By Erin Wigger and Peter Schnall
Our recent blogs have highlighted the many
difficulties that must be faced by Foxconn as well as other Chinese
manufacturers to assure healthy working conditions for their labor force. One often-overlooked
issue in the way work is organized in China is the problem of dispatched
workers.
The past several years have seen a sharp
rise in the use of dispatched labor in China. Under the dispatch system, a
worker is officially contracted by a dispatch agency and then sent to companies
recruiting new workers for what is, under the Labor Contract Law,
supposed to be “temporary, auxiliary or substitute job positions” (1). This
stipulation, meant to protect the jobs of direct hire workers which are
contracted and permanent, has clearly failed to hold back the tide of new
dispatched labor hires as shown by the swelling numbers of unregulated dispatch
companies and recorded dispatched hires. These numbers, already high, are also
very likely to be underestimated
given that many of these hires are off the books. In fact, since the law came
into affect in 2008, several large state and privately owned companies have
fired many of their own direct hire workers in order to replace them with
less-costly dispatched workers (2).
Why is dispatched labor so appealing? The
rights of dispatched workers are harder to uphold since the regulation of
dispatch agencies is so poor, and thus companies are able to exploit them with
ease under China’s current system. For instance, though a dispatched worker
might be performing the exact same job responsibilities as his direct-hire
peer, the company in which they work is not required to make social security
payments on their behalf, is not held responsible for workplace injuries and
may fire them without severance. This makes it difficult for these workers to
organize and also puts them at risk for mistreatment at the hands of
management. Several independent audits of dispatched labor workers found that
dispatched workers received greater bullying, harder working conditions as well
as less pay than direct hire workers (2, 3).
According to the China Labor Watch’s
recent investigation, labor dispatching is rampant in Apple’s supply chain with
dispatched labor representing 70% of the
entire labor force in China (3). However,
a recent report from The All-China Federation of Trade Unions paints a somewhat
more conservative picture with the total number of dispatch workers nationally
only at 20%, or 60 million (2).
This is all very discouraging for those
keeping an eye on progress in China. As Li Qiang, director of China Labor
Watch recently pointed out in his recent July 31 testimony for the
Congressional-Executive Commission on China. His 135-page analysis of working
conditions at Foxconn and nine other Apple suppliers revealed that, “Foxconn is
hardly an exception, as deplorable working conditions characterize all the
factories examined, with conditions often even worse than those uncovered at
Foxconn” (4).
One might then ask in what way Foxconn is better than other factories in China? It has made one positive change since the plant’s working conditions received worldwide exposure; the plant has shifted from using dispatched workers to contracted, direct-hire workers.
With Foxconn now hiring workers directly,
rather than through a third party intermediary, it assumes more responsibility
for their health and is subject directly to Chinese labor laws. This
constitutes a genuine win for the Foxconn labor force. In a country where the
rights of dispatched workers have clearly slipped through the cracks and most
companies have, in the last decade, taken up dispatched labor hiring practices
with gusto, this is unusual indeed.
Though this blog is meant to conclude,
for now, our series on Foxconn as we move to address problems in the United
States, we feel we must remark that there has also been a recent boom of
contingent labor in America. The Chicago Tribune reported on August 12 that the contingent labor force now accounts for 10
percent of the nation's workforce and is growing (5). While China’s working conditions are, arguably,
worse than those experienced in the U.S., the United States Department of Labor
succinctly points out, “current tax, labor and employment law
gives employers and employees incentives to create contingent relationships not
for the sake of flexibility or efficiency but in order to evade their legal
obligations” (6).
Similar
to what we see in China, American companies use contingent labor to save money
by not having to make contributions to Social Security, unemployment insurance,
workers' compensation, health insurance, withholding, and are relieved of
responsibility to the worker under labor and employment laws (6). Though this
type of employment is less desirable to American workers and offers little to
no job security, it has become increasingly acceptable in the face of
unemployment.
Nice blog for Labour Hire Companies.
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