China CSR is reporting that Wal-Mart has signed collective bargaining contracts with Chinese labor unions representing 108 retail stores.
Zhang Jianguo, director of the contract department of the All China Federation of Trade Unions, announced
that Wal-Mart's contracts will regulate issues such as the proportion of wage growth in 2008, wage standards, and the frequency and method that the wages will be paid.
The contract also lays out a formal plan by which Wal-Mart and labor unions will meet each December to discuss the wage growth rate for the upcoming year. Among other items, the contracts include terms concerning paid vacations, social security, payment of overtime and provisions for the protection of female workers.
After hearing about the contract settlements in China, American labor unions expressed hope that Wal-Mart would be open to the unionization of its stores in the U.S. That excitement, however, will be short lived.
The reason Wal-Mart allowed its associates to unionize was due to the amount of pressure the All China Federation of Trade Unions placed on the retail juggernaut. Chinese law states "that establishing a union is a voluntary action of associates."
Wal-Mart realized that sometimes you have to play along in order to get along.
It made financial, political and social sense for Wal-Mart to allow itself to be organized by the All China Federation. Not only does it represent over 123 million workers, the All China Federation has monopolized the labor market due to the fact that China has banned independent unions. On paper it seems as though Wal-Mart has allowed itself to be unionized by multiple labor unions. The reality is that Wal-Mart will only deal with the All China Federation, a wise move considering Wal-Mart's plans to expand even further throughout China.