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Pearl River Delta cracks down on fugitive bosses

(Xinhua)
Updated: 2009-03-07 09:52

Pearl River delta cities in south China's Guangdong province are seeking ways to fight bosses who run away while defaulting workers wages amid global financial crisis.

Jiang Daoguang, a 47-year-old migrant worker in Guangzhou, capital of Guangdong province, found his boss disappeared when he and his fellow workers returned to work after the month-long Spring Festival break.

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"He paid us all the wages before the holidays, but according to the (labor) law, the boss should compensate us one month's salary for every year we worked for him. It means I should get 8,800 yuan ($1,257) as I had worked for him for 10 years," Jiang said in a protest.

The bankrupt Dayi Shoes Factory was run by Yang Kunyu, a Taiwanese, in Baiyun District in Guangzhou.

An emergency taskforce was set up by the district government. Talks with worker representatives resulted in 300 yuan of subsidy for each worker. Moreover, the taskforce persuaded two local shoe factories to offer 100 jobs for these workers.

"It usually takes a long time to get back the runaway bosses. The workers can't stand waiting. They demand an immediate settlement," said Wu Weiqiang, a grassroots official of Songzhou Street in Baiyun District.

The Pearl River Delta is densely populated with overseas-invested plants and large groups of migrant workers. "The bosses can easily escape overseas and once they are overseas, mostly back to Taiwan or Hong Kong, it's hard to get them back," Wu said, "The bosses should go through legal procedure if they declare bankruptcy. Consequently, most just disappear and leave all the troubles to us."

In many cases, local governments or equipment renting companies pay workers subsidies, wages or compensation in advance.

"But it's a makeshift method. The government revenue is limited and the renting companies have their own interests. There should be laws to punish the fugitive bosses," Wu said.

Shenzhen, a special economic zone, launched codes to fight against defaulting salary and compensation on June 1, 2008. Each enterprise in Shenzhen is required to hand in 400 yuan a year per worker to the local labor department fund.

It helped pay 25 million yuan in 48 such cases in the fourth quarter last year, said Wu Liyong, director of Shenzhen Labor and Social Security Department.

The special economic zone launched another code on November 1 in 2008 to punish fugitive bosses: those with bad credit will be placed on a blacklist and prevented from bidding for government projects or government procurement. They are not allowed to enjoy preferential policies or register new enterprises for five years in the city.

The pressure caused by fugitive bosses grows as the global financial crisis cut exports from the manufacturing base. Last year, Guangdong, which makes nearly a third of China's exports, experienced its toughest year since the Asian financial crisis a decade ago, with its GDP growth slowing to 10.1 percent from 14.5 percent in 2007, while export growth tumbled to 5.6 percent last year from 22.3 percent in 2007.

In Shenzhen, about 370 enterprises are defaulting workers' wages totaling 102 million yuan for 39,200 workers, according to a survey by Shenzhen Public Security Department at the end of last year.

According to the new national Labor Law, which took effect on January 1 in 2008, the boss has to pay compensation, one month's salary for each year the worker has served for the company, if the company stops hiring the worker.

Many local officials admitted the new Labor Law was great in protecting migrant workers' rights, but it also unleashed a flood of arbitration and labor disputes.

"At the end of 2008, Guangzhou labor department's arbitration cases had been booked to the end of 2009," said Ding Zhiqiang, deputy-head of Guangzhou Stability Maintaining Office.

Most cities want to follow the example of Shenzhen in tackling fugitive bosses.

Dongguan caught about 17 runaway bosses who owed workers wages or compensation since last December, according to Dongguan Stability Maintaining Office.

Chen Shu, secretary general of the Guangzhou Bar Association and a deputy to the National People's Congress (NPC), China's parliament, supports funds to pay workers if their bosses run away. "It's like a kind of insurance. The boss turns in fees every year to cover the risk that he might flee in a financial crisis."

She believes it will not help much to impose legal punishment on fugitive bosses. "Even if you catch them and punish them, where is the money? They still can't pay for it. If they had had enough money, they needn't have closed their factories," said Chen.