On September 16th, nearly 50,000 members of the United Automobile Workers ("UAW") of General Motors (GM.US) carried out the biggest strike ever in the past 12 years in the U.S. UAW representatives demanded for creation of more job positions, raise in remuneration for new hires, and restriction on the number of temporary workers. Recently, GM.US has reached a "truce" agreement with UAW and the strike suspended. As specialized lawyers practicing labor law, in recent years, our team have been frequently requested for legal consultation on strike issues in an increasing trend, and assisted clients to properly settle a few strikes. This article will compare and analyze the right of strike in China and in the U.S. by elaborating the two strikes settled by AnJie labor law team in April 2019 and the strike of GM.US.

  1. Case Study of Strike

In April of this year, the employees on the main production line of a Japanese-invested electronics company in Guangdong Province (hereinafter referred to as the "electronics company") slackened and ceased production, due to the equity transfer of its parent company in Japan. Most employees commuted to work on time but didn't work, just sitting in the canteen for protest. The main appeal of the employees is to request the electronics company to buy out/compensate for their service years and resume the production. The employees believed that the equity transfer of parent company would inevitably affect the electronics company, thus it remained unknown whether the employees' benefits will be reduced and whether organizational structure, management guidelines and policies will be maintained, etc. Therefore, they thought that the buy-out of service years is the most appropriate action to take and for which they required compensation as a precondition for return to work. In the other hand, the electronics company believed that equity transfer occurred in parent company without the electronics company getting involved in any equity transfer or name changing. In accordance with laws and regulations of P.R.C, the equity transfer or change in investors shall not affect the continuing performance of employment contract. The electronics company regarded employees' appeal unreasonable and lacking legal basis, and thus disagreed with their appeal for buy-out of service years.

After the occurrence of strike, in order to reward the employees who stuck to their posts and to encourage striking staff to return to work as soon as possible and thus ease conflicts, the electronics company proposed an incentive scheme, based on which the employees who stuck to their posts or has returned to work timely would be rewarded on a daily basis. At the meantime, the management of electronics company promised that employees' benefits will remain unchanged. After the proposal of incentive scheme, most employees returned to work, but a small number of employees still refused to return. The electronics company took appropriate disciplinary actions even up to termination of employment contract on those employees who refused to return, in accordance with the actual situation of each employee.

For another strike occurring in a foreign-invested electric company in Zhejiang Province (hereinafter referred to as the "electric company"), the employees on production line stopped the work and production triggered by the rename of the electric company due to the divestment of its parent company. The management of the electric company had made it clear that the rename of the electric company, relative to the divestment of the parent company, would not involve any adjustment to the employment contracts. The service years of the employees would be counted in succession and employees' benefits would remain unchanged. Employees' appeal in the first place is buy-off of service year, and then they challenged the working hours system, and requested for adjustment to the pay cycle of overtime compensation. During the strike, a number of employees commuted to work as before, but did not work, just sitting in the canteen or leisure area for protest. Some employees even did not come to the company's domicile. Electric company proposed incentive and punishment scheme, according to which the employees who returned to work timely would be rewarded, while for those who did not return to work within the prescribed time, the electric company took disciplinary actions such as sending warning letter or even termination of employment contract in accordance with the company policies.

The above two cases can indicate that in most cases, employees' strikes are usually not triggered by the infringement on their legitimate rights, but reversely for the appeals of benefits without statutory basis, such as asking for the buy-off of service years, salary and benefit increase. In China, lots of enterprises concern about whether employees have the right to strike, whether the strike is illegal, and what the employer should do to settle a strike.

  1. Right of Strike in China

The existing Constitution Law of P.RC. issued in 1982 does not specify the right of strike, however, in the previous version of Constitution Law issued in 1975 and in 1978, there were some relevant provisions. Article 28 of the 1975 Constitution Law and Article 45 of the 1978 Constitution Law stipulated that "Citizens shall have the freedom of expression, communication, publication, assembly, association, procession, demonstration and strike".

Article 8 of the International Covenant on Economic, Social and Cultural Rights provides that: laborers shall "have the right to strike, but shall exercise such right in accordance with the laws of each country". In October of 1997, the Chinese Government signed the International Covenant, and in February of 2001, when it was reviewed and ratified by the Standing Committee of the National People's Congress, no reservation about the right of strike was proposed. In another word, our legislation has recognized laborers' right of strike under international conventions, and in China, exercising right of strike has international law basis.

Article 27 of the Trade Union Law of P.R.C provides that "In the event of work stoppage or slack occurring in an enterprise or public institution, the trade union shall, on behalf of the employees, consult with the enterprise/institution or parties concerned, reflect the thoughts and demands of the employees and offer suggestions for the settlement. Enterprise/institution shall solve the reasonable requirements of employees. Trade unions shall assist enterprise/institution to well response and resume the production and work order as soon as possible". This provision, which mainly sets out the rights and obligations of trade unions in a strike, does not address the specific issue of strikes by laborers.

In addition, article 59 item (2) of the Civil Servants Law of P.R.C clearly stipulates that: civil servants may not "organize or participate in illegal organizations, organize or participate in strikes". This provision is a prohibition on strikes to the particular subject as civil servants.

