Aaron Halegua. WSJ. Protecting Workers’ Rights in China

On October 19, 2016 the Wall Street Journal published a Q& A article with USALI Affiliated Scholar Aaron Halegua:

Labor unrest is on the rise in China, fueled by unpaid wages and mass layoffs amid a sputtering economy. Part of the problem, experts say, is the government’s relatively weak enforcement of labor rights and inadequate access to legal services for aggrieved workers.

Aaron Halegua, a practicing lawyer and consultant, has spent more than a decade studying labor issues in China and advising companies, law firms, and nonprofits on such matters. A research fellow at the New York University School of Law, he recently released a report titled “Who Will Represent China’s Workers? Lawyers, Legal Aid, and the Enforcement of Labor Rights.”

In an interview, Mr. Halegua discussed the state of labor relations in China. Edited excerpts below:

WSJ: Your research found that Chinese workers are often unsuccessful in using litigation to resolve labor disputes, and many workers still resort to strikes and protests. What implications could this have for industrial relations as China’s economy continues to slow?

Mr. Halegua: China’s courts are ill equipped to deal with the rise in bankruptcies, plant closures, mass layoffs, or the restructuring of state-owned enterprises. Political solutions to these disputes are often necessary.

The government prioritizes maintaining order and stability, using whatever mix of cash, coercion and other measures is necessary to quell worker unrest. Authorities are quick to intervene in strikes or protests and attempt to mediate a settlement. Where a private employer lacks the money, the government often uses its own funds to pay the workers and resolve the dispute.

Thus far, China has been able to manage labor unrest through this ad hoc strategy. However, this approach is costly for the government and becomes harder to sustain as the number of strikes rises and the government’s own tax revenue falls.

WSJ: In lieu of independent labor unions, China prefers to use mediation and litigation to manage labor disputes. Does the increase in such cases over the past decade reflect improving access to legal recourse, or worsening conditions for Chinese workers?

Mr. Halegua: No single factor can explain this growth. Part of the story is workers’ ever-growing awareness of their rights, thanks to the ubiquity of mobile phones and the government’s own outreach efforts. The virtual elimination of litigation-filing fees also had a big impact.

Another key factor is the economy. Tough times generally produce more disputes–over wage arrears, unpaid social insurance, or severance. Fearing retaliation, many workers won’t bring long-standing claims to court until they are laid off. So these claims also increase when the economy sours.

Read the entire article here.