1. Internal meeting of the employee representatives from China and Germany

Lothar Adler, chairman of the German central works council, stressed the importance of the first cluster meeting at Siemens in accordance with the International Framework Agreement that has been signed last year. Vice-chairman Birgit Steinborn presented the structure of the employee representation at German and European level, the focal points of the German Central Works Council of Siemens and the various tasks of union and Works Council in Germany.

In the discussion on the International Framework Agreement, the Chinese participants of the meeting expressed that they were informed about the agreement only with the invitation to the cluster-meeting. They see the agreement as a possible support in their collective bargaining, which some previously felt to be unsatisfactory.

Professor He Chao Gao from Sun Yat-Sen University in Guangzhou gave a presentation on the latest developments in the Chinese trade unions, particularly on the subjects of strike, the right to strike and collective bargaining. The presentation of the Chinese participants of the meeting made clear that contacts among them had previously existed only in exceptional cases. The meeting was so far very much welcomed.

For virtually all companies represented at the meeting, there are collective agreements. The Chinese participants see both their quality and the process of the negotiations very critical. In general, the trade union committees are elected, the election takes place indirectly through elected delegates of the workforce.

One of the problems of the union representatives is not having sufficient time for trade union work because in most companies there are no exemptions from their other work for the union representatives. On the other side, it was also clear there are fears that the union work will lead to a professional dead end.
The union representatives described difficulties in complying with the statutory working time regulations, because the workers need to supplement their low wages with regular overtime.

2. Meeting of the employee representatives with the Human Resources Director of Siemens, Mrs. Ederer, and the representatives of the management of Siemens China

Participants from the employer’s side were Brigitte Ederer (Human Resources Director of Siemens), Mei Weng Chen (Cluster CEO), Bernd Euler (Cluster CFO), Ma Qing (Cluster HR Director), Robert Sikellis (Siemens Counsellor Asia), Martin Naser (CHR Munich), Gonzalo Ruiz Calavera (HR Head Cluster ASEAN / South Korea), Jing Li (Legal Advisor of Siemens China) and as a guest Dr. Iris Duchetsmann (Partner Eversheds LLP).

- Presentations by Mrs. Ederer and the representatives of the management of Siemens China: Mrs. Ederer presented the International Framework Agreement that has been agreed on in July 2012. Then she explained the business situation at Siemens and the current program to increase productivity and profitability. She stressed the growing importance of China for the Siemens business and described the recruitment and further development of qualified staff as the central challenge for Siemens in China.

Mr. Mei Weng Chen gave an overview of the Siemens activities in China. He also stressed the importance of good cooperation with the political leadership in China. He pointed out that China has a share of 8% of Siemens’ global business, but 10-15% of the profit. He sees the too slow expansion of research and development activities at Siemens China as critical.

Mrs. Ma Qing presented the activities of Siemens China in the recruitment of staff as well as in training and safety at work. She pointed out that in China, the number of court discharged conflicts in the workplace increases sharply and the government wants to strengthen the role of trade unions. At Siemens China, there are currently 45 company trade union organizations in 18 locations.

Discussion of the Chinese union representatives with the representatives of the management

In the discussion the following points were addressed and answered:

-  Active implementation of the International Framework Agreement at Siemens China: It was stated that the framework agreement is still very new and for this reason there have been no activities yet.
-  Exemptions for union work: It was pointed out that according to Chinese law an exemption for the union president in operations with at least 200 employees is possible. A return to the old job in the event of termination of trade union activities or non-re-election is difficult in any case. Therefore it is suggested rather to support the union work by some staff what is possible under the law.
-  For the union representatives unsatisfactory bargaining with inadequate results; confusion about the role of centralized guidelines for local bargaining. The management commented that central requirements would represent only a frame and there could be differentiations within each site. Birgit Steinborn proposed the establishment of an escalation mechanism for the collective bargaining process within which the central level can be used to reach an agreement.
-  Inadequate wages, lack of opportunities for professional development and lack of respect for the workers at Siemens China, as a result threaten strikes and migration (at some Siemens companies in Shanghai strikes already have taken place). It was noted that the staff turnover at Siemens in China is far lower than the national average.
There is a pay scale for workers at Siemens China, which is applicable but can be differentiated locally. Positive local solutions can be seen, which also provide worker’s advancement and opportunities for development.

