Workers Take Wage Arrears Claim to Arbitration—Deputy Chair of their Trade Union Defends the Company Against Workers!

Nanfang Gong Bao (Southern Workers' Daily), 4 March 2002

Liang Yonglun and 130 of his colleagues were originally employed by the Heng Bao Industrial Company in Guangzhou. Between June 6 and July 7, 2001, the company embarked on a restructuring programme that led to the dismissal of 131 employees on the grounds that they were no longer required. As reported by Nanfang Gongbao in July 2001, both parties signed a contract cancellation agreement, according to which the dismissed workers would receive compensation in installments. The agreement stipulated that 50 per cent of the compensation would be paid in the first installment to be handed over before December 31, 2001 and the remainder before June 30, 2002. Meanwhile the dismissed employees would receive a livelihood stipend of Rmb 300 per month until the first installment was paid, and Rmb150 per month until the second installment was completed.

Before the dismissals were announced and the compensation agreed, the company was also in arrears with wages to current employees and livelihood stipends for laid off workers. On January 23, 2002, the company had not paid the first installment of the compensation as agreed in the compensation document. On that day, Liang and his colleagues therefore filed for arbitration with the Baiyun district Labour Disputes and Arbitration Committee (LDAC) citing the company's failure to adhere to the terms of the compensation agreement and wage arrears as violations of their rights. In their application, the workers demanded that the company agree to a one-off payment of all compensation and back pay owed to them as well as additional damages of 50 per cent of the original compensation and 25 per cent of the wage arrears as compensation for breaking the agreement.

The Baiyun LDAC noted that both parties had already voluntarily signed a compensation agreement and that the employer had broken the terms of this agreement. As such, the LDAC upheld the request from the appellants for a one-off payment of the total agreed compensation. However, it also determined that since the employer had not deliberately failed to deduct or pay wages, the request for 25 per cent compensation for outstanding wage arrears was not granted. The LDAC ruled that the enterprise make a one-off payment to Liang Yonglun and his 130 colleagues of Rmb 840,000 in unpaid wages and livelihood stipends and a one-off dismissal compensation payment of Rmb 2.6 million. The remaining requests for additional compensation were turned down.

In response to the application for arbitration over unpaid compensation wages arrears and dismissal, the company appointed the Deputy Trade Union Chairperson at the enterprise level, responsible for all its employees, as their representative. Consequently, the trade union official cross-examined the workers—on the company's behalf!