In China, all trade unions must be affiliated with the All-China Federation of Trade Union (ACFTU) and there is no independent trade union. ACFTU is a national-level organisation that reports directly to the Chinese Communist Party and has branches at the provincial, city, and district levels. Technically speaking, an enterprise does not need to take positive action to establish a trade union. 

As for the employer’s organisations, China Enterprise Confederation (CEC) and China Enterprise Directors Association ( ECDA) have legal person status and are created to promote reforms within enterprises, improve management within enterprises, act as a liaison between enterprises and governments and protect the legitimate rights and interests of enterprises and entrepreneurs. CEC is the sole representative of China within the International Organization of Employers. The number of enterprises with management associations has reached hundreds of thousands. These various associations comprise an interconnected national system of management associations.

See also: Employee Data Security and Protection in China

Rights of trade union and employers associations 

The fundamental rights and responsibility of trade unions is to safeguard the legal rights and interests of employees. Specifically, trade unions should fulfil three responsibilities, defined as follows: 

• harmonize employment relationships and safeguard the rights and interests of employees by conducting equal negotiations for employees and forming collective contracts;
• organize and coordinate employee participation in democratic decision making, democratic management and democratic supervision according to relevant law and via the employee representative congress or other channels; 
• maintain close contact with employees, listen to and forward their views and demands to management, exhibit concern for their daily lives, help them resolve difficulties, and serve them wholeheartedly.

A company might form collective contracts with its trade union. If a union or an elected employee representative submits a written request to engage in collective bargaining, employers cannot refuse without just cause. Collective contracts are binding on employers and all of their employees. Accordingly, individual employment contracts cannot include standards that are lower than those set forth in collective contracts. However, it is possible to use terms in individual employment contracts that are more favourable to employees than what the collective contracts provide.

Read also: How to Calculate an Employee’s Payroll in China? (Part III)