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How Chinese Companies Deal with Labor Strikes and Unions in Kenya

The following article was written by Tang Yuchen, a youth fellow at China House Kenya in Nairobi
“There were hundreds of thousands of people, like a black storm sweeping across the field. Tires were burned, stones were thrown everywhere as if it was a war movie”, Mr. Lu painfully recalled his first labor strike experience, “When someone threw stone at you, you could never know who that was because there were too many people. Even the police could not arrest them all in.” Mr. Lu has been working in one of the biggest Chinese central enterprises for 8 years, and labor strike has been a nightmare for him and his colleagues.
Nowadays, China has become Africa’s largest trade partner and has greatly expanded its economic ties to the continent. According to Ministry of Commerce People’s Republic of China, in 2015, China’s foreign direct investment totaled $66.4 billion across Africa. But its growing activities have raised controversies in the global society, especially in labor relation.
Mr. Eric, the labor officer on duty this week, provided explanation for comparatively more labor disputes associated with Chinese companies. Language is considered as the leading factor. “There are language barriers for Chinese enterprises, both with labor office and employees,” Mr. Eric said.
The miscommunication contributes into information asymmetry. When employees comprehend the order incorrectly and do wrong things, they will receive dismissal from the employer. As friction between employees and employers accumulates, labor strikes occur. When labor union looks for negotiation with Chinese employers, they either refuse or can’t communicate, forcing Ministry of Labor to adopt legal procedures by taking them to the court.
Unfamiliarity to employment system increases labor disputes as well. When Chinese come, they are unfamiliar to the law and always attempt to deal with issues by simply finding a lawyer. The problem is that they cannot even find a right lawyer. “How can you expect a criminal lawyer to deal with labor issue?” Labor officer Mr. Antony said, “Only when labor strike starts did the lawyer concede that he didn’t know anything about labor law.”
Labor unions are among the biggest headaches for Chinese companies.
Labor union is a channel for workers to reach employers in the purpose of dealing with labor issues. Kenya Building Construction, Timber and Furniture Industries Employees Union, which has connection to approximately ten Chinese construction companies like CRBC, Catic, CCCC, recruits 51% of workers from one company in order to let it sign recognition. Then they start negotiating about the collective bargaining agreement, which involves all sections of labor issues that both parties are binding to. For maintaining the membership, each worker is charged by 2.5% of his or her wages monthly.
When asked about cases of Chinese companies, a labor union officer complained, “Chinese companies are hard to reach because they always try to confuse the meeting by pretending that they don’t understand English.” When it is difficult to negotiate with the company, labor union initiates labor strike because it has much stronger influence than individual or small groups of workers. Therefore, in most cases, the frequency of labor strikes is positively correlated with the involvement of labor unions.
While labor union struggles in negotiating with Chinese companies, Chinese companies are also having a tough time addressing labor strikes and pressure from labor union. One interesting phenomenon is that even though there are more legal loopholes within the operation of private enterprises, labor issues are reported less.
According to the speculation from some Chinese employers we’ve interviewed, labor unions, as private organizations, also operate based on economic incentives. For Chinese private companies, they tend to have fewer workers, indicating fewer economic reward from membership fee. They can also retreat easily thus not being suitable for a long-term target. On the contrary, state-owned enterprises and central enterprises employ more workers and have more stable projects, therefore struggling more with labor unions.
“At the beginning, we did wrong because our wages were actually low and did not follow the labor law, thus we stepped back and raised their wages. After that, workers started to feel that labor union is indeed something that can bring them benefits, so more and more workers started to join and listen to the labor union. We cannot even continue our operation”, said by Mr. Ivan, the project director from one Chinese state-owned company, “Labor union is like a cult, which gives workers benefit at the beginning to recruit and control them.”
Despite of all types of troubles from labor strike and labor union, Chinese industries adapted quickly and reduced their labor issues significantly. When they have more experience with labor union and labor law, they are able to respond quickly and precisely. Some of the enterprises negotiated with labor union to use three warning letters, meaning that as long as an employee receives three warning letters, he or she can be summarily dismissed without early notice or compensation. “We always distribute two letters to every worker, so that we can fire him or her at any time”, the executive director from one of the biggest ongoing construction projects said, “but this is not discrimination, but a use of law to protect company just like workers using law to protect their own rights.”
Some of companies also concentrate on the selection of workers. “Many workers have either seen or participated in labor strike. Even though they might not be the leaders, as long as they have seen the situation, they became experienced in labor strike and knew what they should ask for. These type of workers became to be seditious. Other workers might come from companies that give high wages, they become dissatisfied about the wages we provide, even though our wages are not so low compared to other Chinese companies.” By distributing questionnaire for workers to fill in during the recruitment process, companies give workers background checks and filter out some potential troublemakers.
Companies target at labor union as well. “We know workers start strike because of the incitation from labor union, therefore we reach oral agreement with workers to make sure that as long as they join labor union, they are going to be fired. We know it is illegal to do that, but we still reach oral agreement with workers”, as one Chinese manager exposed to us. Since there is competition between all types labor union for gaining more membership fee, each of them will try to intervene as long as there are workers that are from the occupation. This always complicates the situation and makes it harder for Chinese industries to operate properly. “We talked to our own union and even paid them, using them as a way to prevent other labor unions from coming in”, Ms. Ying, human resource manager in one state-owned company, leaked the information to us, “Sometimes if we had a good relationship with labor union that is in charge of our own area, they can help us deal with some problems because they are ones which are trusted by workers.”
Except for dealing with issues internally, Chinese companies search help from outside as well. “Even though they cannot catch the one who threw stones, they can still add pressure to the labor force”, said by Mr. Wu, a project director in one state-owned company. When there are hundreds of workers flowing into the place, Chinese companies need more security forces to protect themselves. Some of them even have three checkpoints. “We will pay police officers to ask for special protection”, Mr. Han, the executive director from one central enterprise exposed, “so that all Chinese can retreat and let police manage the situation when labor strike occurs.”
Be sure, there are problems everywhere: “Labor union failed us”, “Labor union intentionally makes troubles”, “Chinese companies never cooperate”. But at least the official from labor union gave us a bright outlook, “when there are complaints, there are opportunities for development because people are changing.”

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