China Matters: The Renewed Unionization Campaign in China Coupled with Collective Bargaining
By Lesli Ligorner & Todd Liao
Unionization efforts directed at foreign invested enterprises (FIEs) have increased significantly lately, signaling a resumption of the drive that stalled in 2008 due to the financial crisis. Since May 2010, the All China Federation of Trade Unions (ACFTU), which is controlled by the Chinese government, has issued a series of notices that request the local branches of the ACFTU to increase their pressure on private enterprises and FIEs to establish unions and enter into collective contracts with their employees. These notices manifest the Chinese governments resumption of its unionization campaign with an additional focus on implementing collective bargaining agreements with respect to employee wages. This client alert analyzes the renewed campaign in light of the recent labor unrest in China and the legal and practical implications for multinational corporations operating in China.