BEIJING — In an era where Chinese factory workers are feeling more empowered, labor disputes can sometimes end badly for the boss.

 

Across China, labor analysts have reported an odd new trend during the past two years: disgruntled employees holding factory bosses hostage in exchange for demands on overtime pay and other core issues. One particular case made international headlines last summer when American factory boss Chip Starnes was held captive for six days in his Beijing office during a labor dispute.

Experts say police typically refrain from intervening in such cases, especially when there is no violence involved. But there have been extreme examples in southern China, including bosses who have jumped from factory buildings to escape confinement by workers. It’s all a sign of growing demands for better worker treatment and a potential end of patience for the millions who staff China’s workshop lines.

The “hostage boss” phenomenon has become particularly prevalent in the Pearl River Delta, and especially noticeable in clothing and textile manufacturing, experts say, because workers have grown reactive to bosses closing up and moving shop overnight, leaving unpaid wages and no severance behind. Low-margin industries are notorious for leaving behind unpaid workers, and those workers have begun taking matters into their own hands. In the case of Starnes, his company planned to move its medical-equipment factory to India and workers claimed back wages and further compensation.

Though this odd twist is not exactly new, it may be more noticeable if China’s economy slows further, analysts say.

When workers feel economic times are more desperate, things tend to disintegrate to more severe levels, labor rights groups and business consultants said in recent interviews. As China’s manufacturing sector has slumped significantly in recent years, labor groups have tracked a growing trend in “runaway bosses,” where factory owners and companies leave in the cover of night, with jobless workers and unpaid wages in their wake. Workers fearing runaway bosses might now make them hostage bosses.

Without independent labor unions and with lax enforcement of contract laws, experts say Chinese workers feel compelled to take matters into their own hands, as they did with Starnes.

Dan Harris, a Seattle-based attorney who advises clients seeking to build businesses in China, said he has heard of workers holding their bosses captive in labor disputes since he began doing this work 10 years ago. It is difficult to say whether the trend is rising, said Harris, “but what I can say is that it increases during economic downturns and decreases during economic upturns.”

Harris said risk consultants consistently warn multinational companies doing business in China to be aware of the possibility that workers might resort to force during negotiations and hostage situations are somewhat common. That advice is routinely ignored.

“Americans like to believe that they are different from those who came before them and they like to believe that they ‘can work it out,’” said Harris.

The China Labour Bulletin, a Hong Kong labor advocacy group that tracks workers’ rights and uprisings in China, earlier this month reported on a factory in Huizhou where 100 workers took five managers hostage for five days. Their issue: $200,000 in unpaid wages.

In recent years, Chinese media have highlighted multiple cases in which workers held their bosses against their will, forcing agreements over unpaid wages or, in some cases, demanded more than they were owed.

“Workers’ extreme reactions indicate they don’t trust the company,” Liu Kaiming, who runs an organization for migrant workers in Guangdong province, said. “However, the workers’ behavior is too extreme. They should have a more appropriate way to communicate.”

China’s online community reacted with both shock and support for Starnes and the workers. Still, many admitted that extreme reactions to breakdowns in labor negotiations are simply common in this country.

“American citizens are familiar with layoffs and sometimes get compensation packages,” said one commenter on Weibo, the popular Chinese social network. “Chinese people are very rebellious in these situations.”

Therein lies the problem, said Geoffrey Crothall, communications director with China Labour Bulletin. The government, often in league with management, controls China’s trade unions, therefore the workers do not feel they have good representation during basic contract and wage negotiations. When manufacturing operations restructure or move, factory workers have a sense they might lose everything — because they have all heard tales of the “runaway bosses” who leave workers with nothing.

“I would certainly say workers are becoming more assertive and aware of what they’re legally entitled to,” said Crothall.

Starting from a low position, workers will often attempt to bargain for even more. Desperate company owners feel compelled to pay up, particularly when they get no support from law enforcement and are faced with a lack of independent courts or meditators in China.

“Very often, you’ll see workers in these situations who know exactly what they are owed, but they will demand double or triple the amount,” said Crothall. “Many bosses do end up paying more than the law demands.”

Not all these boss-hostage dramas end as peacefully as that of Starnes. In October 2011, the head of the Guangzhou Jinsheng Clothing Factory was badly injured jumping out of a factory window after being held by workers for three months during a pay dispute. Elsewhere, factory workers have also turned violent on their managers when negotiations break down.

For Crothall and other labor-rights advocates, the answer is simple but unlikely to materialize: better negotiating between management and staff before things unravel into a hostage situation.

“The solution is very obvious,” he said. “The official trade union has to play a much more active role in making sure that workers are properly represented in the workplace and have an ongoing and healthy dialogue with management.”

Until some resolution is reached, factory bosses in China might need to keep an eye out for the risk of becoming a factory hostage should things go sour.

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