China Daily, China

McDonald's, KFC Nabbed for 'Four Yuan Scheme'

 

Could it be that the Chinese Communists are finally cracking down on bad working conditions? According to this new report from the state-run China Daily, the government is stepping in to protect the right of workers "to quell the likelihood of unrest and maintain social stability." Naturally, Western companies appear to have been targeted first.

 

By Guo Qiang

 

March 28, 2007

 

China - China Daily - Original Article (English)

What can a part-time Chinese employee of McDonald's afford with an hour of pay?

 

Just two small ice creams valued at four yuan (50 cents).

 

American fast-food giants McDonald's and Kentucky Fried Chicken are being harshly criticized for their work contracts, which offer part-time Chinese employees just four yuan per hour, which is well under state requirements, state media reports.

 

An employee is entitled to no less than 4.3 yuan per work, say rules released by the Guangzhou City government last November. Hourly wages average 7.5 yuan in the city.

 

An unnamed Guangzhou official told the New Express newspaper that the contract violates the legal rights of employees.

 

"Now that the appropriate administrative agencies are aware of the violations, officials will order these enterprises to revamp and compensate the employers for their losses," the source told the paper.

 

"If the infractions are grave enough, a harsher punishment will be handed out."

 

The source also cast doubt on the probation-period for employees implemented by the fast-food giants.

 

"Part-time employees shouldn't need to undergo a one-month probationary period."

 

McDonald's and KFC have nearly 3,000 outlets across the country, with a work force of nearly 200,000, according to state media.

 

Zhu Yongping, a Guangzhou lawyer, has begun to press for the rights of employees. He told the paper that the work contracts have 'seriously violate' the legal rights of employees.

 

Before starting to work there, Ms. A Lin, a McDonald's employee in Guangzhou, regarded the company as a respectable foreign-funded enterprise. But the working experience has changed her mind.

 

"I don't get enough rest. It seems that I was badly exploited."

 

Cui Minghuan, Manager of KFC'S Guangdong market, refuted the claim of rights violations, saying that there is a difference between part-time and non-full time workers, and that minimum hourly pay rates for the non-full-time employees don’t apply to part-time workers.

 

"KFC doesn't breach China's relevant laws."

 

An unnamed official with the Provincial Department of Labor and Social Security labeled Cui's comments, "ridiculous."

 

"What on earth is the difference between part-time and non-full time workers?"

 

The official said that the rule does indeed apply to these part-time employees.

 

McDonald's said in a written statement that, "it is always committed to following China's relevant laws and regulations."

 

CENTRAL GOVERNMENT ACTIONS

 

The report came just days after Chinese Premier Wen Jiabao, in his report to The People's Congress in early March, called for greater efforts at implementing a system of minimum hourly wages to protect worker rights.

 

A minimum wage has the goal of protecting the rights of Chinese workers. For example, Beijing has set a minimum wage of 5500 yuan per month [$710], while the economic hub Shanghai has a minimum wage about 650 yuan [$840].

 

The central government has beefed up efforts to protect the rights of its huge number of employees to quell the likelihood of unrest and maintain social stability.

 

China also plans to adopt an unemployment law to create an unemployment benefit system.

 

The law states that the government will implement new policies, like boosting the training of professionals and increasing the financial investment in employee training.

 

With discrimination in China mushrooming, the draft law strives to provide employment equality. The clause states that discrimination against job seekers with respect to background, ethnicity, gender, religious beliefs, age, or physical disability is prohibited.

 

The government is also acting to create trade unions at foreign-funded enterprises.

 

To date, about 26 percent of China's 150,000 overseas-funded enterprises have established trade unions, with a total membership of 4.29 million, media reports say.

 

McDonald's and KFC are not among those that have set up unions.