China's part-time McWorkers
exploited By Olivia Chung
HONG KONG - Legal loopholes, lax
supervision and local corruption are allowing US
fast-food giants to underpay part-timer workers in
China.
The current labor law, effective
since 1995, has been criticized by human rights
and union activists for being more protective of
employers than of workers. Experts are urging the
Chinese government to draft a new labor law so
that the rights of both full-time and part-time
employees are equally protected.
The
following is an example of how a part-time working
student is
underpaid and his rights are
not fully protected.
Struggling to earn
enough to pay his tuition fees, Tong (not his real
name) started working a part-time job at
McDonald's in Guangzhou in January 2006 and was
impressed by the US fast-food restaurant's nice
atmosphere and neat environment.
"At
first, I didn't feel I was underpaid because the
salary the restaurant offered was similar to those
offered by domestic restaurants," said Tong, a
third-year undergraduate, "but after a long day of
work, I felt it was a bit unfair. It's a
hard-knock life."
According to the
contract he signed with McDonald's, Tong's basic
salary plus subsidy is 5.3 yuan (68.7 US cents)
per hour.
Having been working for more
than a year, Tong was only given one pay rise -
0.1 yuan per hour. "[The rise] means nothing to
me. What really counts is that the longer I work,
the more I earn," he said.
"Last month, I
worked more than 10 hours almost every working
day," he continued, "and one weekend, I worked
almost 15 hours non-stop from morning till
midnight to stock the restaurant with goods."
How much did he get last month? After
thinking it over for a while, he answered with a
laugh: "1,600 yuan." (US$207)
This means
he worked 296 hours last month. Given 22 working
days a month, he worked 13.45 hours per working
day, which is almost three times the officially
recognized five-hour part-time shift for employees
in China.
Despite the long and exhausting
working hours, Tong has never thought of quitting
his job. "I need to pay my tuition fees for my
fourth year of study," he said.
Tong's
situation is not an isolated case.
A
Guangzhou-based newspaper, after sending
investigative reporters to work undercover in a
few Western fast-food outlets, found that besides
McDonald's, other US fast food-chains, including
KFC and Pizza Hut, in some Guangdong cities had
also been exploiting part-time workers.
Local regulations, effective from January
1 this year, set the minimum wage for part-time
labor at 7.5 yuan per hour in big cities such as
Guangzhou, 6.6 yuan in medium-sized cities such as
Dongguan and 5.8 yuan in small cities.
But
part-time employees at McDonald's, most of them
college and high-school students, were paid around
5.3 yuan per hour in Guangzhou, 5.1 yuan in
Dongguan and five yuan in Shenzhen.
Other
US fast-food giants, such as Pizza Hut in
Guangzhou, offered 5.8 yuan per hour to part-time
workers while KFC paid 5.5 yuan.
The
fast-food giants allegedly force part-time
employees to work the same hours as full-time
staff but fail to pay them any of the benefits to
which full-time staff are entitled, the newspaper
said.
According to the mainland's labor
laws, employees who work more than five hours a
day and 30 hours a week should be treated as
full-time staff and receive the same fringe
benefits.
The allegations had a domino
effect across the country. Local media and trade
unions in other provinces, such as Hubei, Fujian,
Liaoning, Beijing and Shanghai, started
investigations into wage practices.
McDonald's and Yum! Brands Inc, which owns
both KFC and Pizza Hut, kept a low profile, saying
they complied with China's labor laws but would
not comment any further.
On April 3,
China's top trade union alleged in a news briefing
in Beijing that an investigation by Guangdong
labor authorities had confirmed media reports that
McDonald's, KFC and Pizza Hut had violated the
country's labor laws by "underpaying" part-time
workers in Guangzhou.
Li Shouzhen, a
senior official with the All China Federation of
Trade Unions (ACFTU), also said the union will
encourage foreign companies to set up trade unions
so that a satisfactory wage system can be
established.
"We are sure that McDonald's,
KFC - as world-famous brands - will set a good
example," Li said.
A week later, on April
10, the Guangdong Department of Labor and Social
Security released its investigation report, saying
some companies had not signed compulsory labor
contracts with some employees, and some full-time
staff were kept working overtime longer than the
law permitted.
