VZCZCXRO5950
RR RUEHCN RUEHGH
DE RUEHGH #0643/01 2770036
ZNR UUUUU ZZH
R 040036Z OCT 07
FM AMCONSUL SHANGHAI
TO RUEHC/SECSTATE WASHDC 6318
INFO RUEHBJ/AMEMBASSY BEIJING 1452
RUEHCN/AMCONSUL CHENGDU 0913
RUEHGZ/AMCONSUL GUANGZHOU 0892
RUEHSH/AMCONSUL SHENYANG 0914
RUEHHK/AMCONSUL HONG KONG 1039
RUEHIN/AIT TAIPEI 0733
RUEATRS/DEPT OF TREASURY WASHINGTON DC
RUEHC/DEPT OF LABOR WASHINGTON DC
RUEHGV/USMISSION GENEVA 0019
RUEHGH/AMCONSUL SHANGHAI 6800

UNCLAS SECTION 01 OF 02 SHANGHAI 000643 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPT FOR EAP/CM AND DRL 
DEPT PASS USTR FOR KARESH, A. ROSENBERG, LOI, KATZ 
LABOR FOR ILAB - ZHAO LI 
TREASURY FOR OASIA/ISA-CUSHMAN 
USDOC FOR ITA/MAC/MCQUEEN, MELCHER AND DAS KASOFF 
 
E.O. 12958: N/A 
TAGS: ELAB PGOV PHUM CH
SUBJECT: SUZHOU LABOR EXPERT VIEWS ON LABOR CONTRACT LAW, ACFTU, AND 
COLLECTIVE BARGAINING 
 
 
(U) This cable is sensitive but unclassified and for official 
use only.  Not for distribution outside of USG channels or via 
the internet. 
 
¶1.  (SBU) Summary.  In a September 20 meeting, Suzhou University 
Law School Professor and labor expert Shen Tongxian downplayed 
the importance of the new Labor Contract Law (LCL) and said that 
the law could actually have an adverse affect on workers as 
companies find ways to circumvent it.  Shen also had a negative 
view of All-China Federation of Trade Unions (ACFTU), which she 
believes is ineffective in representing workers.  The union does 
not have labor experts on staff and, more importantly, did not 
have the power to organize strikes.  She also emphasized the 
importance of improving workers' safety, which she called a 
"worker's basic human right." End Summary. 
 
LCL: Counterproductive 
---------------------- 
 
¶2.  (SBU) On September 20, Poloff and FSN Political Assistant 
met with Suzhou University Law School Associate Professor Shen 
Tongxian to discuss the new Labor Contract Law (LCL), collective 
bargaining and the role of ACFTU.  Professor Shen is a leading 
labor expert in China and provides training to lawyers and local 
government officials on protecting workers' rights. 
 
¶3.  (SBU) Professor Shen downplayed the importance of the new 
LCL and said it could have an adverse affect on workers in 
China.  While it shifts some power from the government to the 
workers, companies can and will try to find ways to circumvent 
the law.  For example, the LCL requires employers to sign a 
permanent contract with employees who have worked at the company 
for more then ten years.  Rather than signing the contracts, 
Professor Shen predicted that many companies would just fire the 
workers before the tenth year.  She discounted arguments that 
the LCL will lead to higher labor costs and cause multinational 
companies (MNC) to move factories away from China.  The LCL will 
only affect dispatch companies which provide workers to other 
companies and companies who violated labor laws in the past. 
Most MNCs obey the law and have good labor practices.   However, 
some foreign companies, especially those from Taiwan, will 
continue to violate labor laws without any ramifications.  Local 
governments tolerate these violations because they want to 
protect foreign investment. 
 
Trade Union: Weak Representatives 
--------------------------------- 
 
¶4.  (SBU) According to Professor Shen, the ACFTU is not 
effective in representing workers.  First, it is not able to 
effectively pressure companies during labor negotiations because 
Chinese law does not allow the trade union to organize strikes. 
Second, the people who work for the trade union are not labor 
experts and are unable to effectively enforce the law.  However, 
since the trade union has close ties to the government and the 
organization itself is a semi-governmental organization, it has 
a lot of influence on labor legislation. 
 
Collective Bargaining 
--------------------- 
 
¶5.  (SBU) Professor Shen is also pessimistic about the impact of 
collective bargaining.  China is currently considering a 
collective labor contract law in order to give employees more 
advantages in negotiating contracts with companies.  The purpose 
of adopting the new law is to solve labor disputes through 
negotiations and consultations instead of confrontation. 
However, Shen said that it is likely that the ACFTU will play a 
big role in collective bargaining as it in theory represents the 
workers.  Unfortunately, the ACFTU is not independent and is 
unable to organize strikes, which limits its ability to 
negotiate collective contracts with companies.  She believes 
that the law, therefore, will have limited effect. 
 
Work Safety: A Worker's Basic Human Right 
----------------------------------------- 
 
SHANGHAI 00000643  002 OF 002 
 
 
 
¶6.  (SBU) According to Professor Shen, Chinese workers nowadays 
are more aware of their rights, but often give up filing legal 
cases because of high court costs.  In addition, local 
governments are not able to provide workers with much legal 
assistance because there are few labor experts in China.  Shen 
believes that promoting work safety is the most important area 
for labor rights protection and said work safety is a worker's 
"basic human right."  At present, China's main industry is 
manufacturing, which has a high rate of work related accidents, 
injuries and deaths.  She urged that in work injury related 
cases, judges should fully support workers and help workers get 
compensation for mental and physical problems caused by work 
accidents.  In the cases in which workers violate laws and 
company guidelines, judges should rule in favor of the 
companies.  Shen believes that through this "virtuous circle" 
companies will learn how to abide by labor laws. 
 
Shen's Labor Programs 
--------------------- 
 
¶7.  (SBU) Besides teaching labor law courses at Suzhou 
University, Professor Shen runs a three-day labor training 
program for lawyers, judges, labor dispute arbitrators and 
representatives who work at the local ACFTU legal affairs 
department.  The purpose of the training is to raise awareness 
of labor laws and to improve the trainees' capability during 
trials.  According to Professor Shen, the sessions have been 
very effective in teaching participants how to best protect 
worker's rights.  In one session, a judge admitted that he made 
mistakes in a previous labor dispute case.  Professor Shen will 
also begin a legal clinic program for law school students next 
year. 
JARRETT