The ongoing dispute at shoe maker Yue Yuen has taken another turn after Chinese officials said the factory must provide back pay for past unpaid social insurance to workers who have been on strike for the past 11 days.

The response, which features in an official document released by the Dongguan City Union, creates an important precedent, according to observers, since unpaid social insurance is a pervasive issue in most Chinese factories - including suppliers to major international brand companies.

According to Li Qiang, executive director at China Labor Watch (CLW): "This official document explains that according to law, a factory must reimburse social insurance as long as workers demand it. This rule is applicable to all companies that have not fully paid workers' social insurance."

Despite the positive response from both the union and government officials, it remains to be seen if these measures are fully implemented, the labour rights group says.

Workers at the Taiwanese-owned shoe factory in Gaobu Town, Dongguan City, Guangdong Province, have been on strike since 14 April. Their demands started with calls for back-pay for past unpaid social insurance, but have since escalated to include a 30% pay rise.

The dispute involves thousands of workers making footwear for brands such as Adidas, Nike, and Timberland, and has become China's largest worker strike in recent history. All 15,000 workers in Yue Yuen's Old Number Three Facility, which mainly makes products for Nike, are on strike.

According to CLW, some workers in other facilities have returned to work while others continue to carry out a work stoppage on their production lines.

However, because some facilities have locked the doors and restrict workers from leaving after they clock in, it says it is difficult to put an accurate figure on the number of people taking part in the dispute.

Yue Yuen last week said it would adjust its social security payment plan from 1 May. But the company's management are also said to have warned that if workers do not return to work they may be fired after three days' absence.

Workers making Adidas products told CLW that some Adidas orders had been transferred to Fujian Province while others have been sent to Qingyuan in Guangdong Province. However Adidas told just-style it is not pulling out of the factory and has no plans to do so.

A Nike spokesperson said it was continuing to monitor the dialogue.

Hong Kong-based advocacy group Globalization Monitor has urged brands sourcing from the striking factory to intervene and uphold their corporate social responsibility.