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Legal Aid, Labor Law Remedies and Industrial Relations in China
By EARL V. BROWN, JR.

I attempt here, as a worker rights lawyer now working with Chinese counterparts, to assess the People's Republic of China's (PRC) effort to enforce its labor standards by legal aid furnished through the private bar, legal aid societies and clinics, and mass organizations. This creative experiment in delivering social justice to industrial workers in the PRC's burgeoning private sector has great merit and should be supported. But legal aid has limitations as a means of holding private employers to labor standards or adjusting interests and disputes in private industry.

A generation ago, the PRC had no private bar (and few government lawyers), and only a handful of private enterprises (to function as fronts and provide foreign exchange.) Urban and industrial life centered on the danwei, the state workplace. The danwei delivered work and wages, housing and schooling, health care and recreation, and took care of aged workers. Movement through life and society required affiliations with a danwei (and documents reflecting that status). These affiliations were the important referents; law and contract had little place. The established trade union was largely designed to operate as a parallel management tool in running the social enterprise that was the danwei.(1)

This picture is, of course, greatly over-simplified; but it serves to underscore the enormity of the changes wrought by private industrial enterprise since 1982, when China opened its door to private investment after the devastations of the Cultural Revolution. Now, Mainland China is a vast workshop, with industrial zones housing tens of thousands of factories and employing hundreds of millions of workers, many of whom are young migrants from the impoverished countryside. And, unlike factories in the "West", these new Chinese factories are huge, often with 10,000 workers or more eating and sleeping in one factory compound. One factory canteen I visited served 5,000 at dinner.

This new proletariat understandably views labor law standards as ornamental. There are few effective mechanisms for worker voice in private enterprises. The permitted union institutions remain trapped in their shrinking state enterprise base and are neither experienced or skilled at competing for shop floor allegiance in private industry. Lawyers are few and expensive. Government is the hope of last resort for workers cheated of pay or disabled in unhealthy factories. Local government is, however, often far more beholden to private employers than the labor laws it purports to enforce. Localities may abet employers in firing those workers who complain to labor law enforcement agencies.

Legal Aid
Yet in this industrial relations "Wild West," the PRC national government now requires that each private lawyer undertake a quota of pro bono publico cases each year. The government has also set up regional legal aid bureaus to coordinate the private bar's legal aid cases, to furnish technical assistance, and to handle appeals. This governmental pro bono effort is supplemented by the work of "non-governmental" legal clinics devoted to labor law and women's issues, some affiliated with universities, and by law school clinical training programs.(2) The official trade union and women's organizations on all levels have mounted extensive labor law legal aid programs.

Legal aid in China also embraces law reform. The trade unions and the women's federation have, by statute, a prominent role in changing labor laws and regulations at all levels of government. Academic lawyers are using the traditional devices of letters and petitions in efforts to reform Chinese law as it impacts workers, as vividly shown by a law professors' recent petition challenging the treatment of migrant workers.(3)
All these legal aid programs are driven by idealists and stocked with talent. They have undeniable impact. The industrial issues addressed are fundamental. Labor law cases pursued by legal aid lawyers include such persistent subversions of decent industrial relations as unpaid back wages, harassment of migrant workers, brutal discipline, on-the-job harassment, employer constraints on worker mobility and free exit, and denials of safe working environments and industrial-accident compensation. Many are high-impact cases designed to secure decisions that affect labor rights regionally or nationally, and collective cases asserting aggregate claims at relatively high monetary levels.(4)

Lawyers, clinics and legal aid societies also work to raise consciousness of labor laws and worker rights among rank-and-file workers. These lawyers and legal aid workers are protagonists in an expansion of worker-rights consciousness unfolding outside the confines of particular cases. Legal aid centers and clinics routinely dispatch copies of labor laws and regulations via fax to workers with grievances, and hand out pamphlets specifically addressed to rank-and-file workers. They also conduct worker-rights training in parks, on evenings and weekends, and in factory dormitory areas. In-person and phone consultations are offered.

