Wal-Mart in China faces employee protests

BEIJING -- Wal-Mart faces protests by employees in China over what they say is a drastic change in work schedules, as the company overhauls its struggling business amid an economic slowdown and competition from e-commerce.

Weakening demand for traditional retailers has added to trouble for Wal-Mart Stores Inc., which has experienced slow and uneven growth since its first China outlet opened in 1996.

It tried to expand into online retailing but sold its operation last month to China's No. 2 e-commerce operator.

Its labor tensions reflect rising expectations among workers to share in China's prosperity and a shift by the ruling Communist Party away from treating them only as a source of labor toward trying to create a consumer society.

Employees said Wal-Mart wants them to work 11-hour shifts on weekends and as little as four hours on weekdays under a system it began to roll out in June. Some said that might result in lower pay and interfere with their ability to work second jobs.

Two weeks ago, staff members protested for two days outside Wal-Mart stores in the cities of Nanchang and Shenzhen in southern China, Chengdu in the west and Harbin in the northeast, according to employees and two labor-rights groups.

More than half the Nanchang store's workforce of 200 employees took part, according to an employee. Some carried banners that said, "Wal-Mart workers stand up and oppose fraud."

In a written response to questions, Wal-Mart said it is "planning a series of initiatives to enhance and upgrade Walmart China's overall talent-management system."

The company didn't answer questions about how scheduling and working conditions would change or how the protests affected its operations.

"We have communicated with Walmart China associates, and a majority of associates support the new system," the statement said, using the company's term for its employees. "For those associates who need additional information, we are communicating with them on a consistent basis."

Wal-Mart faced similar criticism in the United States over its "just in time" scheduling system, which employees said changed work hours at short notice and reduced pay for some. The company said in February its U.S. stores would switch to allowing employees the option of working fixed hours or putting together schedules in two-week blocks.

In contrast to its American operations, Wal-Mart's Chinese workforce of 100,000 is represented by unions, though employees complain those Communist Party-controlled groups often side with companies instead of pushing for better wages and working conditions.

Wal-Mart was one of the highest-profile targets of a 2006 campaign led by the ruling party to have the country's umbrella labor group, the All-China Federation of Trade Unions, set up unions at foreign companies.

Managers presented the new scheduling system in May and encouraged employees to sign new contracts to authorize the change, according to employees. Under Chinese law, full-time employees work under two-year contracts.

"The workload is very heavy because we have to stand for 11 hours," said another employee of the Nanchang store, who asked not to be identified by name for fear of trouble with the company or Chinese authorities. "All the employees felt it was too difficult and were very unhappy."

Employees were told they could keep working under previous contracts if they wanted, but those who did so found their paychecks were smaller because meal subsidies and other payments were eliminated, according to the employee in Nanchang.

An activist group, China Labor Watch, said employees were pressured to sign the contracts by being told they could not leave meetings where the new system was announced until they did.

Wal-Mart did not respond to a question about whether that happened.

Employees expressed concern the system could be abused to induce unwanted workers to quit by giving them awkward shifts, eliminating the need to pay severance.

Traditional retailers have been battered as Chinese shoppers shift to shopping online. Total retail sales rose 10 percent in May compared with a year earlier, but that was down from 13 percent in 2014. Meanwhile, online commerce grew by more than 30 percent.

Wal-Mart, headquartered in Bentonville, Arkansas, has expanded to 433 stores in China, but that is less than one-tenth as many as its 4,655 outlets in the United States.

Wal-Mart bought a stake in online retailer Yihaodian in 2011 and took full control last year. But after gaining a market share of just 1.6 percent, it gave up last month and turned over ownership to JD.com. In exchange, it got a 5 percent stake in the Chinese company.

Phone calls last week to ACFTU branches in Nanchang, Chengdu and Shenzhen weren't answered.

Frustration among Wal-Mart employees with the ACFTU prompted some to start an informal group called the Wal-Mart Chinese Employee Fellowship in 2014, according to Zhang Jun, who said he was a spokesman for the group. He worked as an electrician at a Wal-Mart in the eastern city of Yantai from 2011 until last December.

The group's 20,000 members -- about 20 percent of Wal-Mart's China workforce -- use social media to communicate, according to Zhang.

They divide themselves into small groups in line with regulations aimed at suppressing dissent by limiting the number of accounts that can be linked together.

Authorities have investigated whether the group received money from foreign organizations, according to China Labour Bulletin, a research group in Hong Kong.

On Wednesday, employees expressed concern Wal-Mart's new system would make them part-time workers who would not be entitled to compensation in the event of layoffs.

A cashier who has worked at the Nanchang store for more than five years said her monthly pay of about 1,400 to 1,600 yuan ($215 to $245) has fallen by about 74 yuan ($11) under the new system. The legal minimum monthly wage in Nanchang, the capital of Jiangxi province, is 1,530 yuan ($235).

Employees are unlikely to get a raise in the next few years, said the cashier, who asked not to be identified by name for fear of retaliation.

"What worries us more is that they are preparing for the future," said the cashier. "Will we be cut off in the future and get no compensation, like the part-time workers?"