Compare Trade Union of Developed Country Company (MNCs) and Chinese Native Company
Introduction
A trade union, also known as a labor union, is an organization whose membership is made up of workers and union leaders, united for the purpose of protecting and promoting their common interests. A trade union could be one of the following: (1) a company union tasked with representing interests of a single specific company and may be lacking connection with other unions. A company union (also called a house union) is often a generally bogus and illegal union. (2) A trade union may be a general union or industrial union that represents workers drawn from a number of companies but in the same industry. (3) A trade could also be a craft union with the responsibility of representing skilled workers drawn from a specific given field such as welding or carpentry.
Functions of Trade Union
A trade union has principal reasons for its existence which include: negotiating wages and better working condition terms; regulating relations between its members (workers) and their respective employer; taking collective action to enforcing the terms of collective bargaining; raising new demands on behalf of its membership; helping settle members’ grievances. Generally, the aim of trade unions is to improve work conditions and welfare on a global scale. A trade union is able to collect important information from a variety of cases involving working conditions and worker welfare for the benefit of their members. This affords trade unions an advantage resulting from the availability of information along with their greater political impact as a group, which enables them to intervene in political processes to ensure that workers have improved occupational health and safety provisions at the workplace. Trade unions activities have therefore resulted in improved working standards both in developed and industrialized countries and with relatively greater positive impact for the former.
Trade Union in Contemporary Era
A trade union would exist as a social organization in contemporary era because of its association with Social Movement Unionism theory. In this respect, the trade union would be concerned with more than organizing workers on issues relating to the workplace, pay terms and conditions. Social Movement Unionism during contemporary era emerged from political struggles in developing countries, where it was defined as a distinct industrial relations model. Therefore, trade unions and other labor movements would work together to achieve social and economic justice. The union would demand for clauses purposed to further social justice in their collective agreements. The social issues would include fair trade policies, anti-globalization campaigns, anti-poverty initiatives, race, gender and human rights.
Wal-Mart & Foxconn China
Wal-Mart and Foxconn are the two major players in the manufacturing and retailing industry respectively. Wal-Mart is currently the biggest retail store in world with a total store count of more than 8,900 stores worldwide as of February 2011. The company is divided into principal divisions, namely: Wal-Mart stores, supercenters, Sam’s Club, and Wal-Mart International (Rachleff, 2012, 198).
According to 2011 statistics, Foxconn has the second largest labor force in the world after Wal-Mart which boosts of 2.1 million associates globally. The bulk of Foxconn workers are currently employed in China stated to be 1.3 million as of mid-2011. The Trade Union Law in China requires that a trade union ought to be democratically elected by workers themselves. While Foxconn workers are aware of the existence of the Foxconn trade union, they do not have an idea of its formation. The feeling among the workers is that the Foxconn trade union is not there to defend their interests, rather to push the company’s agenda.
Structure of Paper
This paper aims to make detailed comparison between a trade union of a multinational company from a developed country and a Chinese native company. The companies of choice are Wal-mart and Foxconn respectively. The trade unions of the company will be compared on three major aspects: Collective bargaining, Industrial conflict (strike), and Working conditions.
Collective Bargaining at Wal-Mart
In the recent years, Wal-Mart has warmed up to unionization and started signing collective bargaining agreement with trade union for its retail stores. The company insists on its respect for the individual rights of their associates and always encourages them to freely express their idea, concerns as well as comments. The company prides itself on its “Open Door” policy which guarantees employees the freedom to share their concerns and suggestions with Wal-Mart’s management. Since 2002, more and more groups of Wal-Mart drawn from different states have collective agreement because of the company’s understanding of collective action improves the conditions at workplace and lives of their associates. The Wal-Mart trade union helps associates understand their rights and gain a working life characterized with more dignity and respect. In a deal signed with UFCW Canada in 2008, Wal-Mart agreed to give their workers pay raises of between 35 annd 50 percent along with more vacation. Since then, Wal-Mart has strived to enter into collective bargaining contracts with majority of its employees. In China, for instance, Wal-Mart signed its maiden agreement in Shenyang leading to an 8% pay rise for all the workers.
