LABOR-MANAGEMENT RELATIONS IN COMMUNIST CHINA

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80-00809A000700200203-2
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 7
• Document Creation Date: December 22, 2016
• Document Release Date: August 31, 2011
• Sequence Number: 203
• Publication Date: October 29, 1954
• Content Type: REPORT

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IABOR-MANAGEMENT RELATIONS IN COMMUNIST CHINA
(Comment and summary: This report presents information taken
from three chapters of the monograph entitled Hsin-uiin-chu Chu-i Lao-
tzu Kuan-hsi (Labor-Management Relations in the New
De---c
1950 emocra cyF, by
Ting Chen, published by Rsin-ch'un Ch'u-man-she, Shanghai, November
?
Under the conditions of the old society, all labor discipline was
established by and for employers. In the New Democracy, laborers
have a voice in establishing the rules under which they work.
In the postliberation business recovery program, only those en-
terprises which really contribute to the national economy should be
encouraged to rehabilitate themselves.
The consultative conference plan, with an equal number of repre-
sentatives of labor and management participating, is proving to be
the best way of solving all labor-management problems.]
MODEL REGULATIONS FOR LABOR DISCIPLINE
(4 June 1950)
There is a great difference between the labor discipline of the old society
and the New Democracy.
In the old society, discipline was dictated by employers and labor had to
accept it. The management-labor relationship was that of oppressor and oppres-
sed. Old textile industry labor codes were prepared entirely by the employers'
association. The codes set forth in detail the duties of the workers and the
privileges, but not the responsibilities, of the employers and also provided for
enforcement of laborers' duties by law. )
In contrast, the labor contract drawn up by the East China Labor Conference,
consisting of only eight brief provisions concerning labor's responsibilities,
is wholly the result of labor's own free-will proposals. These provisions are
as follows:
1. Work and eat on time.
2. Absence may be requested for illness or personal business.
3. Care for machines, economize on raw materials and goods.
4. Observe public sanitation rules; be clean.
5. Maintain order and safety in the factory.
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6. Observe contracts, maintain-production.
7. On the basis of democratic management, accept the leadership of
supervisors and work in accordance with the labor law.
8. No meetings shall be held during working hours, except in an
emergency, and then only with the consent of the representative of the
administration.
Preliberation regulations of the cotton textile industry on rewards, penal-
ties, and welfare services were also all drawn up by management and intended to
benefit management. These regulations showed little regard for labor and no
recognition of labor's creative power.
The provisions for rewards and penalties drawn up by the postliberation
East China Textile Industry Conference are ii. sharp contrast to the old pre-
liberation pattern. The new provisions are directed toward the positive pro-
motion of production increases, and provide'rewards for all who reveal
progressive attitudes and activities. An penalties are meant to be instruc-
tive and are preceded by exhortation, criticism and warning. The labor union
say take exception to awards or penalties meted out by management and the prob-
lems involved may be worked out by negotiation.
The East China Textile Industry Conference worked out these provisions
after democratic discussion on the basis of equality of standing and profit
for both labor and management, and in the interests of enlightened expansion
of production.
RECOVERY, HOURS, CONFERENCES, SANITATION
(1 August 1950)
Recovery
March and April 1950 were difficult months for industry and commerce in
Shanghai. The destructive bombings of 6 February 1950 brought to the fore such
problems for labor and management as close-downs, dispersal, inventories, and
protection of capital. Strong leadership by government, voluntary sacrifices
by labor, and the growth of political consciousness on the part of employers
have made for much improvement since May.
As a matter of principle, firms which are showing initiative toward recov-
ery should be encouraged. However, as a matter of national policy, some indus-
tries, such as the cigarette and match industries, should be slowed down in
production recovery and others should not be revived at all. In this compli-
cated situation, a definite plan for adjustment is important. Only industries
which contribute to the new national policy, which can be operated without use-
less competition, and for whose product there is a rational need should be al-
lowed to resume production.
Such questions as protection of investment, capital, raw materials, etc.
all require careful planning. The steps in planning for steady development
Laken by the silk and rubber industries are examples to be emulated.
