Labor court cases in Pearl River Delta area rise as industrial growth rate slows

Four senior managers have been confined in a plant by workers for more than four days over unpaid wages in Huizhou, Guangdong province, prompting concerns over rising labor disputes in the Pearl River Delta region.

Company sources with Shanghai-based Zhongji Pile Industry Co said five managers were on a business trip to a subsidiary manufacturing base in Huizhou but had been confined by dozens of workers in the office since Sunday.

As of 9 am on Thursday, four of them were still "illegally detained" and their basic living necessities could not be guaranteed, according to an announcement by the company.

Workers at the factory told Southern Metropolis Daily that they were owed at least 1.2 million yuan ($195,000) in unpaid wages dating back to April, after the Shanghai-based company decided to transfer all shares of the Huizhou factory to another Guangdong-based company.

"We are afraid of being sacked after the factory is transferred. So we are asking for back pay and also other compensation," a worker who declined to be named told the Guangzhou-based newspaper.

In response to workers' demands, the company said in its announcement that labor contracts with all workers will remain valid after the factory is transferred, adding their salaries will be paid in accordance with the contracts.

"The company has made some concessions to workers but the four managers are still illegally detained. We are calling on the local government to take effective measures to protect the managers' safety and safeguard social security," the announcement said.

The Shanghai-based company is one of the leading centrifugal square pile manufacturers in China. It has more than 30 subsidiary factories across the nation.

The case has aroused concerns over the rising number of labor disputes in the Pearl River Delta region, a major manufacturing base, following industrial upgrading and transformations.

Wang Chuanghui, deputy director of the research department of Dongguan Intermediate People's Court, said labor disputes heard by the court rose by about 10 percent year-on-year in the first half of the year.

"More cases have been solved in labor arbitration centers, given that closures of some processing businesses recently have resulted in a growing number of labor disputes," Wang said.

Authorities in Guangdong, a major traditional manufacturing base in South China, have made great efforts to upgrade industries in recent years.

"The industrial upgrading, to some degree, will result in more labor disputes in the near future, as workers have become more worried about their own interests following business closures," said He Gaochao, a professor at the School of Government of Sun Yat-sen University.

China's lower industrial activity since early this year, partly due to weak demand from overseas markets and rising production costs, has added more pressure for businesses in the Pearl River Delta region.

"It (lower industrial activity) will further force some businesses in the delta region to cut workers, which can easily lead to labor disputes," He said.

China's Purchasing Managers' Index, or PMI, a gauge that mainly indicates operating conditions in the manufacturing sector, slipped to a four-month low of 50.1 from 50.8 in May, the National Bureau of Statistics reported on Monday.

The lower index was seen by many industrial insiders as a sign of a slower-than-ever growth rate during structural reforms to the economy.

According to Xinhua News Agency report, labor disputes have been frequent in manufacturing businesses in China in recent years.

Last year, some 218,000 labor disputes were investigated by labor inspection authorities across China, a 5 percent rise year-on-year, according to the report.

The wages of some 6.2 million workers across the nation were delayed in 2012, an increase of 16.7 percent year-on-year, the report said. "A growing number of labor disputes will affect social security if they are not properly dealt with," He said.

Shi Yingying in Shanghai contributed to this story.