Wal-Mart has a number of advocacy objectives in relation to unionization and the aspect of collective bargaining. These include adopting the ILO core labor standards, which essentially include right to collective bargaining together with the freedom of association. Further, the company strives to train their employees and management relating to labor practices as well as local, state, and federal regulations meant to create a neutral space for associates to decide whether to join or form a union. In the same light, Wal-Mart has committed to address the issues relating to promotion disparity on the basis of gender and diversity within its management ranks. To this regard, the company used a variety of engagement tools with its associates such as allowing direct consultation with the executive management, engaging in multi-stakeholder dialogue and sign-on letters on particular objectives.
Collective Bargaining at Foxconn
In February 2012, the Fair Labor Association (FLA) conducted a special investigation into the working conditions and worker rights at Foxconn. Workers at the factory gave their opinions regarding elements of job satisfaction such as wages and benefits; working hours; health and safety; physical impact of working at the factory; perception of work performance; professional development & advancement opportunities; and working environment along with the general atmosphere within the factory.
As in most Chinese companies, results of the study revealed that the labor process at Foxconn is organized by the management through a centralized, hierarchical system targeted to achieve utmost productivity. The Foxconn trade union is made up by appointed managerial personnel, not elected democratically (Jeffries, 2009, 700). Workers at Foxconn work hard to generate huge revenues for the country. For instance, at the Zhengzhou plant alone, the production capacity for iPhone reached 100,000 per day. Nonetheless, Foxconn is a great defaulter of labor laws and the code of conduct. This is especially true because Foxconn’s trade union has a militaristic culture characterized by military-like training especially for new workers. In this respect, workers are bound by the mandatory organizational ethos that demands for absolute obedience (Su, 2010, 350). It was also revealed that workers at the company worked beyond legal and code limits of hours of work, overtime was being recorded and paid incorrectly, interns were allowed to work overtime in default of Chinese regulations along working seven days consistently without rest during peak periods. Although there exists a trade union at Foxconn with a collective bargaining agreement, it falls way below both international and national standards. The Trade Union Law of the People’s Republic of China stipulates that locals unions must organize and hold workers’ congress meetings or assembly and supervise the implementation of all resolutions adopted; conduct collective bargaining; supervise the operation of collective contracts; represent trade union members in negotiations with the employer on all matters relating to interests of workers; and aid in mediation and labor disputes arising. The Foxconn trade union occasionally publishes booklets communicating its role and activities but the efforts have fallen short of raising workers participation rates or awareness and a significant number of workers remain unaware of activities of the union or the very existence of a collective bargaining agreement. As such, there is greater need for the Foxconn trade union to adopt new systems for holding proper elections and enhancing worker participation in union structures.
In recent days, Foxconn has worked to better the state of collective bargaining in its union. The company has agreed to cut the hours of work from 60 per week to Chinese legal limits of 49 hours per week. Foxconn has also taken action to ensure elections and activities are free of management interference and they conform to the provisions of the Trade Union Law.
Working Conditions at Wal-Mart
Compared to Foxconn, Wal-Mart has better working conditions and offers sufficient motivation and passion to employees. Wal-Mart was the first company to introduce a profit-sharing plan, where employees were allowed to have a share of the company’s profits. Wal-Mart demonstrates its respect for its workers and encourage their efforts by offering the associates stock options together with store discounts. The employees are treated as partners and the Wal-Mart management behaves like a servant leader in a partnership. Besides money and ownership incentives, Wal-Mart has set high goals that encourage positive competition among their employees. The company creates bets and challenges for the workforce to meet, and in turn offer incredible payoffs for the victors. Further, the company practices “cross-pollination” whereby managers drawn from different departments often switch jobs so as to stay challenged. In addition, Wal-Mart maintains a clear flow of communication with their workers which demonstrates the high trust and regard the company has for them. All these efforts have contributed to having highly motivated and loyal employees at the company resulting in good working conditions.
