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A new precedent: Shenzhen furniture factory worker wins two years overtime back pay

Chinese migrant workers being owed wages is a problem widely recognized in China. It is so common that we have inadvertently taken it for granted. CLNT is fortunate to have come across a recent case study that challenges the chronic underpayment of Chinese workers.

There are two main ways that workers are owed wages: 1) underpaid or unpaid overtime; 2) wage arrears for regular work hours. The problem is so widespread – particularly concerning overtime wages – that it has become the norm in the eyes of factory owners/managers, the Chinese government and worse yet, by the workers themselves. In Shenzhen, however, workers are becoming more aware of the minimum wage standards set by the government, and radical actions such as road blockages and strikes are common. But generally speaking, workers usually only take collective protest action when they have been owed so much that it has become intolerable. Local governments or trade unions only intervene when the protest is serious enough. One other recourse available to workers is to take the legal route by taking the employer to arbitration or to court. Cases are usually filed individually rather than as collective disputes, often because of pressure from the courts or government offices that want to avoid large-scale disputes. Unfortunately more often than not, the arbitration and court systems do not rule in the interest of the workers.

CLNT has translated two articles that report on one worker named Hu’s fight to get back unpaid overtime wages through the court system: the first is a straight forward newspaper report on the case with a brief comment from a legal expert; the second is the worker’s own description of the process that was published in an NGO magazine four months later. Not only do they supplement each other by providing fuller information, they also give us a very interesting perspective on the public discourse on the legal status of owed wages, and more so, on how the case has a private personal impact on the worker himself. It also reminds us that no one should take these things for granted.

According to the Southern Workers’ Daily article translated here, the legal institutions have been violating the law for some years by misinterpreting Article 82 of the Chinese Labor Law. In Guangdong province, lawyers, arbitrators, the courts, and legal service agencies have been working on the assumption that claims for unpaid overtime wages could only go back two months. In reality there is no such time limit.

In this particular case, worker Hu was originally awarded only two months of unpaid overtime worth 6,000 RMB by the district arbitration committee. But he then went against convention and sued his employer in the district court for two years worth of unpaid overtime. He won the case and got back 46,000 RMB – seven and half times more than the arbitration committee awarded. So, as pointed out by a law expert in the Southern Workers’ Daily, a precedent has been set. But will the old illegal practice change? We doubt it. Not unless most workers begin to do what worker Hu has done: insist on defending his rights.

Worker Hu’s own account of the case shows up the important influence of labor NGOs in Guangdong province. It was through an NGO’s correct interpretation of the law that Hu got back so much more money. Hu himself should also be lauded for his persistence and resourcefulness in arguing his own case in court. In preparing his own case, his rights awareness increased dramatically. From now on, he is determined to stand up for his own rights.

One very interesting but less obvious part of this court case is how the judge questioned the legality of the work conditions and piece rates reported by the employer, because they had not been approved by a Staff and Workers’ Representative Congress in the workplace. Article Four of the Contract Law which will be in force by January next year states that:

“When an employing unit formulates, revises or decides on rules and regulations or material matters that have a direct bearing on the immediate interests of its laborers concerning labor remuneration, working hours, rest and vacations, occupational safety and health, insurance and welfare, employee training, working discipline or work quota management, etc. the same should be discussed by the staff and workers’ representative congress or all the workers. The staff and workers’ representative congress or all the workers, as the case may be, should put forward a proposal and comments, whereupon the matter shall be determined through negotiations with the labor union or employee representatives conducted on a basis of equality”.

Another significance of this ruling is the large amount of unpaid wages that was awarded to the plaintiff. Worker Hu was awarded a total of 46,000 RMB (40,000 RMB for two years of unpaid wages and 6,000 RMB as compensation). This award was more than his total base salary received over that two year period, which amounted to only 32,400 RMB (1,350 RMB x 24 months).

Let us consider a scenario in which migrant workers suddenly learn about this precedent and start taking their employers to court. The amount involved will be astronomical. Say for argument’s sake, if one million workers like Hu sued their bosses for two years over time back pay, this could come to some 40 billion RMB – about 5 billion US dollars! There are at least 15 million migrant workers laboring in Guangdong province in the export sector and most of them have been owed wages. This would certainly have repercussion on China’s wage levels.

PDF version of the introduction:
CLNT_Overtime_backpay_INTRO.pdf [94.87KB]

Here are the two translated articles

1) “Newspaper coverage of two years overtime back pay case
CLNT_court_awards_overtime_backpay.pdf [98.16KB]
深圳:索要加班费可追溯两年
Two years overtime backpay newspaper.jpg [204.14KB]

2) “The Fight to Get Two Years Overtime Backpay
CLNT_overtime_backpay_workers_account.pdf [106.57KB]
追讨两年加班费的经过 (3 pages)
Worker’s account page 1.jpg [303.17KB]
Worker’s account page 2.jpg [303.17KB]
Worker’s account page 3.jpg [303.17KB]

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