Chinese Authorities Side With Wal-Mart In Labor Dispute

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Wal-Mart Stores, Inc. (NYSE:WMT) has come under increasing fire in the United States due to its low wages and the fact that American taxpayers shell out billions of dollars in welfare aid to the company’s workers. Some claim that taxpayers are essentially subsidizing Wal-Mart’s employees. Wal-Mart has also been under fire in China, but it has won its most recent conflict, this time with union activists.

Union activists in China were looking to force Wal-Mart Stores, Inc. (NYSE:WMT) to pay additional compensation to its employees, apparently due to a store closing. Luckily for the company, an arbitration committee in Changde decided to dismiss the workers demands. A spokesman for Wal-Mart noted that the company follows all Chinese laws and was gladdened by the ruling in their favor.

Most workers settling with Wal-Mart

While the United States generally operates under mutual “at will” laws in which employees and employers can terminate employment agreements without warning and essentially for no reason, most other countries have more strict hiring and firing laws. In many countries, companies are required to notify employees of closings and often must compensate them in the event of a closing.

Workers were apparently upset over a sudden store closure in Changde and claimed that they did not receive the appropriate notification or compensation for the closing. It appears that Wal-Mart Stores, Inc. (NYSE:WMT) offered workers 1 month’s salary plus additional payment for each year worked, in its original settlement. Some 69 employees rejected this offer to settle. Wal-Mart then upped the offer with another 3,000 yuan (about $480 dollars) but 18 workers have refused to settle for this amount.

Representatives for the workers say that they will appeal the decision. They have fifteen days to do so and the labor board allows for two appeals per case. Representatives for the workers claim that the workers are not being fairly compensated.

Despite loss, unions increasingly flexing their muscle

Despite the loss in this most recent case, unions appear to be growing stronger, if anything, in China. Unions in China are closely connected to the Communist Party and in the past have taken a rather apathetic position when dealing with labor issues. Indeed, unions have often sided with employers over employees, even when employees appeared to have grievances.

Now it appears that many union activists are beginning to see things differently. While the workers in the Wal-Mart Stores, Inc. (NYSE:WMT) case appear likely to lose, that the Union even stood up to Wal-Mart and continued to pursue compensation after an initial settlement was offered, suggests that many union leaders will be looking to take a stronger stand.

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