Most of the practices followed under the old regime are inappropriate for
the present. In future planning, the long-term interests of labor must be
basic in reform activities. Collective bargaining contracts and joint labor-
management negotiation agreements are essential.
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Labor is demanding more leisure and study time, claiming that study is
necessary for improvement of skills. Study is especially necessary for workers
in those plants that need to revise their line of endeavor. Management is ask-
ing for longer working hours because of difficulties in maintaining production..
Both sides are violating the principle of mutual profit. They should engage in
mutual discussions to solve their problems and they should consider the needs
of their consumers in their discussions. Requirements for operating hours are
not the same in central Shanghai as in the industrial or the suburban area.
Hence, to try to standardize business hours for the whole city is unrealistic.
Each area's practice should conform to its own needs. With regard to small
businesses using no labor but that of the proprietor, it is good for them
ordinarily to conform to general practice, but there should be no pressure put
on them to conform in the matter of business hours.
Labor and Mann emm~t Conferences
The practice of holding consultative conferences has been growing rapidly
during the summer [1950) in Shanghai. It began with business associations, but
has been spreading to individual businesses. There should be liaison between
association conferences and individual business labor-management consultative
conferences; there is now no relationship of leader and led between them. The
conferences held by individual industries should consider the actions of the
conferences held by business associations, but need to apply these actions only
when appropriate.
It is not always necessary to have an equal number of labor and management
representatives in a conference. It is of chief importance that the delegates
be capable of properly conducting the conference. Although there has been
considerable progress in conferences recently, many of them are still negative.
An increase in the positive nature of the movement is needed.
Factory Sanitation
During the 3 months since issuance of the provisional regulations on fac-
tory sanitation, there has been considerable progress in propagandizing the
program and in making key-point investigations into existing conditions in
industry.
The present need is for a progressive improvement along these lines without
try to force expensive changes that are beyond the present capacity of manage-
ment to carry out.
Employment services have been set up in Shanghai in accordance with Ministry
of Labor directives. So far, administrative organs have been carrying the load.
The success of the plan awaits general cooperation. Some employers fear that
laborers introduced under the plan may be difficult to manage. This fear is
baseless. This plan is for the mutual benefit of labor and management.
All employers who have problems of relocation, reductions in force, adjust-for wor
ance. governmentment of
theklaboers may request
it u supplies to industrythave a The
greater political consciousness than the mass of workers. In the New China,
labor distribution must become a planned operation for the benefit of national
construction.
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NATIONAL CONFERENCE OF LABOR BUREAU CHIEFS
(14 Apr 1950)
Improvement in Iabor-Management Relations
Since the Shanghai Military Control Commission
the labor management situation on 19 August th
on
has eere isbsuedentwoconsiderabledirectivesimprov-
ment. Excessive demands of labor have been bought into line.
Beginning with the photographic industry, the weavers, paper manufactures,
camel hair dealers, and others have put into effect collective bargaining con-
tracts which have brought about new labor-management relationships. In some
industries, collective bargaining relations have been established on an indus-
try-wide basis, thus ensuring uniformity.
Not
ccumstanceall questions have
new settled.
continually require been
adjustments. Shang arising with s and com-
mercial enterprises are still confronted by many difficulties. Some ofd these
have been carried over from the old bureaucratic and feudalistic preliberation
days. Others have been created by bombings and the blackade since liberation.
Adjustment of Labor-Mnagem nt u i ra
Economic difficulties are by no means the only cause of problems in labor-
management relations. Another cause is the failure of both sides to understand-
how to adjust their relationships.
Many private employers say that laborers have been very hard to manage
since joining the unions. They feel they need a military representative in
their place of business, as in public enterprises, to keep laborers in line.
They do not realize that military representatives get production from workers
by taking the workers' wishes into account and discussing matters with them.
At the recent national Conference of Labor Bureau Chiefs in Peiping, the
formula devised for settling differences and raising production was joint .
counseling of labor and management in a democratic manner and on a basis of
equality. Should a military representative use authoritarian methods, produc-
tion would decrease in public enterprises, since a military representative
knows far less about production methods than factory superintendents or man-
agers. If private enterprise leaders will carry out a program of mutual dis-
cussion of problems with labor, they will have little difficulty either in
holding the respect of the workers or in raising production.