In summary, in China, the exercise of right of strike has international law basis. In another word, the laborers have the right of strike, however, there are no relevant provisions in China on how to exercise or regulate the right of strike. If right of strike can be clarified by legislation in our country, as well as how to rule and regulate such right in order to make the right of strike be exercised in an orderly manner, it probably may play a role of dynamic mediation to labor relations, which is beneficial to labor balance and harmony.

  1. Right of Strike in U.S.

The National Labor Relations Act (NLRA) protects the rights of employees who engage in concerted activities for lawful purpose, such as strikes for a lawful objective. Strikes for a lawful objective include economic strikes and strike against unfair employment. If the objective of a strike is to obtain from the employer some economic concession, such as higher wages, shorter hours, or better working conditions, the strikes are called economic strikes and the striking employees are called economic strikers. They retain their status as employees and cannot be discharged, but they can be replaced by their employer. If the employer has hired bona fide permanent replacements who are filling the jobs of the economic strikers when the strikers apply unconditionally to go back to work, the strikers are not entitled to reinstatement at that time. However, if the jobs are available and the strikers have made an unconditional request for their reinstatement, they are entitled to be recalled to the jobs. The strikes to protest an unfair employment practice committed by the employers are called strikes for unfair employment. These striking employees are called unfair employment strikers. Such strikers can be neither discharged nor permanently replaced. When the strike ends, unfair employment strikers, absent serious misconduct on their part, are entitled to have their jobs back even if employees hired to do their work have to be discharged. If the National Labor Relations Board (NLRB) finds that the lawful strikers who have made an unconditional request for reinstatement have been unlawfully denied reinstatement by their employer, the NLRB may award such strikers backpay since the date they should have been reinstated.

The employers have the right to discharge the employees who participate in an unlawful strike. The examples of the unlawful strikes would be a strike to compel Employer A to cease doing business with Employer B, a strike to violate a no-strike provision of a collective contract, a strike to terminate or change a collective contract. Strikes are unlawful because of serious misconduct of strikers. This applies to both economic strikes and unfair labor practices strikes. Serious misconduct includes but not limited to violence and threats of violence. Examples of serious misconduct include strikers physically blocking persons from entering or leaving a plant, strikers threatening violence against non-striking employees, strikers attacking management representatives.

  1. Characteristic of Strike

Generally, strikes can be divided into political strikes and economic strikes. The so-called political strike mainly refers to the suspension of work targeted at state public authorities in order to realize the specific political proposition. Economic strike, on the other hand, refers to the suspension of work by employees in order to improve working conditions or increase wages and other economic benefits. From the current situation, the strikes in our country are all economic strikes, mainly with respect to the disputes in labor relations and mostly in foreign-invested enterprises and private enterprises. Strike once occurred will cause great loss to the enterprises and employees may take strike as a customary practice.

At present, most local governmental authorities keep an ambiguous attitude towards employees' strike attitude, namely not making any judgment, just solving the incident mainly through communication and negotiation, making stability and harmonization a priority.

  1. Prevention and Response to Strike

Though strike usually occurs abruptly, it is still in some cases predictable and foreseeable. It is highly recommended that the enterprise shall prepare the emergency plan before making or announcing major decision as the key to prevent strike.

Firstly, enterprise shall fully understand its internal employment situation and assess the potential employment risks as far as possible to prepare the solution.

Secondly, enterprise shall establish communication mechanisms, improve all kinds of communication channels and make them unhindered, which allow employees to feedback their appeals through various channels. Enterprise shall respect views or suggestions collected from the employees.

Thirdly, enterprise shall set up emergency team. In the event of strike or other similar group incidents, the emergency team can perform its functions to rationally control the situation, avoiding aggressive or extreme acts to prevent the employment conflict from "politicization".

Last but not least, the functions of all parties shall not be absent during the settlement. It shall resort to the power of trade unions and the government under such incidents or potential scenarios. Before making or announcing major decisions to be made or announced, the enterprise shall conduct effective communication with trade unions, labor administrative departments, public security departments and etc.

In the event of a strike, enterprise shall face up and actively respond to the strike, and properly deal with the relationships as follows:

First is the relationship with the employees. Active communication is an effective way to settle employment conflicts. The enterprise shall face up to the contradictions without sidestepping the problems; establish a mechanism for collective bargaining as soon as possible to actively communicate with the employees; fully understand employees' demand, and answer questions raised by employees in good faith. The enterprise shall make active response to employees' legitimate demands, and as to demands without statutory basis, the enterprise may formulate pacification plan according to the actual situation on the basis of full consideration to the pros and cons. If there is violence in the strike, such as destroying enterprise's production materials or facilities or other illegal acts or severe violations of discipline, the management shall make a prompt decision, such as to call the police or terminate the employment contract.

Second is the relationship with the government. The enterprise shall have advanced, in-process and subsequent communication with the labor administrative departments, public security departments, trade union and other relevant functional departments so that they can make a positive impact on the settlement of strike and enforce the laws in a neutral attitude.

Third is the relationship with the media. The enterprise shall consolidate an internal consistent statement on the incident, and designate professionals to have dialogues with media to avoid the negative effects on the media.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.