes occurred in China on account of employment relations are of Hondas strikes in the year 2010. The main cause for the occurrence of strike in the company was relating to compensation conditions of employees. Thus, the increasing number of industrial disputes in the country has laid to the necessity of introducing sound HRM practices in the management practices of companies in the country. The role of state has become very crucial in China for overcoming the increasing rate of industrial disputes in the country through enforcement of mandatory laws and regulations to be followed by the industries in the country (Chan and Hui, 2012). Laws and Regulations in China China mainly adopts and follows a centralized system of government. Thus, state governance occupies the main role in Chinese market for developing policies relating to promoting welfare of its citizens. Chinese Communist Party has established Peoples Republic of China (PRC) in the year 1949 for implementing an institutional framework for governing employment relations. The Labor law was passed by PRC government in the year 1994 for promoting employees welfare. The law mainly emphasized on protecting the legal rights of employees and for overcoming conflicts arising between employer and employees (Xie, 2015). The institutions covered under the law include state-owned and private enterprises, government agencies and the individual economic organization. The law provides employees the authority to form trade unions for representing their interests and opinions in front of the management. The trade union developed will function independently in order to protect the legal rights of employ ees (Brown, 2010). Labor law mainly covers the issues related to labor contacts, collective agreements, work hours, leaves, compensation, safety and health, child work protection, social insurance and benefits. In addition to this, Trade Union Law has been passed by PRC government in 2001 for resolving the conflicts arising between employer and employees for promoting harmonious industrial relations (Cooney et al., 2013). The main objective behind the development of trade union law was to provide assistance to institutions in the event of any conflicting situation for restoring work and order. There has also been the development of Employees Assembly in China that is mainly seen as a democratic management system adopted at enterprise level for monitoring the daily work activities of organizations. Employees Assembly holds the responsibility of increasing the trade union power in the decision-making process of enterprises. Employees Assembly functions under the control of Communist party and enforces th e policies and principles of State party at the enterprise level. Employment Promotion law in China is mainly developed for promoting positive interaction between employer and employees and reducing inequality in employment relations. It grants protection to the employees against any form of discrimination based on the factors such as ethnicity, race, gender, religions or any other such factor. It ensures providing equal employment options to the workers by offering employment in accordance with their duties (Shen, 2007). Role of State in Employment Relations in China Employment relations system in China is mainly governed and regulated by the state governance. It is a labor administration system dominated mainly by the state government. The state government regulates and monitors the employment relations through the implementation of a collective consultation system (Dzimbiri, 2008).The increasing rate of industrial conflicts in Chinese economy has led to the establishment of a collective contract system for managing labor relations through carrying out negotiations between employer and employees. The general conditions of employment in China are manly governed by national laws and are implemented in accordance with provincial and municipal regulations. The development of Trade Union Law has caused the establishment of collective contract system as a measure of adopting a legal framework for monitoring employment relations in China (Lee, 2006). ACFTU, that is All China Federation of Trade Unions, has emphasized on the adoption and implementation of a collective contract system as a critical means for regulating labor relations in the changing economic context of the country. The state government has enforced enterprises to sign collective contracts for enhancing the power of trade unions in regulating employment relations (Shen, 2007).Trade union plays a major role in protecting the rights and interests of employees and resolving the industrial conflicts arising on the basis of wages and working conditions. The state has directed ACFTU the responsibility of promoting reforms in employment relation system in China in order to promote industrial peace. The economic reforms brought in the China have led to a sudden increase in the number of industrial disputes . In this context, ACFTU holds the responsibility of ensuring good relations between management, state and the trade union. The state government plays a critical role in initiating the system of collective consultation and its implementation at the enterprise level is mainly under the control of trade union. The process of collective consultation adopted by the enterprises in China can be stated as a method of referring the proposals recommended by the management and trade union to all the levels of an enterprise and reporting the feedback gained to the trade union for consideration purpose (Guo, 2012). The development of collective consultation system has provided a full authority to state government for monitoring and reviewing the employment relations in China through controlling trade union activities. Collective contract process provides state government the power to initiate and intervene in the negotiations carried out between employer and employees in the situations of the occurrence of industrial disputes. The state can enforce necessary laws and regulations on enterprises through collective consultation system for regulating employment relations system (Cooke, 2005). The employment relations in China are mainly under the control of state but provide a great degree of diversity depending on the type of ownership in enterprises. The trade unions does not occupy freedom of implementing reforms in the employment relations but in context are regulated by the party organizations at the state level. Thus, it can be said that state occupies a major position in regulation of employ er-employee relations in China. Strengths The increasing conflicts between trade unions and employers have prompted the development of a collective consultation system in China. The introduction and development of collective consultation system has enabled the state to develop harmonious labor relations with the employees. Collective consultation system is implemented by the state in the enterprises of the country for reconciling conflicting interests (Liu and Smith, 2016). This system has caused the introduction of employment contracts in the enterprises for providing job protection to the employees. It has facilitated the development of a democratic