China-Wal-Mart and the unions.

CHINA-WAL-MART AND THE UNIONS.

Wal-Mart Stores Inc.’s plans to restructure its large Chinese work force hit a stumbling block amid objections from China ’s powerful state-backed trade union, the All-China Federation of Trade Unions.

Wal-Mart’s restructuring move, announced last week, trims off a level of management, affecting 2.5%, or 1,400 of its employees, who are being asked to relocate to other store outlets, or face pay cuts.

The move angered local union leaders, who are asking Wal-Mart to hold off implementing the plan. They are also requesting meetings between trade union officials and Wal-Mart representatives.

"Wal-Mart should consult with labor unions and the employees who are involved, instead of using such a tough way," said Yang Fengzhi, a union leader in Changchun , the capital of Jilin province in northeastern China .

In an email response, Wal-Mart spokesman Jonathan Dong said, "We have kept and will continue to keep both the unions and local governments informed of our plans." He added, "The communication with the associates and their understanding of the program has been good, and we are confident of their support."

Wal-Mart’s restructuring plans could lead to a tussle between the world’s largest retailer, which has historically resisted organized labor efforts in the U.S. , and China ’s nascent labor movement, empowered by stronger labor laws implemented last year. The new laws have led to a flurry of lawsuits by laid-off employees against their former companies.

Wal-Mart employees’ unionization in China is considered a landmark of sorts. While Wal-Mart employees are organized in some other parts of the world, these unions were primarily inherited through acquisitions that Wal-Mart made. "Meanwhile, following strong pressure from the government, Wal-Mart allowed a union to be formed in China in 2006, though union leaders outside China have questioned the Chinese trade unions’ independence from the government.

The new laws require companies to consult trade unions a month in advance before implementing large-scale layoffs. In many cases, the new laws also require employers to pay higher job termination costs. Wal-Mart insists its restructuring moves do not constitute layoffs. "The purpose of this voluntary redeployment program is to support the company’s robust growth plan in China . We need the talent, experience and expertise of our associates as we expand into new areas. It also provides associates with enormous professional growth opportunities," said Mr. Dong.

Despite the global financial crisis, Wal-Mart has continued to expand in China , one of its fastest growing markets. It has opened 23 stores in the country so far this year. Last year, it opened a total of 30 stores.

As of March 31, the company had 246 retail units in China , including Wal-Mart supercenters; bulk discounter Sam’s Club stores; and Trust-Mart hypermarkets, a Taiwanese chain in which Wal-Mart took a 35% stake two years ago. Wal-Mart has more than 54,000 employees in China , not including workers at Trust-Mart.