BEIJING--A major footwear maker in southern China on Thursday
offered to make disputed social-insurance payments to settle a
four-day strike that had disrupted production at the key supplier
for some of the world's best known shoe brands.
Executives at Yue Yuen Industrial (Holdings) didn't say how much
the payments would cost, though an independent labor group said
they could total 100 million-200 million yuan ($16 million-$32
million) if they involve many years of back payments.
"The basic principle is that today we've promised our employees
to make a delayed payment to social insurance and the housing
fund," George Liu, executive director of Yue Yuen Industrial, told
The Wall Street Journal. "The move will affect a large number of
employees, so we'll have to work with local government agencies to
work out the details, and that takes time."
Some of the employees at Yue Yuen Industrial in Dongguan,
Guangdong province, walked off the job on Monday in a dispute
centered on levels of social-insurance coverage.
It was unclear how many workers joined the strike, but Hong
Kong-listed Yue Yuen employs more than 40,000 workers at its
Dongguan facilities and is a supplier for Adidas AG and Nike
Inc.
Workers said the company has been making social insurance
contributions based on basic wages rather than total pay as
required by law.
At least one employee was skeptical about the latest offer from
the company. The worker, who gave his surname as Li and said he was
38 years old, said his monthly salary is about 3,500 yuan, but
payments to his social insurance were based on income of 1,810
yuan.
Yue Yuen's Mr. Liu said he couldn't estimate of how much would
be paid out because workers would have to top up their own
contributions to the social insurance fund and may choose not to
make those payments.
The worker Mr. Li, who has been employed at the company for 18
years, said he and others would be unable to pay their share of the
social insurance contribution under the latest plan. "Our salary is
low, and we have to support our family. How do they expect us to
take tens of thousands of yuan out of our pocket?"
Yue Yuen's payments could be more than 100 million-200 million
yuan since it owes contributions to a social insurance, as well as
a housing fund, for more than a decade, said Zhang Zhiru, director
of the not-for-profit Shenzhen Spring Breeze Labour Disputes
Service Centre.
The walkout at Yue Yuen is the first large-scale strike in which
workers asked for better social security benefits, the labor-right
activist said. In the past China's workers pushed hard for higher
wages and overtime compensation, but as larger numbers of laborers
approach retirement age they have begun to place greater importance
on having a social safety net, Mr. Zhang said.
The average age of the workers in China in 2012 was 37.3 years
old. Workers age 16 to 30 accounted for 36.8% of the total in 2012,
down from 39% in 2011, the National Bureau of Statistics said in an
annual survey released in May last year.
The Dongguan Social Security Department couldn't be reached for
comment, and an official of the Dongguan Federation of Trade Union
said it didn't have any immediate comment.
Mr. Liu, the Yue Yuen executive, said that not all of the
company's production had been affected by the dispute but that
there had been significant disruption. "We will do this (make the
back payments) according to all government regulations," he said.
"We hope and need the employees to go back to work."
--Liyan Qi
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