management system in industries for protecting the interests and rights of workers. The direct control of state party on the enterprises acts as a critical tool in resisting the employers from indulging in any type of unethical practices against the employees (Stembridge and Fisac, 2004). The workers hold the authority of representing their common interest and opinions in front of the employers through the help of trade unions. The representative of trade union holds the responsibility of carrying out negotiations from the employer for securing the welfare of employees (Guo, 2012). Trade unions have secured various benefits of employees in China such as higher compensation, improved working conditions and granting employees job protection from arbitrary action by employers. Trade union keeps a direct control on the practices and procedures adopted by the employers to protect the discrimination of employees on the basis of caste, race, religion etc. Trade unions in China also play a vital role in the development of labor laws and regulations for ensuring protection of employees. The Labor Contract Law in China was developed from the support of trade unions that are directly under the control of state governance. The labor law of the country provides authority to the em ployees to develop their trade union for representing the problems and issues faced by them (Brown, 2010). Weaknesses The employment relation system in China is directly under the control of state bodies. Collective consultation system introduced in enterprises by state bodies to ensure protection of workers but neither the management and nor the trade union can act independently under this system. Trade unions act under the guiding principles of local government and party authorities. ACFTU holds the monopoly of organizing trade unions at the enterprise level and employees does not have any authority to form their independent trade unions (Shen, 2007). Thus, the dominance of state over trade union system makes collective consultation system rather ineffective to represent the common interest and opinions of employees. There is lack of employees participation system in the development of trade unions that is strictly supervised by state bodies. The employment relations system in China lacks the presence of a labor protection policy that is responsible for the increasing conflicts occurring between e mployers and employees. The absence of such a policy has resulted in the occurrence of issues such as low wages and improper work environment in the enterprises of China (Chan and Hui, 2012). The increasing interference of party-state in the trade unions development is responsible for inculcating beliefs in workers that such unions are only a administrative authority of state governance. It does not play any role in defending and protecting employees interest and welfare. Trade unions have to first in place complies with the obligations of state, enterprises and at last of the workers (Leung, 2012). The representatives of trade unions are appointed by the party and thus take actions that are in the interest of state and not of the union members. The process of collective barging followed by the enterprises in China under the collective consultation system is largely different from that adopted by the other developed countries. The negotiations carried out under collective barging are not a voluntary process between management and labor but is completely guided by the state government. Such a process undertaken is not able to represent the rights and interests of employees before the management appropriately thus leading to the occurrence of large number of industrial conflicts in China (Chinas labour dispute resolution system, 2011). State-owned enterprises are relatively incapable of resolving labor relations problems in the country and this is responsible for employees dissatisfaction. The types of conflicts such as protest, rally and campaigns are common in China due to divergence of interests between management and labor party and ineffectiveness of trade unions to resolve them (Guo, 2012). The judicial system of the country does not take any legal actions towards resolving industrial conflicts due to state-owned nature of the enterprises. This is responsible for the disruptive actions taken by the employees such as united strikes for drawing attention towards their problems and issues. The absence of employees participation in the decision-making process of the management is causing the occurrence of problems such as industrial riots in the country (Cooney et al., 2013). As such, there is a strict requirement of implementing a participation mechanism for the employees through which they can easily share the problems and issues faced by them at the workplaces (Chinas labour dispute resolution system, 2011). Employee Assembly is also under the direct control of state and thus restrains workers from voicing their opinion through employee assembly. The central government in China should take effective steps for overcoming the increasing issues of industrial conflicts occurring due to state-owned nature of enterprises (Shen, 2007). The development of new labor policies is essential in Chinese economy to support its ongoing growth and development under the new market reforms. The set of new laws and legislations should incorporate developments such as individual labor contract, market-based wage system and labor protection policies (Leung, 2012). Thus, the increasing control of state governance of employment relations in China is responsible for the widespread industrial conflicts occurring in the country. Conclusion Thus, it can be summarized from the overall discussion that employment relations in China is completely dominated and controlled by state bodies. This is done through the development of trade unions at the enterprises level that are directly under the control of state governance. The major strength of such a system is keeping a check on the business practices and procedures so that employers are not able to engage in any type of corruptive practices against the employees. However, there are various weaknesses in the system of state dominance on the enterprise level for managing employment relations. Employment relations system in China need to implement major changes in its structuring for overcoming the problems arising due to state dominance in the system. There should be increased participation from the employees for reducing the dominance of state on taking decisions during collective bargaining process. The dominance of state should be reduced for fair providing equal barging po wer to the employees and to avoid the occurrence of industrial conflicts in China. References Bendix, S. (2001). Industrial Relations in South Africa. Juta and Company Ltd. Blyton, P. et al. (2008). The SAGE Handbook of Industrial Relations. SAGE. Brown, R. C. (2010). Understanding Labor and Employment Law in China. Cambridge University Press. Chan, C. and Hui, E. (2012). The Dynamics and Dilemma of Workplace Trade Union Reform in China: The Case of the Honda Workers Strike. Journal of Industrial Relations 54(5), 653668. 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