UNION ACTIVITY ON THE RISE

Amid public fervour over low wages for fast-food workers, labour authorities have taken action in favour of workers. On April 10 2007, The Guangdong Department of Labour and Social Security publicized the results of an investigation into the alleged underpayment of workers by fast-food companies. Officials worked with the All-China Federation of Trade Unions (ACFTU) and concluded that the companies did in fact violate the law. The department said that some companies had not signed compulsory labour contracts with some staff, and that there were cases of staff working overtime longer than the law permitted.

While the report does not name any companies specifically or give details on punishments imposed, it was the first official response since an investigation by local newspaper New Express Daily, which claimed that McDonald's, KFC and Pizza Hut were paying workers Rmb4, Rmb4.7 and Rmb5 per hour, respectively. Guangzhou set its minimum wage at Rmb7.5 per hour for part-time workers starting at the beginning of 2007. The companies have expressed surprise at the allegations, and McDonald's China said in a statement: “Government officials make decisions on local labor laws. That's why we continue to work with local officials to get further clarity on their recently amended labor laws”.

In related news, McDonald's is currently working with ACFTU to allow more unions, starting with those in Guangdong, at its 750 outlets. In 2006, union leaders reached an agreement with Wal-Mart to allow unions in all 62 of its stores. Although unions in China have traditionally been weak and have not been known to fight for higher wages, ACFTU appears to be growing in numbers and strength. Its role in the drafting of the upcoming labour law, which still has not yet been officially announced, may lead to further expansion of the role of unions.