Wal-Mart to shut down its out­let in Hangzhou

Clos­ing part of com­pany’s plan to jet­ti­son un­der­per­form­ing stores

China Daily (Canada) - - CHINA - By HE DAN in Bei­jing and YAN YIQI in Hangzhou

Wal-Mart Stores Inc, the world’s largest re­tailer by rev­enue, plans to shut down an­other un­der­per­form­ing store in Hangzhou, Zhe­jiang prov­ince in late April, while a com­pen­sa­tion dis­pute with em­ploy­ees from an in­land store that closed in March re­mains un­solved.

Hu Yinghua, a sales­woman at Wal-Mart’s Zhao­hui store in Hangzhou, said they had a meet­ing on Wed­nes­day af­ter­noon as a for­mal no­tice of the clos­ing of the store by the end of this month.

“The in­for­mal no­ti­fi­ca­tion came on Tues­day night via text mes­sage. We have to choose be­fore April 23 whether to be sent to other Wal-Mart stores in the city, or leave the com­pany with a cer­tain amount of com­pen­sa­tion,” she said.

Hu said up­per-level man­agers ex­plained dur­ing the meet­ing that the clo­sure was strate­gi­cally nec­es­sary.

There were a few cus­tomers at the store on Wed­nes­day, but some shelves were al­ready empty.

Shirley Zhang, me­dia di­rec­tor from Wal-Mart China’s Depart­ment of Cor­po­rate Af­fairs, con­firmed that the store will close on April 23 as a part of the com­pany’s plan of shut­ting down those fail­ing to make a profit.

The multi­na­tional com­pany has opened about 400 stores on the Chi­nese main­land since it en­tered the mar­ket in the mid-1990s. The com­pany de­cided to shut down more than 20 out­lets in China this year be­cause those stores com­prise about 9 per­cent of the to­tal, but have con­trib­uted only 2 to 3 per­cent of the to­tal sales vol­ume from 2013 to date, she said.

“We take these moves to achieve qual­ity of growth, and we think the strat­egy ad­just­ment will help us to bet­ter meet the de­mands of cus­tomers,” she said.

Zhang said the com­pany has tried to make proper ar­range­ments for the em­ploy­ees af­fected by the clo­sures, in­clud­ing al­low­ing them to trans­fer to any out­let in China and sub­si­diz­ing their re­lo­ca­tion ex­penses, in­clud­ing trans­porta­tion and ac­com­mo­da­tions.

How­ever, the com­pany’s re­treat from Changde was not seen as rea­son­able or fair by most of its lo­cal em­ploy­ees. More than 70 out of 135 em­ploy­ees from the store have asked their trade union to seek bet­ter com­pen­sa­tion from the com­pany af­ter Wal-Mart told the work­ers on March 5 that the store would be closed in two weeks.

Huang Xing­guo, chair­man of the Changde store’s trade union, said Wal-Mart did not pro­vide an of­fi­cial no­ti­fi­ca­tion to the trade union in ad­vance for such a vi­tal de­ci­sion as the law stip­u­lates and failed to show due re­spect to its em­ploy­ees.

“The day they an­nounced the clo­sure, em­ploy­ees from other cities ar­rived at the su­per­mar­ket to re­place our work­ers. It was hu­mil­i­at­ing and dis­crim­i­na­tory,” said Huang, whom em­ploy­ees elected as the trade union

What Wal-Mart did is ac­tu­ally a mass lay­off, which re­quires the em­ployer to in­form work­ers one month in ad­vance and lis­ten to the trade union’s sug­ges­tion for staff re­al­lo­ca­tion, which Wal-Mart has failed to do.” CHANG KAI HEAD OF THE SCHOOL OF LA­BOR AND HU­MAN RE­SOURCES AT REN­MIN UNIVER­SITY OF CHINA

chair­man in 2013.

He said the union has asked city au­thor­i­ties for for­mal ar­bi­tra­tion to seek work­ers’ rights in terms of col­lec­tive ne­go­ti­a­tion, higher com­pen­sa­tion for the mass lay­offs, and pay for time not worked dur­ing the dis­pute.

“We ask Wal-Mart to dou­ble the ex­ist­ing com­pen­sa­tion, but that is ne­go­tiable if the com­pany is will­ing to re­sume di­a­logue,” he said. “How­ever, the com­pany is busy re­mov­ing its as­sets and has re­fused di­a­logue since late March.”

Huang said Wal- Mart’s tough stance was backed by in­ap­pro­pri­ate in­ter­ven­tion from the lo­cal govern­ment.

He said the district’s la­bor depart­ment pro­vided writ­ten ma­te­rial to rec­og­nize that Wal-Mart closed its store in Changde legally, and po­lice ar­rested sev­eral work­ers who took part in peace­ful protests on March 21.

A la­bor in­spec­tion of­fi­cial sur­named Tan from Changde’s Wul­ing district, who has been work­ing as a me­di­a­tor in the case, said the sit­u­a­tion is “com­pli­cated” and urged work­ers to re­sort to le­gal chan­nels to de­fend their rights.

Zhang, the me­dia di­rec­tor from Wal-Mart China, de­fended the com­pany’s moves.

“Per­son­ally, I feel sym­pa­thetic to­ward these work­ers and un­der­stand their re­quire­ment for higher com­pen­sa­tion, but our com­pany has to han­dle that in ac­cor­dance with the law,” she said.

But Chang Kai, head of the School of La­bor and Hu­man Re­sources at Ren­min Univer­sity of China who par­tic­i­pated in the leg­is­la­tion work for the La­bor Con­tract Law from 2006 to 2008, be­lieves Wal­Mart lacks le­gal jus­ti­fi­ca­tion for its be­hav­ior.

“The Changde out­let is just a branch of Wal-Mart, so it can’t ter­mi­nate em­ploy­ees’ con­tracts un­der the name of dis­band­ing the en­ter­prise,” he said. Un­der Chi­nese law, the com­pany needs to pro­vide an of­fi­cial res­o­lu­tion from a share­hold­ers meet­ing to le­git­imize its de­ci­sion to end its con­tracts with em­ploy­ees.

“What Wal-Mart did is ac­tu­ally a mass lay­off, which re­quires the em­ployer to in­form work­ers one month in ad­vance and lis­ten to the trade union’s sug­ges­tion for staff re­al­lo­ca­tion, which Wal­Mart has failed to do,” he said.

Chang also said the trade union of Changde’s Wal-Mart seek­ing bet­ter treat­ment for work­ers is sig­nif­i­cant, as it will set an ex­am­ple for sim­i­lar cases in the fu­ture. Con­tact the writ­ers at hedan@ chi­nadaily.com.cn and yany­iqi@chi­nadaily.com.cn. Wang Zhuoqiong con­trib­uted to this story.


A cus­tomer shops at Wal-Mart’s Zhao­hui store in Hangzhou on Tues­day. Wal-Mart, the world’s largest re­tailer by rev­enue, de­cided to shut down more than 20 out­lets in China this year.

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