Ordinary Chinese workers are now pointing to faxed legal regulations or pamphlets summarizing labor laws and regulations in their arguments with employers, a development which has resulted in important changes in both the discourse about labor standards and the treatment of workers on the factory level. Legal aid activists engaged in raising rights consciousness among workers at the grassroots level expect that broad dissemination of knowledge about labor law rights will increase "consumer demand" for labor law implementation. A rise in demand, made on governmental regulators, worker representatives, courts and employers will, over time, hopefully compel broader implementation of labor standards.

The emergence of industrial legal aid is important in two respects. First, notions of advocacy are being developed as private lawyers are increasingly allowed to pursue their client's particular interests. Lawyers can begin to function, albeit in a limited fashion, as a vehicle for worker voice in a system that does not permit autonomous unions or other frameworks for direct collective representation. Labor lawyers and legal workers throughout China are now challenging local authorities as well as powerful economic interests in their quest to enforce labor standards. Second, we know from "Western" labor history that rights consciousness and discourse among workers is a preliminary to the emergence of more enduring worker institutions.(5) We should not foreclose the possibility that worker-rights consciousness in China will lead to forms of self-organization.

Yet, legal aid alone can hardly take on the entire burden of industrial relations-enforcing labor law, establishing mechanisms for worker voice, and adjusting industrial disputes. Lawyers, barefoot and licensed, are sparse relative to the density of industrial workers. To compensate for this, an exuberant variety of lay legal workers, paralegals and rights "advocates" now ply their trades. Even counting these paraprofessionals, there are simply not enough trained persons to broadly enforce labor standards via lawsuits or other legal interventions. China, after all, has a huge labor force. Yet there are only about 150,000-200,000 law practitioners.(6) And lawyers are, of course, concentrated in central urban areas, rather than where many factories are located.

The legal aid effort is also thinly funded. As noted, China has devoted public resources to establish a broad system of legal aid. Yet, most legal aid resources are allocated to criminal defense. In a world of scarcity, this means that less is available for civil matters like labor-rights litigation. Labor law must also take its place at the legal aid table with other civil matters like divorce, women's-rights cases and rural land issues. The private bar will never be able to handle labor cases on the scale now required on charitable grounds alone. Practicing lawyers must eat and send children to school. As the number of firms with fee-paying clients grows, pro bono work will inevitably be downgraded and crowded out.

A Reform Agenda
Incentives need to be built into the law of remedies to make the legal system accessible to workers and to motivate private lawyers to take their cases. Chinese labor law reformers may wish to consider elements of the US model, where reasonable legal fees are awarded in meritorious cases as a means of encouraging lawyers to undertake labor rights cases on behalf of workers. These cost-shifting provisions, first widely established in wage, hour and civil rights cases, have a potent double effect.(7)

Fee shifting measures infuse incentives into the private bar's pursuit of labor law cases for indigent workers. They increase the number and types of enforcement cases undertaken privately, thereby broadening the overall enforcement effort. The subsidies also induce more voluntary legal compliance by private employers as employers and their counsel are compelled to consider the legal costs of non-compliance and increasing risks of suit. In short, shifting the costs of legal-system access to employers who violate the law not only puts the cost of labor law compliance where it should be-on the "scofflaw"-but also induces voluntary compliance. Thus, fee shifting contributes greatly to the public good by augmenting the private enforcement of labor law and regulations.

In addition to fee shifting, Chinese labor law reformers should consider recommending statutory fines for employers who commit repeated or egregious labor law violations. A major irritant in Chinese industrial relations is the far too widespread practice of withholding wages due. If labor law is truly intended to harmonize the interests of workers and owners, and not just serve as an ornament, then wages should be paid on time. This principle cannot be credibly disputed. In order to induce broad compliance with this social expectation, fines in the amount of a multiple of the wages withheld and legal fees could be imposed. This penalty would sting the law violator and take away the competitive advantage that violators achieve by underpaying workers and cheating on labor costs.(8)

More generally, those concerned with developing Chinese labor law may want to think about these remedies to remove abusive labor practices from the competitive equation between employers. The logic is simple. Employers who violate basic standards, such as timely payment of minimum wages and overtime for work performed, obtain a competitive labor-cost advantage. This illegally derived advantage rewards the labor-standards violator and undermines the incentive for other employers to comply with the law. Market mechanisms are not able to correct this "downward" dynamic, but rather exacerbate it. The market, unaided, rewards the employer who evades fundamental social norms. The cheat lowers his labor costs and therefore can bring his goods to market more cheaply.