With regard to part-timers
being paid less than the local minimum wage, the
report, quoting a state labor regulation, said:
"Students working in their spare time is not
perceived as employment, no labor relations with
their employers can be established and no labor
contract is required."
The Guangdong labor
authority's clarification indicates that part-time
working students are not protected by the law,
which is a relief for the employers involved.
A spokesperson for McDonald's China said
the company notes with satisfaction the official
declaration by the Guangdong labor authority, and
also appreciates the Guangdong labor authority's
help in clarifying the relevant labor laws.
"We note that comments by the labor
authority [indicate] that the China labor market
is changing at a rapid pace and that labor laws
will have to evolve accordingly. As a responsible
employer in China, we stand ready to play our part
in that process," she said in a statement.
Yum! in Shanghai said it appreciated the
Guangdong authority's clarification on the issue.
However, both companies declined to talk
about how much they paid their part-time workers.
Liang Zhi, a director of the labor law
committee of the All China Lawyers' Association,
said the fast-food giants are making use of
loopholes in labor laws that do not have clear-cut
stipulations on the rights and benefits of student
employees.
Commentator Ou Muhua said
corruption and lax supervision are largely to
blame for the alleged unfair wage payments to
working students. "This is the result of local
governments indulging multinationals. In the eyes
of those government agencies, McDonald's and KFC
could plate their cities with gold foil to enhance
their cities' status and recognition. That's why
they always let them get away with the labor
problems," he said.
With an increasing
number of global fast-food chains entering China
to set up operations, more and more local people
are working in the sector, so their wage policies
have rightly come under scrutiny.
The
practice not only reveals that fast-food chains
are taking advantage of legal loopholes, but also
highlights the long-standing differences between
foreign companies and the ACFTU regarding the
establishment of labor unions.
McDonald's
has opened 670 outlets in China since the doors of
its first restaurant swung open in Shenzhen in
1990.
The chain has offered 24-hour
service in Beijing since last year and plans to
open 24-hour outlets across the country,
increasing its number of restaurants to 1,000
before the Olympics in 2008.
Yum! plans to
open 100 KFC drive-thrus in China over the next
three years. KFC has established 1,800 outlets,
including 10 drive-thrus, in China since it set up
its first outlet in Beijing 20 years ago. It is
also looking into adding a delivery service and
expanding its business hours.
Mainland
Chinese spent more than 1.03 trillion yuan last
year on dining in restaurants, up 16.4% over 2005,
a report recently released by the Ministry of
Commerce showed.
The report said the
figure accounts for 13.5% of the country's total
retail sales of consumer goods and has raised the
national consumer product retail volume by 2.2%.
It has also helped create about 20 million jobs.
The ministry expects retail sales in the
catering sector to grow to 1.21 trillion yuan this
year.
In order to get a bigger slice of
China's growing consumer market, some foreign
giants have been bowing to pressure from
government agencies.
The world's biggest
retailer, Wal-Mart, singled out by the ACFTU as an
obstacle to unionization in 2004, founded its
first mainland trade union in Jinjiang city in
east China's Fujian province in July 2006. As of
September last year, about 62 branches of Wal-Mart
in more than 30 mainland cities have set up trade
unions, with a total membership of more than 6,000
workers.
However, McDonald's China is
still in discussions with Beijing on setting up a
union branch. A spokesman for McDonald's China
said that since November last year the company has
been in discussion with Guangzhou city union
officials on setting up a union branch.
An
ACFTU spokesman said on April 16 that McDonald's
China had promised to establish trade union
branches in its 40 restaurants in the eastern
Zhejiang province this year.
The growth in
retail sales means there's money to be made for
multinationals that can provide quality service
and advanced business models that will keep people
coming back for more, but the allegation that
foreign fast-food giants are underpaying part-time
workers and their delay in establishing trade
unions will damage the corporate images they have
made great efforts to cultivate in China.
Olivia Chung is a senior Asia
Times Online reporter.
(Copyright 2007
Asia Times Online Ltd. All rights reserved. Please
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