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Employee Benefits Blog Insights on Employee Benefits and Executive Compensation

Recent Developments in Collective Salary Negotiation in China

Posted in Employment, Labor

by May Lu

As a result of discussions around China’s pending Draft Salary Regulation, collective salary negotiation has once again become a hot topic.

There have been several well-known, recent cases relating to collective salary negotiation.  In 2010 one Japanese-invested car company raised its Chinese employees’ salaries by 35 percent after experiencing a strike that lasted more than two weeks and interrupted almost all of its manufacturing in China.  In 2011 it was reported that French supermarket Carrefour had not raised employees’ salaries for 12 consecutive years.  This drew considerable attention from the local government in Shanghai and Carrefour was forced to raise wages by 8 percent after a Government-led collective negotiation with the employees.

In addition, trade unions at different levels have been very active in urging employers to sign collectively bargained contracts that include salary increase as the main content.  Furthermore, additional rules relating to the collective negotiation process have been issued to provide guidelines regarding collective negotiation for enterprises that do not have trade unions.  The future for collective salary negotiation looks bright, but is that really the case?

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