Something Suspicious at Wal-Mart China

Lawyers and laborers concur:  something suspicious is going on at Wal-Mart China.  In the wake of massive layoffs, Chinese workers are looking for answers, lawyers are looking for lawsuits, and everyone is looking for the labor union. 

The following excerpts from Chinese media detail the events:

Wal-Mart’s Layoffs Lacking Union Presence [First Financial Daily (China) via People’s Net]

Overseas, Wal-Mart has cut a sixth of its workforce and is closing offices in four countries.  This sort of reorganization isn’t minor news.  Yet at the time of the announcement a broad search revealed no report on Wal-Mart’s English website, nor any related story in English news.  “We don’t think this is a very big action and we haven’t issued a press release,” Wal-Mart China public relations director Dong Yuguo explained.

As to when the reorganization would take place, Dong stated that “it is not too clear.  Perhaps when a particular department begins to feel incompatible, we will gradually start the reorganization process.”

[Wal-Mart China] had not previously known about the layoffs until the day the reorganization was announced.  Additionally, reorganization will take place in Singapore, Turkey, Sri Lanka, and the Philippines.

Dong Yuguo emphasized that all of Wal-Mart’s employees are very outstanding.  The current cuts don’t look at individual employees, rather the cuts consider individual jobs .  However, after the employee cuts are made, Dong wouldn’t comment whether the positions would also be eliminated.

At the time of the layoffs, Dong stated that Wal-Mart had also recruited 100 new employees, stressing the positions would also be new.  Nevertheless, Dong would not explain how the new positions would be different from the old ones.

“In any case,” Qibin, a Beijing lawyer, notes, “Wal-Mart cannot avoid suspicion” that it is evading the new labor law.

Dong Yuguo noted that “the compensation for dismissed workers is extremely good.  The dismissed have had no complaints.” Additionally, Qibin says, “this type of compensation complies with the Labor Law”.

One Wal-Mart Procurement Center employee, wishing to remain anonymous, retorted that “we have no objections to our compensation, but we demand to know the reason for the layoffs.  We cannot be faced with such inexplicable layoffs.”

At present, there are two types of Wal-Mart in China:  procurement centers and retail stores.

In 2006, under pressure from the National Federation of Trade Unions, Wal-Mart Stores established a trade union, but the procurement system is still not unionized – Dong says unionization processes have been initiated, but it is unclear when the union will become active.  The anonymous procurement center worker says he has heard nothing of these union talks.

Some analysts think that if Wal-Mart procurement centers were unionized then the union would be able to engage with the company and represent the workers.

To view the original article in Chinese visit: People’s Net

Giving China’s Workers a Chance [Asia Sentinel]

In the US, Wal-Mart has famously blocked trade unions from organizing its million-plus workers, even closing a Canadian store that voted to have a union in 2005. In China, however, it has welcomed the ACFTU to organize its stores, presumably because the Communist Party-run union always does what the government tells it to do. So with the ACFTU supporting the new legislation, the company seems to be taking pains to appear compliant.

Dong Yu Guo, Public Relations director of Wal-Mart China, told the Jing Hua Times newspaper that the reshuffle of its employees is not aimed at the new labor contract law. Dong noted that Wal-Mart China has two business areas procurement for its worldwide operations and stores for the local market. Yu said the staff reduction is not going to affect its nearly 100 department stores and Sam’s Clubs, and that more hiring beyond the current 44,000 employees in the retail division is expected.

However, on October 22, the Global Procurement Center for Wal-Mart announced in an internal meeting that more than 100 employees had been laid off, including 40 in Shanghai and 60 in Shenzhen. A woman who works in the Shenzhen center, who asked not to be named, said she has been working there for four years and was laid off last month. She was told she would receive three months salary plus some additional compensation. She said she expected to be off for one to two months before returning to the company.

Posted by Michael Mignano on Monday, November 12, 2007

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