Some foreign fast-food chains, including McDonald's, KFC and Pizza Hut, were found to have violated China's labor laws because they underpay part-time workers, according to China's top trade union.
Such violations exist not only at leading companies in the service industry, but also at companies of all sizes.
The All-China Federation of Trade Unions is planning to launch a campaign to investigate the infringements of employees' rights and interests at certain work units. With the campaign, more companies, both domestic and international, will be exposed if any wrongdoings are discovered.
Let's hear more from our reporter Tu Yun.
China's top trade union, the All-China Federation of Trade Unions, announced last week that McDonald's, KFC and Pizza Hut had violated the country's labor laws by underpaying part-time workers in the southern city of Guangzhou.
Li Shouzhen, a senior official with the union, urges the fast-food giants to correct their wrongdoings and pay the workers retroactively.
"We have asked the Guangdong provincial trade union to immediately organize investigations about the issue. We'll search for legal and active approaches to urge companies like McDonald's and KFC to correct their mistakes and pay their employees what they deserve."
The case was first brought to public attention by Guangzhou newspaper New Express late last month. The report said McDonald's, KFC and Pizza Hut in the capital of Guangdong province paid part-time workers up to 40 percent less than the city's minimum wage.
Guangzhou's minimum wage is 97 US cents, per hour for part-time workers. But according to the newspaper's undercover investigation, McDonald's pays only 52 US cents, KFC 61 US cents, and Pizza Hut 65 US cents, per hour for part-time workers.
New Express interviewed a former part-time worker, Tang Xiaoqing, at a KFC restaurant in Guangzhou, who had just been fired. The reason was not that her performance was bad, but because she had worked there for too long.
China's legislature is expected to adapt its labor law. Under the new regulation, a work unit must sign full-time contracts with part-time employees if they have worked for at least 10 years with the company.
It means that after 10 years of employment, companies must pay for insurance and pensions for part-time workers.
That's probably why veteran workers like Tang Xiaoqing and others were refused contract extensions.
If this can be forgiven as a sneaky tactic to avoid responsibility and doesn't violate related laws, there's more.
Tang Xiaoqing told local media she worked part-time at that restaurant for eight years because the restaurant never signed full-time contracts with its employees unless they held managerial positions.
Of the over 50 employees at the restaurant only six of them had signed full-time contracts and were granted a basic salary and related benefits, including paid holidays, annual bonuses and insurance.
Professor Wang Junmin, a law expert from Shanghai-based East China University of Politics and Law, says these employers try to force part-time employees to waive their rights to become full-timers.
"It's illegal for them to try to avoid signing full-time contracts. Employees have legal rights to establish formal employment relations with the companies who hired them. If the companies insist on signing temporary contracts, they are invalid."
After the exposure of these fast-food giants' practices, local trade unions in other provinces, including Hubei, Fujian and Liaoning, and Shanghai municipality responded quickly by conducting local investigations into similar practices.
Responding to the accuse, Su Jingshi, president of the greater China operations of Yum! Brands, which operates KFC and Pizza Hut, made an announcement at a press conference in Beijing.
"Our position is that the general public should wait for the government's decision with a calm and objective attitude. After the investigation is finished and a decision is made, KFC will fully follow instructions and do what the government requires the company to do in compliance with labor laws."
Both McDonald's and KFC said they were seeking clarification of labor laws, while the All China Federation of Trade Unions noted the probe had expanded to other provinces and cities regarding underpayment.
The official Li Shouzhen said the federation and the Ministry of Labor and Social Security will jointly launch a nationwide check next month on payments, minimum wages and labor contracts in enterprises.
"If companies refuse to correct their unlawful behavior, local trade unions will turn to local labor bureaus for further action. We'll also support employees who want to sue their employers."
He says the federation will encourage foreign companies to set up trade unions so that a satisfactory wage system can be formulated.
Insiders point out unlawful practices like underpayment and the absence of benefits are easily evident at enterprises here in China, even in some state-owned ones. It seems the campaign has started with international giants, who are expected to set good examples for future efforts.
For Beyond Beijing, this is Tu Yun.