Basically, it was pointed out by the representatives of the management at several points in the discussion, that the individual companies of Siemens in China are legally independent entities and therefore many problems could be solved only locally.

Lecture by Dr. Duchetsmann on labor law in China

Dr. Duchetsmann pointed out that labor law in China has been a subject to numerous changes in recent years, especially since 2008. Also there are differing legal regulations at provincial and district levels. She outlined the following points:

Minimum wages:
Regionally differentiated, in recent years increased by 10% / year.

Employment contracts:
Mandatory since 2008. In the absence of an employment contract employees may require double salary of their former employer after termination of their employment. The contracts must meet content requirements, clear job descriptions are required. Also important is the production of a manual (similar to the “work order” in Germany) for the employees. Traditionally, labor contracts in China are limited; since 2008 multiple-limited contracts are limited, and a claim to a permanent contract may arise.

Working time:
8 hours / day, 40 hours / week.
Overtime work is limited by law to a maximum of 36 hours / month. For overtime supplements are to be paid (at least 50%). The problem is that overtime work especially of workers is often required to improve the incomes. Therefore, the authorities practically do not interfere here. For employees in management positions exemptions from the limitations can be granted. The regulatory competence in working time issues slowly is going over to trade unions and managements, as the statutory provisions do not apply in many cases.

Holiday:
Maximum of 15 days / year, but there are 11 statutory holidays / year, which will be made up during the week, if they fall on a weekend.

Exemption claims:
Inter alia 3-7 days for own wedding; maternity leave: 98 days.

Continued payment of wages in case of sick leave:
Different regulations; 60-100% of the income will continue to be paid.

Social Security:
For example in Shanghai, the employers have to pay 22% of the income of an employee to the pension scheme, 12% to the health insurance, 1.7% to the unemployment insurance system and 0.8% to the pregnancy insurance.
The employees pay 11% of their income towards the social security system.

Right of termination of working contracts:
There are operational, behavioral and personal layoffs possible.
The redundancies are to be justified in each case and there is usually the obligation to pay severance of 1 month income / employment year.
When layoffs of 10% of the workforce or 20 employees are planned, the union has a right to be heard. Wrongful dismissal may be filed within 1 year after the employment relationship is terminated, usually settlements in arbitration are made.

Unions:
The company unions are members of the All-China Federation of Trade Unions, which has a "horizontal" organizational structure, i.e., the classification is by region to the city or even the industrial area level. There are currently about 2.3-2.4 million operating unions. The establishment of a union is possible at any time. The tasks of the trade unions are to represent the interests of employees, to monitor compliance with the laws, the information of employees and since 2008 also the conclusion of collective agreements, and participation in the creation of the work rules and in the case of redundancies.

3. Internal closing meeting of employee representatives from China and Germany

Harald Kern, chairman of Siemens Europe Committee (SEC) announced the disclosure of the addresses of all participants to all. It should be sought to have annual meetings of the union representatives from Siemens China. Dr. Zhang Li, Meng Er Ping and Shen Ming Hua were elected as coordinators.

Dr. Zhang Li suggested the creation of a training program for Chinese trade union representatives. Harald Kern announced the expansion of the "Siemens Dialogue" on international issues which can be used for other exchanges.

4. The way forward

- Request from Friedrich-Ebert-Stiftung for supporting the qualification on negotiating of the Chinese trade union representatives

- Support for the three colleagues inside the "control group" of Chinese trade union representatives with their activities

- Support for the establishment of regular meetings with the management of Siemens China

- Sending the contact information of the participants of the cluster meeting