Wal-Mart’s wages are generally at par with the current local market in retail labor. The company also offers more extensive training, automation, and supervision that affords opportunity to many workers with little or skills or experience. In addition, Wal-Mart offers full-time benefits to employees who work for as little as 34 hours per work and does not limit them to just 34 hours per week. In line with Wal-Mart Wage and Hour Settlement, the company effectively controls its labor costs through such means as discouraging overtime for their workers. In the same vein, Wal-Mart is the largest private employer of households enrolled in the federal subsidized healthcare system PeachCare and Medicaid. Though Wal-Mart’s policy of locking its nighttime employees in the factory has been widely criticized as compromising various employee emergencies and weather conditions, the policy serves to protect the workers and the merchandise in high-crime regions. Contrary to popular opinion, fire officials have attested that there were instances where fire exits were blocked or the employee blocked from escape. All Wal-Mart stores ensure that the door keys are always available on site for the employees.
Working Conditions at Foxconn
In the effort to secure international supply contracts and remain competitive, Foxconn has adopted a strategy to significantly minimize its costs. In turn, incredible pressure has been put on the company’s frontline workers to deliver. Accordingly, overtime is major concern for workers at Foxconn – they are forced to avoid low profit margins by working over 12 hours a shift for 6-7 days a week (CECC, 2011, 69). The factory has a 174-hour regular shift per month, but most workers are forced to work monthly overtime of 50-80 hours (Su, 2010, 355). This contravenes the 36-hour legal limit for overtime in international labor laws, which the trade union should work to enforce to the letter.
More often, Foxconn workers have limited meal-time because they spend a great amount of time in meeting the tight shipment requirements of the company. Failure to meet the high production target automatically translates in skipping dinner or working on unpaid overtime shifts. Some workers are occasionally made to stay 20-30 minutes extra on the production lines until they meet the production targets, yet there is no compensation for the extra time worked. In other instances, workers are forced to attend unpaid work meetings after work shifts which last between 5 and 30 minutes. Frontline supervisors are required to remain at the factory for a least an hour every day with no compensation.
Similarly, the factory working environment at Airport Zone is nothing close to desirable. The area is so dusty that workers often develop ailments. The state of basic amenities at the factory is also wanting with shortages of clean water for the workers besides poor quality food. The area is also highly prone to floods during rainy days, something that cause great amount of inconvenience for the workforce (Perrett Et al, 2012, 659).
Work safety is also a major concern for workers at the company. Foxconn workers are prone to potential harm resulting from occupational diseases in the various departments of the company. For instance, an explosion at Chengdu plant resulted in death of 3 workers and 15 injuries, while there was a case of massive poisoning at the Wintek factory located in Suzhou in 2009. Typically, it is much easier to identify a Foxconn worker from the metal processing department because of their easily identifiable stains on clothes and shoes. Some workers have been forced to resort to ethanol and n-heptane to clean the components. The top floor of the Economic Development Zone is uncomfortably hot and ventilation is wanting. The shop floor has a distinct smell of chemical applied in machines during production. The irritating smell has led to skin allergies among most of the workers there.
In view of the above, it is evident that the Foxconn trade union has a failed in safeguarding the right of workers to safety at workplace. The Law of the Prevention and Treatment of Occupational Diseases demands employers to ensure utmost work safety in the workplace. Article 20 requires that the workplace should have sufficient protective measures, both on equipment and in facilities, fore workers against all occupational diseases. Article 26 provides for clear indication of potential harm of chemicals in use, while Article 31 calls for pre-post and on-post occupational health training for workers.
