McDonald’s tastes capitalism with Chinese characteristics

Agrees to allow more unions; Move comes after charges of denying minimum wages, full-time benefits to labourers

A year after Wal-Mart Stores unionised all its stores in China under pressure from the government, McDonald’s is cooperating with China’s large state-controlled union to allow the formation of more unions in its 750 outlets here. A McDonald’s spokesman said that the company was working with union officials to help establish a union at its stores in southern Guangdong province, one of the country’s wealthiest regions. The announcement comes nearly two weeks after a state-controlled newspaper in Guangdong reported that some McDonald’s, KFC, and Pizza Hut restaurants in Guangdong were violating the law by paying employees less than minimum wage and denying some workers full-time benefits.

Officials at McDonald’s and at Yum Brands, which operates nearly 2,000 KFC and Pizza Hut outlets in China say they obey the law. But McDonald’s officials say they are now investigating the allegations. Guangdong labour authorities quickly announced an investigation into the matter and the country’s largest state-run union, the All China Federation of Trade Unions, accused McDonald’s and Yum of underpaying their workers.

One trade union official, who refused to be identified because he was not authorised to talk to a reporter, said, however, that McDonald’s had recently begun making efforts to work with union organisers and had even circulated information within some of its Chinese stores about unions. A McDonald’s spokesman said that the fast-food outlet already had unions in some of its Chinese stores and that even before the pay complaints arose, the company had been cooperating with the All China Federation of Trade Unions in Guangzhou, the capital of Guangdong province. “Since November last year, McDonald’s China has been in productive discussions with the Guangzhou City union officials, making progress in setting up a union branch,” the company said in a statement.

A Yum Brands official in Shanghai did not respond to an interview request. The effort to form unions in multinational corporations here is one of the latest developments in a country where economic growth is sizzling hot but workers are beginning to complain more publicly about unfair labor practices. While unions have been around for a long time here, mostly in state-owned companies, experts say they have traditionally been weak in China. In many cases, they work in tandem with management, particularly in state-run companies.