Wal-Mart Stores Inc. has won a landmark arbitration suit in China, brought on behalf of employees by that country’s only official trade union, but the news may not be all good for the retail giant.
According to an article in the Financial Times Thursday, the labor dispute galvanized the normally passive All China Federation of Trade Unions. In the past the union has usually urged employees to compromise with management rather than fight.
But this time, the story said, the “dispute has attracted global attention in large part because of the unusually pugnacious approach taken” by the store’s union branch.
The union’s website appears not to have been updated since 2011. It is considered the largest trade union in the world with 134 million members.
The involvement of the union’s head, Huang Xingguo, in the suit has sparked workers’ rights groups across the country and marked a “significant development” in China’s labor movement, the news story added.
A Reuters article Thursday agreed, saying labor activists, scholars and lawyers were closely following the case because of the union’s aggressive stance.
The dispute arose after Wal-Mart closed a store in central Hunan province, laying off 130 employees. Although the company paid severance packages, 69 workers complained of inadequate notice and compensation. Wal-Mart insisted it had followed the law.
During a two-day hearing in May, Huang and other legal activists went up against lawyers from King & Wood Mallesons, a Beijing law firm representing Wal-Mart.
While the arbitration panel considered the case, local government officials reportedly visited workers’ homes and pressured them to accept Wal-Mart’s offer. All but 18 workers dropped their claims.
On June 25 the arbitration panel dismissed the case.
“We’re not celebrating here but we think it’s the right decision,” Ray Bracy, a senior Wal-Mart executive, told the Financial Times. “We always felt we were doing what was right and what was required by law.”
Huang expressed disappointment over the ruling and said the workers would appeal. They have 15 days to file.
“I feel like workers will always be at the bottom rung in the face of capital, the government and the union, and we will always have a weak voice,” Huang told Reuters.
According to a Wal-Mart China website, the company operates more than 400 stores in China, in some 170 cities, plus seven distribution centers and nine fresh products distribution centers. It employs about 90,000 workers across China.
The company said it plans to open 110 new facilities in the country in the next two years, creating 19,000 new retail jobs.