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Wal-Mart in pay deals with Chinese unions

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(By Tom Mitchell for the Financial Times, July 24). Wal-Mart, the US retail giant known for fending off organised labour in its home market, has completed collective bargaining agreements with unions in two Chinese cities.

The agreements reached with government-approved unions in Shenyang and Quanzhou come less than two years after the official All China Federation of Trade Unions (ACFTU) launched a high-profile campaign to organise workers and mark a new chapter in the development of the China’s labour movement.

The agreement in Shenyang locks in an 8 per cent pay rise both this year and next for Wal-Mart employees, a company spokesman and union officials told the Financial Times on Thursday. By comparison the average hourly wage in Wal-Mart’s US stores, which are not unionised, has risen 12 per cent since January 2005, from $9.68 to $10.86. While a comparative figure for Wal-Mart’s China employees is not available, the minimum wage in Shenyang is Rmb700 ($102) a month.

Employees in Quanzhou, who formed the first Wal-Mart union in August 2006, secured a similar increase in an agreement signed on Wednesday. More than 48,500 people work at 105 Wal-Mart stores across China. All have been unionised over the past two years and their representatives are negotiating collective contracts with management.

“Shenyang was the first and Quanzhou was signed [on Wednesday],” Wal-Mart said. “By law [collective bargaining] is required and we respect the law wherever we operate.”

Wal-Mart, the world’s largest retailer, for years successfully resisted the ACFTU’s attempts to unionise its China operations. With that battle finally won by the ACFTU two years ago in Quanzhou, the union’s focus is turning to collective bargaining with management as required by a new Labour Contract Law introduced in January.

Activists view official endorsement of collective bargaining as a step forward in the development of the country’s labour movement. The government still frowns on strikes and the establishment of unions independent of the ACFTU remains illegal.

“Bargaining doesn’t make sense without the right to strike,” says Han Dongfang, Hong Kong-based director of the China Labour Bulletin. “The development of any country’s labour movement never happens all at once. The movement needs to push the legal system to develop.”

Mr Han was jailed and later exiled for his attempts to form an independent union in China during the Tiananmen Square protests of 1989.

Copyright The Financial Times Limited 2008

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