Follow up report - Labour dispute in Jiapan Oil Seal Products Factory in January

Industry upgrading in Greater Bay Area caused labour disputes Shenzhen workers’ collective actions suppressed

Editor: The labour dispute of January 2018 was covered in early report.  The labour dispute was large scale and lasted for 2 days.  Our reporter looked into more information and came up with this follow up report.

Jiapan Oil Seal Product Factory was set up in December 2011, solely owned by Japan Seal Industries (Hong Kong) Co. Ltd which is a Hong Kong-registered Japan company with Suzuki Hiroya as legal representative. The factory produces oil seals and rubber accessories for automobile.   The factory, with over 400 staff, is located in the Fu Hai Technology Park in Baoan District in Shenzhen.

In December 2017, workers found that the factory was going to be moved to another area of the district due to the Fuyong Yiku project which was a new science and technology park.  The new factory is 15km away from the original site. The employer did not formally announce the plan or discuss arrangement or compensation for the removal. Eventually, the workers launched collective action to stop the factory from moving the machines and equipment, and asked for financial compensation, repayment of social security premium and housing provident fund, payment of wages for work on holidays.

Workers’ invitation to negotiation table refused by employer

Workers sent written request to employer on 5 January for negotiation on compensation for factory removal and repayment of social security premium, etc.  However, the employer did not respond to the request.  On the other hand, the employer tried to track down leaders of the action, and asked workers to give their names.  The workers were outraged by the threats and launched collective actions, hoping that the employer will respond to their requests.

Negotiation without sincerity ended in suppression by the police

In the morning of 7 January, the workers launched collective action to stop employer from moving machines and material in the factory.  The employer agreed to negotiate with the workers’ representatives on the same day.  However, the employer showed no sincerity to resolve the issues on the negotiation table and refused the request of the workers.  The employer only offered a “RMB3000 incentive scheme” where the workers could each receive RMB3000 as incentive if they sign removal agreement on or before 10 January and agree to return to work immediately in the new factory.  The workers’ representatives refused the proposal and asked the employer to respond to issues on removal compensation and social security.  The negotiation ended without any result.

Shenzhen was rainy and only 15°C on 8 January.  Workers were standing outdoor, wet and cold, and continued their protest to the employer.  The local police station sent police to harass workers who were defending their rights lawfully.  5 workers’ representatives were brought to the police station and released only at eight o’clock in the evening.

At the same time, the employer post notice in the factory saying that no compensation is required for factory relocation.  The employer also offered “incentives” to bribe and divide the workers, and asked the workers to return to position immediately or they would be considered “voluntarily resigned” and receive no compensation.

Employer unrestrained as public authority intervene with workers’ action

Facing suppression by the police and divide by the employer, the workers felt powerless and accepted the offer.  Workers returned to work on the day and ended their strike.

Workers’ action was suppressed immediately after two days without and their requests were not met.  The action could not sustain uncertainties, because workers were threatened when the employer tried to track down for leaders, and they did not have clear organization and strategy as they rushed to launch actions.

The other factor is the position taken by the public authority.  The Jiapan Oil Seal has to be relocated due to development of Fuyong Yiku which is a major innovative industry park project in the Greater Bay Area development.  Industry upgrading is a priority of the government and the project must not be delayed by workers’ action.   Police force was thus mobilized to suppress lawful action of the workers and arrest workers’ representatives, which caused a lot of pressure to the workers.  With the support of public authority, the employer ignored the workers.  The workers’ action was ended with request met, by a perfunctory notice.

[1] According to Article 40 of the Labor Contract Law, if the objective conditions taken as the basis for conclusion of the contract have greatly changed, so that the original labor contract cannot be performed and, after consultation between the employing unit and the worker, no agreement is reached on modification of the contents of the labor contract, the employing unit may revoke the labor contract, if it notifies in writing the worker of its intention 30 days in advance or after paying him an extra one month salary.

[2] The Labor Contract Law stipulates that the employing unit has to revoke the labour contract and pay financial compensation only when the objective conditions have greatly changed.