Industrial Conflicts (Strikes) at Wal-Mart
Wal-Mart responds to industrial conflicts in a sensitive way. For instance when labor unions launched at Wal-Mart websites such as Wake Up Wal-Mart and Walmart Watch in 2005 following workers’ strike, the company responded adequately by launching Working Families for Wal-Mart as a counter mechanism to criticism levied against it. Furthermore, Wal-Mart established a public relations campaign via its public relations website and a number of television commercials. The company also used Edelman public relations firm to interact with press and make responses to negative media reports. It has also engaged in direct interaction with bloggers through news, suggestion of topics for postings, and occasional invitation to the Wal-Mart corporate headquarters to access the conditions at the company.
Industrial Conflicts (Strikes) at Foxconn China
Strikes and spontaneous collective actions which often involve a hundred to a thousand workers are synonymous with Foxconn workers. This are more pronounce in areas of Shenzhen, Chengdu and Fushan. The workers often push for increase in their wages, overtime compensations together with constant provision of hot water during winter time. The basic salary for workers for Foxconn factories is a CNY 1350, from which about CNY 150 accommodation fee and CNY 200-300 food fees are deducted automatically.
The problem of wages has it roots in the company’s unethical practice to place false statements in their job advertisements where salaries are indicated to be in excess of CNY 2500 per month are promised (Hermanson, 2010, 421). In addition, Foxconn has a tendency to withhold workers’ wages especially in the lead up to Lunar New Year so as to ensure stability of workforce and save much time in training new workers. Withholding wages and salaries is against the law and the trade union is insufficient in enforcing it.
Furthermore, there is the constant problem of miscalculation of wages at Foxconn. More often than not, the overtime hours of many workers is usually less than their actual hours they worked, besides additional absence days even when they were present at work. There is a problem in this in the sense that Foxconn often comes to a conclusion that a worker has left the factory voluntarily if the calculations of days absent amount to 3days (Han, 2010, 70).
Worker protests are also common in front of the canteen against the poor quality food offered by the company. The large percent of Foxconn workers who are migrants in their late teens to 20s have high levels of anxiety, making them to often resort to desperate measures such as suicide. In May 2010, striking Foxconn workers were made to sign a document in which they pledged not to commit suicide. This followed the expose by the Students & Scholars Against Corporate Misbehavior (SACOM), which showed the deplorable working conditions at the Foxconn factory in Chengdu (Hermanson, 2010, 422).
In the wake of the spate of suicides, Foxconn introduced a hotline to address grievances of workers. However, the hotline is less effective and those who lodge complaints against the management are threatened (MacEwan & Miller, 2011, 156).
The manner in which Foxconn responds to industrial action/strikes of workers is against trade unionism. More often those who participate in strikes are dismissed without their dues.
Conclusion
To this end, it is obvious that Foxconn’s trade union is highly inactive compared to Wal-Mart’s. It does not serve the interests of the workers, making them to feel no connection and lacking confidence in it. As such, the Foxconn trade union is in urgent need of significant structural reforms to be execute its rightful role of : agitating for a decent living wage for all Foxconn workers; reforming management methodology at the company; making sure workers are not subjected to standing operation and get recess and regular meal breaks; ensure regular adequate training, protection, and health inspections of all Foxconn workers; enabling workers’ say in the formation of the trade union itself; and pushing for additional compensations following violations of workers’ rights by the company (Han, 2010, 68). These structural reforms at Foxconn will result in improved labor conditions at the company besides serving as an impetus desirable trade unionism across the electronics industry owing to the influential stature of Foxconn as the world’s leading manufacturer.
On the part of Wal-Mart, the violation of worker’s rights contradicts its core value – “respect for the individual”. There is need for Wal-Mart to embrace trade unionism so that it plays according to international labor laws. Worker’s required to be allowed freedom of association and expression (Perrett et al, 2012, 649). The company ought to exceed the internal law requirements by ceasing all tactics that undercut workers’ rights to trade unions . External union organizers need to allowed to assess the conditions of workers in Wal-Marts’ stores. Finally, the company should commit to using only temporary replacement workers when theirs associates are on an economic strikes and engage with workers through company-wide communication channels (Human Rights Watch, 2007, 12).
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