The conference pointed out the necessity for all private enterprises to
set up labor-management consultative conferences, with an equal c'unber of
delegates from each side (from two to six). This group should hold at least
two conferences per month. Subjects for discussion were outlined as follows:
1. Problems of setting up and implementing collective bargaining con-
tracts.
2. Problems of production planning, fulfilling quotas, increasing pro-
duction, quality, economy of materials, tools, etc. roblems manpower,Prearr igementmpofrovmachineement of
and production
distribution a of raw distribution
materials. of
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4. Problems of technical improvements, methods of labor, and elevation
of production efficiency and technical levels of laborers.
5. Operational problems such as improvement of management and factory
regulations, and establishment and revision of a system of rewards and penal-
ties.
6. Problems of hiring and firing and other personnel matters.
7. Questions of wages, hours, living conditions, and other welfare
problems.
8. Problems of safety, sanitation, sickness, injuries, disability, and
treatment of expectant mothers.
It is apparent from the above that the main problem for discussion in
consultative conferences is. how to improve and increase production; personnel
problems are secondary.
. Some fear that introduction of all these questions into conferences will
weaken the control of management. From the former viewpoint of management, it
will; but from the new democratic viewpoint of management such discussions will
make management easier, because the rules in force represent labor's idea as
well as those of management.
According to Lao-tuns Kun-pao, No 1, page 15, some groups of laborers
have gone too far left in their demands since liberation, but be careful
explanation they can be made to be reasonable. Bad elements must be segre-
gated from the masses. Differences can then easily be adjusted.
Important conditions for successful negotiation are belief in labor,
respect for labor, and dependence on labor. Without these, laborers will
not respond, present their valuable ideas, or produce properly. Experiences
in Tientsin and Wuhan have demonstrated the practicality of consultative
conferences in improving production.
Experience in Shanghai has made it clear in a short time that the con-
sultative plan is applicable in all sorts of industries and businesses.
Problems of Unemployment
Because of inflation in Shanghai, an atmosphere of retrenchment prevails
and there is.much unemployment.
At the same time in the Northeast, there is a prospective shortage of
200,000 skilled workers and technicians.
The Conference of Labor Bureau Chiefs in Peiping decided to set up
unemployment aid stations in the cities. The policy followed in Peiping was
considered a good model. Decisions were reached as follows:
1. Employers may discharge surplus employees, but only after recieving
approval of the labor bureau. Rehiring of either temporary or permanent labor-
ers must be approved by the labor bureau.
2. During one year's time after discharging an employee, employers must
continue to pay to the authorities one third of that employee's regular wage
as a contirbution to an unemployment relief fund.
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3. Whether an enterprise discharges workers or notithe authorities may
exact from all employed workers one percent of their wages and likewise exact
from employers one percent of their payroll, as an unemployment relief fund.
4. Authorities will issue to all discharged workers 50-70 percent of
their wages in relief funas.
5. All public and private enterprises employing ten or more employers
are subject to the above rules.
-While this Peiping plan may not be fully applicable in Shanghai, it is
worth study. Some industries in Shanghai need to discharge surplus workers,
but to give each several months' separation pay would break up the business.
The Peiping plan offers: advantages in these cases.
Labor Helps Management
Under Communist Party leadership, labor in Shanghai has been able to
appreciate the problems of employers and try to help. In drawing up collec-
tive bargaining contracts, labor has stipulated in many cases that it would
ask no wage increase during the term of the contract. After the February
1950 bombings, laborers in many enterprises took a voluntary pay cut in
order ;o leave more capital in the enterprise, or they took turns taking un-
paid vacations in the country to help in surmounting the emergency. By this
attitude, employers were greatly influenced to do their best in management.
Some backward laborers, however, were persuaded by agitators to make
higher demands, and to picket employers' homes or sell the firms' machinery.
While such instances were unusual, they show the need for better labor-union
leadership and better spare-time education for laborers.
The Labor Bureau Chiefs Conference in Peiping passed resolutions tending
to correct all these evils. Shanghai stands to benefit much from the results
of the conference if all concerned will study the actions of the conference
and try hard to carry them out.
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