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After completing its investigation, China's top trade union ruled yesterday that McDonald's, KFC and Pizza Hut were guilty of underpaying their staff in the city of Guangzhou, in violation of China's labor laws.

 

The fast-food giants should immediately settle the case by paying the workers in full and retroactively, said Li Shouzhen, a senior official with the All-China Federation of Trade Unions (ACFTU).

 

Speaking at a news briefing in Beijing, Li announced that "a joint investigation by the Guangdong provincial trade union and the labor authorities confirmed media reports about the companies' unlawful practices. The federation will uncompromisingly fight any practice that violates workers' rights."

 

Addressing solutions to the problem, Li stated that ACFTU had instructed its Guangdong branch to negotiate with the companies on behalf of the 3,000-odd part-time workers, most of them college students.

 

The furore was originally kicked up by the New Express newspaper, which set up an undercover sting and revealed that McDonald's, KFC and Pizza Hut in Guangzhou were short-changing their workers by paying them up to 40 percent less of the federally-mandated minimum wage.

 

The southern metropolis passed new regulation in early 2007, setting the minimum wage at 7.5 yuan (97 US$ cents) per hour for part-time workers. McDonald's was found to be paying its workers only 4 yuan (52 cents) per hour, with KFC at 4.7 yuan (61 cents) and Pizza Hut at 5 yuan (65 cents) per hour.

 

A further accusation concerned the relevant restaurants of forcing part-time employees to work full-time without giving them the matching benefits.

 

The ACFTU’s clarion call will have struck fear into any other restaurants guilty of the same crime since trade unions in other provinces, including Hubei, Fujian and Liaoning, moving quickly to start their own investigations, Li revealed.

 

He said the federation and the Ministry of Labor and Social Security will jointly launch a nationwide check next month on payment, minimum wages and labor contracts in enterprises.

 

Li also announced that the federation would also urge foreign companies working in China to set up trade unions, thus offering an appropriate platform for the resolution of disputes.

 

"We are sure that McDonald's and KFC - as world-famous brands - will set a good example," Li said. "At the same time, we believe the event won't delay their process of establishing trade unions."

 

The bosses of the beleaguered fast-food giants have stood behind their employment practices, blaming the labor laws for being too vague.

 

McDonald's has more than 790 restaurants and 50,000 employees on the Chinese mainland and plans to open 100 new restaurants a year.

 

Yum Brands, which relies on its 2,000 KFC, Pizza Hut and Chinese-style East Dawning restaurants in China for close to a third of its worldwide profits, employs over 100,000 staff.

 

(China Daily Xinhua News Agency April 4, 2007)