Even uniformly enforced compensatory remedies, such as back pay awards, are not effective in the market. Without shifting the costs of litigation, workers asserting labor rights against employers in a purely compensatory remedial system will never be fully compensated for the violations established. They will only recover what they are owed less their considerable fees and costs. If the gain of the violation, for example, is a dampening of wage demands out of fear of firings and other reprisals by the employer, then the employer wins by his violations even if compensation is later required. Legal disincentives, like fines and fee awards, can counteract this market flaw. Unlike taxpayer- or bar-funded legal aid and administrative regulation, fines and fee awards directly target violators, finance further enforcement, and tend to remove illegal labor-cost competition from the competitive equation.

The independence of the legal profession also needs to be solidified, particularly by disentangling it from obligations that conflict with vigorous advocacy for clients before courts and agencies. Labor lawyers occupy the front lines in the battle for independent advocacy. They need to be authorized to engage in discovery to obtain basic information from employers, and to mount vigorous advocacy for their clients as to both fact and law. And they need to be protected from criminal and other sanctions when they do so.

Then there are the systemic defects in the judicial system-judgments languishing unenforced, and a lack of recognized judicial power to prevent illegality, expense and delay. Without reforms in the overall legal system, legal aid cannot deliver on its promise to workers. Substantive Chinese labor law approaches many international standards. However, courts lack the will to enforce judgments on a national basis. Employers based in one locality escape judgments issued against them in other places. Nor do courts see themselves as empowered to issue orders to prevent serious labor law violations.(9)

But even such enhancements in the range and potency of legal remedies available to Chinese workers will not enable legal aid to keep up with a private sector populated by millions of independent employers, all furiously pursuing their own varied private interests.(10) The data suggests strongly that labor standards are best enforced in unionized shops.(11) Thus, China's private-enterprise world also needs a system of autonomous worker and employer institutions capable of enforcing labor law minimum standards, voicing the grievances and interests of their constituents, and negotiating them out.

The other articles in this Perspectives on Work symposium graphically describe the oppressions suffered by contemporary Chinese industrial workers. As early as 1948, governments around the world were on notice that workers' rights were not just articulations of economic interests but were full-fledged human rights. Workers have the right to "form and join trade unions," and the right to "just and favorable conditions of work [and] remuneration," precisely because such rights are essential to maintaining an "existence worthy of human dignity."(12) It was also understood in 1949 that these substantive human rights entailed, necessarily, concomitant rights to "an effective remedy" for acts violating such fundamental rights.(13) The authors of the accompanying articles show what happens when widespread employer violations of worker rights combine with proscriptions of union autonomy and ineffective legal and administrative remedies.

Unprecedented Change
The pace and scale of the changes manifested in the raw world of Chinese private industry are unprecedented. In one generation, China has vaulted into new stratospheres of "industrialization" and "urbanization." The PRC government responds, as it must, by endeavoring to create industrial-relations institutions and legal structures that took centuries to arrange in the "West."

Wherever one looks in the current Chinese industrial scene, there is the need to jump-start several complimentary institutions all at once. For example, as the private sector emerges dominant, the danwei no longer functions as the vehicle for delivering social security to wage earners and retirees. In its place, China is inaugurating locality-based, pooled social insurance funds (financed, in major part, by employers).
Local authorities must now keep track of innumerable employers and their workforces, ascertain correct contribution amounts, and collect them. To begin delivering benefits to private-sector workers, this new system requires, at a minimum, deployment of accountants, auditors, actuaries, fund investment advisors and administrators, as well as lawyers and courts familiar with social security systems and appropriate investment practices for such funds.

