US fast food chain KFC has failed to respond to a Chinese trade union's demand to increase its employees' salaries, the union's chief said here Wednesday.
A lawyer representing the tertiary workers' union in Shenyang, capital of Northeast China's Liaoning province, sent a letter two months ago to the Shenyang branch of Yum! Brands Inc China Division, which manages KFC outlets in Shenyang, demanding a timely increase in workers' wages.
"We urged the company to clarify clauses regarding workers' pay rises in the draft version of the collective labor contract," said Feng Hui, head of the Shenyang Municipal Trade Union for Services Industries.
"But we've yet to receive a positive response from the company," Feng said.
Feng said the union asked KFC to define workers' minimum salary in the contract.
The company was obliged to negotiate with the union on the draft contract within ten days of receiving the lawyer's letter, the union director said.
Li Zhongmin, a public relations manager with Yum! Brands Inc in Shenyang, explained the company needed to report the matter regarding contract changes to the company's China headquarters, which has caused a delay in responding to the letter.
"KFC is cautious in making changes to labor contracts. But once the contract is signed, we will fulfill our obligations," Li said.
Yum! Brands Inc in Shenyang, which manages 57 KFC outlets and 11 Pizza Hut restaurants, submitted a draft labor contract to the union on February 12 this year. But the union regarded that draft as "favorable to the company and unfair to its employees."
"We suggested the company define the minimum wage as based on the city's minimum wage in the services sector, 900 yuan ($131.7) per month. But the company insists it be the city's general level of minimum wage, 700 yuan per month," said Feng.
An employee surnamed Zhang at a KFC outlet in University Town in Shenyang said the minimum wage there was 5.6 yuan per hour, lower than the city's minimum wage of 7.2 yuan per hour.
Union statistics show Yum! Brands Inc in Shenyang has 2,000 employees on its payroll. The company's profits rose 30 percent between 2007 and 2009.
"It is a shame the world's largest restaurant company insists of the city's minimum wage level," said Feng, the union chief.
Duan Yang, a union worker, said the union in 2008 achieved a minimum annual salary of 18,509 yuan for restaurant workers. But many KFC workers only receive about 8,000 yuan a year.
He said Yum! Brands is reluctant to give an annual pay rise of 5 percent as the union has suggested, even after Walmart's Shenyang subsidiary agreed to an 8-percent annual pay rise in its 2008 collective labor contract.
"We have referred to the city's general salary levels over the past two years when giving suggestions to KFC. It is hard for us to understand why the company is still reluctant to accept the suggested salary level -- which is already very low, even for Shenyang," said Wang Yiqing, deputy chairman of the Shenyang Federation of Trade Unions.
Wang said according to the city's regulations, the government can blacklist a company that fails to protect workers' basic welfare and fine both it and its legal representative.
Meanwhile, Yum! Brands Inc China Division in Shanghai Tuesday marked the opening of the 3,000th KFC outlet in China.
KFC entered China's mainland market in 1987.
China is KFC's second largest market after the United States.