By John Ruwitch
SHENZHEN, China (Reuters) - When Wang Yafang was fired from her job at a Walmart in southern China in July 2011 for dishonesty, she refused to sign the termination papers and even showed up at work the next day - only to be sent away.
Wang, 38, then sued Walmart Shen Guo Tou Stores Inc, a Wal-Mart Stores Inc (WMT) subsidiary, for wrongful termination, and beat the world's largest retailer in arbitration and twice in court, winning 48,636 yuan ($7,800) in damages.
Now, she's aiming at an even bigger target: the state-backed All-China Federation of Trade Unions (ACFTU).
In the three decades since China began reforming its economy, its giant state labor union - with upwards of 280 million members - has sat on the sidelines, rarely intervening on behalf of workers in disputes.
In a bid to help change that, Wang, backed by lawyers who have handled some of China's highest-profile labor cases, decided to sue the union branch at the Walmart in Shenzhen where she worked for nine years. Unlike the few previous attempts by workers to sue grassroots union branches, courts have heard Wang's case.
Wang and her team argue that the union endorsed the assessment of her as "dishonest" when she was fired and in doing so damaged her reputation. She wants an apology. The union branch has denied the charges.
Beneath the surface, Wang and her lawyers are leveling a more serious accusation - one echoed by many Chinese workers - that the ACFTU is failing in its role as the protector of worker rights and interests.
The landmark case highlights shifting labor relations in China, where workers increasingly know their rights and are seizing opportunities to challenge the status quo, often in court. Independent unions are banned in China, and the ACFTU is coming under unprecedented pressure to adapt.
Two courts in Shenzhen have already heard Wang's case since she filed the suit last July, and have ruled against her. This month or next, her lawyers plan to launch a final appeal with the Guangdong superior people's court.
"Either way, if she wins or loses, it is already extremely meaningful that this case has been brought to trial," said Shi Zhigang, a former union boss from Nanjing who now acts as a collective bargaining adviser to local union branches.
"It's an amazing development that the courts have even accepted the case and are using Chinese law to make an assessment and evaluation of the union."
MEDICAL LEAVE, HONG KONG TRIP
On July 8, 2011, Wang twisted her back after watering plants at the Xiangmihu Walmart store, one of about 20 Walmarts in Shenzhen, the former cashier from China's western province of Gansu told Reuters.
A doctor at a nearby hospital advised that she take medical leave to July 11, and her leave was approved by Walmart, court documents show. The next day, a Saturday, Wang and a friend crossed into neighboring Hong Kong to attend a labor rights training course at a local university.
She returned to work as scheduled, but near the end of her shift about a week later, on July 18, Wang was summoned by a human resources manager and sacked for "dishonest behavior", having attended the training course during her medical leave.
"I couldn't believe this was really happening," said Wang, who says she was a model worker, never arriving late to work or leaving early. In court documents, her lawyers refer to multiple commendations and awards she won on the job. "I felt that firing me for that reason was groundless. I told them when they fired me that they approved the medical leave."
In the final hearing against Wal-Mart, the Shenzhen Intermediate People's Court ruled that the company had no standard by which to label Wang's behavior "dishonest". It noted, though, that her trip to Hong Kong was "indeed improper" and not in line with the intent of her sick leave.
"SERIOUS VIOLATION"
Wang's case against the union hinges on the specifics of written communications between the company and the acting union chairman, a man named Li Feng, on the day of her dismissal.
Court documents show the company wrote to the union saying Wang was being fired for "serious violations of company policy", but didn't mention "dishonest behavior" or her Hong Kong trip.
The union stamped and returned to the company a separate note stating it received the sacking notification and would provide an opinion on the dismissal by the end of that day, adding that if it didn't, the company could assume it agreed with her dismissal.
In a first hearing, in July at the Futian District Court, the verdict states that Li verbally agreed with the sacking. But at the November appeal in the Shenzhen intermediate court, the union claimed its representative verbally disagreed with the dismissal, and said the union was not given enough time by Wal-Mart to properly investigate and reply regarding Wang.
Both courts ruled that, based on those communications, there was inadequate proof that the union knew about or endorsed the "dishonesty" assessment. There was also no evidence that Wang's reputation had been damaged.
Wang, however, is adamant that Li knew exactly why the company was firing her, but declined to help. She confronted him the day after being fired.
"I told him I didn't want to leave Walmart. I wanted to work there until I retired," she told Reuters near the single-room, ninth-floor walk-up flat where she lives in Shenzhen with her husband and toddler son. "The deputy said: 'It's no use coming to talk to me'."
Wang said Li no longer works at the store, and Reuters' efforts to contact him were unsuccessful.
A Wal-Mart spokesman declined to comment on Wang's case against the union. The Shenzhen municipal branch of the ACFTU did not reply to faxed questions about the case.
CHANCE OF VICTORY
Amid a wave of strikes and other worker actions born of a slowing economy and shifting labor dynamics, some observers see signs that China's leadership wants the ACFTU to change. President Xi Jinping late last year urged the ACFTU to innovate, "adjust to social changes" and do more to protect worker rights.
In a report in February, the China Labour Bulletin, a Hong Kong-based labor rights group, noted that strikes were "often precipitated and aggravated" by the lack of effective unions and the absence of mechanisms for constructive workers-management dialogue.
Courts are reacting, too, said Qiao Jian, a labor relations expert at the China Institute of Industrial Relations. "In recent years, pressure and exhortations on the union from society have grown bigger and bigger, with demands that the union put emphasis on rights protection," he said.
"If there is a demand, you have to provide a judicial means (to meet it) and then provide judicial relief."
In Dongguan, former Nokia (HEX:NOK1V) workers sacked after protests last year have appealed to be able to hold open elections for union leaders - who are typically appointed by company management. And in Hunan province, union heads at a Walmart store that closed are leading several dozen workers in a protest for better severance packages.
"From a legal perspective, there is still a chance of victory," said Duan Yi, one of Wang's lawyers.
Wang now works at a store that sells dried meat snacks. She recently went back to the Xiangmihu Walmart and bumped into a manager there who had been a friend.
"'You have worked hard'," she recalled the manager saying quietly to her, shaking her hand.
"In their hearts the workers and the managers there all support me," she said.
($1 = 6.2580 yuan)
(Editing by Ian Geoghegan)