But these professions and institutions are very new in China. As noted, Chinese courts have trouble enforcing judgments and collecting debts generally. Yet, a functioning system of judicial debt collection is necessary to private social insurance. The pace of China's economic change, therefore, suggests that we acknowledge the difficulties of fashioning, instantaneously, a new and complex institutional and legal framework for industrial relations in private industry.

The scale of China's industrialization is equally daunting, impacting more people at once than any comparable wave of factory production in history. In the midst of these astonishing changes, the Chinese legal aid initiative is a positive development. But it is plainly insufficient. Lawyers alone, without autonomous associations of workers and employers, cannot assure legal compliance or the long-term objectives of industrial social justice and stability.

Notes
1. For overviews of China's industrial history and its developing industrial-relations scene, see Taylor, B. Chang, K. and Li, Q., Industrial Relations in China (Cheltenham, UK: Edward Elgar 2003); and Hong, S. and Warner, M. China's Trade Unions and Management (New York: St. Martin's Press, 1998).
2. By the term "non-governmental" organizations, I merely mean organizations that are not direct arms of the government. There are few truly non-governmental organizations in the non-profit world in China.
3. Measures on Migrants and Vagrants, promulgated by the State Council on June 18, 2003 (effective August 1, 2003).
4. Liebman, B. J. 1999. "Legal Aid and Public Interest Law in China," Texas International Law Journal Vol. 34 (Spring), p. 211.
5. Forbath, W. E. 1991. Law and the Shaping of the American Labor Movement, (Cambridge, MA: Harvard University Press), pp. 59-98.
6. Brooks, R. and Ran, T. China's Labor Market Performance and Challenges, IMF Working Paper, WP/03/210 (Nov. 2003) (Table I (workers)); Lawyers in China (Lawyers Committee for Human Rights, New York 1998), pp. i-ii.
7. Title VII of the American 1964 Civil Rights Act, which forbids job discrimination, inter alia, on the basis of race and gender, provides for judicial award of reasonable legal fees and costs to plaintiffs in job discrimination cases. The Fair Labor Standards Act of 1938 ("FLSA"), establishing standards for wages and hours worked, also provides for fee awards-and, in the case of repeat violators, double recoveries (i.e., fines). The Equal Pay Act (requiring that men and women performing the same work be paid the same) is part of the FLSA and has all its remedies. See Christianburg Garment Co. v. EEOC, 434 U.S. 412 (1978), which reviews the general U.S. rule that each side should bear its own costs and fees in addition to the fee-shifting features of some labor and civil rights legislation.
8. Amendments in 1991 to the U.S. federal job discrimination legislation, providing for fees and fines in the form of punitive damages-and penalty and fee shifting provisions of the FLSA-are widely viewed as enhancing compliance with the relevant labor standards. The enhanced 1991 Civil Rights Act remedies were adopted precisely to overcome defects apparent in the Act's purely compensatory remedies. See, for example, Perritt, H. H., The Civil Rights Act of 1991 (Boston: Wiley Law Publications, 1992).
9. See "Enforcement of Civil Judgments: Harder than Reaching the Sky," China Law And Governance Review, Issue No. 2, June 2004, www.chinareview.info; and Clarke, D. C., "The Execution of Civil Judgments in China," China Quarterly 141 (1995), pp. 65-81.
10. I make this argument taking into consideration the impact of other enforcement agencies, such as mass organizations and government labor bureaus.
11. See Freeman, R. and Medoff, J., What Do Unions Do? (New York: Basic Books, 1984); and Aidt, T. and Tzannatos, Z., Unions and Collective Bargaining: Economic Effects in a Global Environment (Washington, DC: The World Bank, 2002), pp. 26-38.
12. Article 23, Universal Declaration of Human Rights, G.A. Res. 217A (III), 10 December 1948, 3 United Nations GOAR Supp. (No. 11A) 71, U.N. Doc. A/810, 7 (1948).
13. Id., Article. 8, 1949.

EARL V. BROWN, Jr. is an American trade union and worker rights lawyer, and has represented major US industrial unions, including the Mine Workers and Teamsters, since 1976 in litigation and bargaining. He has served as General Counsel of the Teamsters and now works on enhancing labor law enforcement in East and South East Asia for the American Center of International Labor Solidarity.

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