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First KFC Trade Union Branch Established

In March this year KFC, McDonalds and Pizza Hut were discovered by reporters of a Chinese newspaper to be paying illegally low wages to their part-time and casual “work-study” students in Guangzhou City (see CLNT posting ‘Western Fast Food Chains’ violate minimum wage laws”). After much outcry from the public the issue fizzled out after a month because the two companies were able to make use of a loophole in the Chinese legal system that exempts “work-study” students from the jurisdiction of China’s Labor Law. Based on our interpretation it looked as if, by not taking the companies to court for underpaying it staff, an agreement was struck between these companies with the All-China Federation of Trade Unions (ACFTU) that the union could set up union branches in all these fast-food outlets across the country. Since May, brief reports on the Chinese union successfully setting up unions in KFC stores (sometimes McDonald’s as well) began to appear in local newspapers. Thus far we have collected six such reports. Some seem to indicate the union branches were set up by provincial or city level trade unions with their KFC counterparts at the same level. Others mentioned “democratic secret ballot elections” of union chairs and executive committees.

But with the reports being so brief it is very difficult to know whether these unions that were set up are anything more than typical unions set up over the last decade — i.e. local union officials forming a workplace union from the top-down through “consultation” with management, or chosen by management outright. What is clear from the reports is that after the expose story that appeared a couple of months ago, the ACFTU has issued a directive to all lower level unions to target KFC for unionization.

This article, “A Tough Context: Establishing the First KFC Trade Union Branch” is different from the other several reports. It contains unusual details of how the Shiyan City trade union in Hubei province went about organizing a small group of part-time KFC student workers to start a union. Through this report it can be seen how KFC has a well-planned strategy to control the unions in all its outlets by first getting the provincial trade union to agree to let it set up a union at its KFC’s Headquarters located at Wuhan City, Hubei Province. Having established what is essentially a managers’ union at the head office, this union can then start appointing managers in its outlets all over the province to be trade union chairs and formed what it calls, “trade union small groups.”

But not all city level unions were happy to let corporation-setup unions spring up under their noses. In this case the Shiyan City trade union tried to prevent this from happening to its two local KCF outlets. It used genuine bottom-up union organizing efforts by going to the workers and persuading them to apply to set up a union. This method of organizing has instigated the coining of a new term in Chinese trade union vocabulary – “setting up trade unions branches one by one under locality union supervision”. Actually there is nothing new in this. Workplace unions in China in foreign funded enterprises have always been set up by local unions. The expression has to be created to counteract the new aggressive initiative launched by some multinationals and other companies. Corporate management has tried to monopolize the setting up workplace unions by first setting up “yellow” head-office unions so as to be able to have total control over the setting up of all branch unions within its own corporate organizational structure. Despite the generally cynical attitude that the ACFTU union branches are all docile and subservient to management, they still do not want to take the chance of letting things out of their hands. But in order to do this there has to be some tacit agreement between KFC and higher level unions.

The Shiyan City trade union tried hard to overcome this new trend. But its efforts have been thwarted by opposition from KFC management, hence the title, “tough context”. Management has not only pressured workers not to join the new workplace union, it has also pressured those who have just joined the new union to write resignation applications to quit membership. Above all it has also gone as far as to implement its corporate policy of starting its own store union called “trade union small groups” that exist side by side and in competition with the official one! According to Chinese law it is illegal to have two trade unions at the one work site. What remains unclear is why the ACFTU has not demanded KFC to disband these trade union small groups, but rather let the local Shiyan City union struggle to compete with these small groups. Is it possible that the provincial government is behind KFC? There is no way of knowing.

Let us for the time being leave aside the legality of this situation in the Chinese legal context. What is very interesting is that this article gives us an insights not only into how a local union is experimenting with new bottom-up organizing techniques, but also the fiercely anti-union stance taken by KFC in Hubei province. Oddly enough sometimes resistance from companies to let the ACFTU come in to set up even management-dominated or undemocratically elected workplace unions as it was the case with Wal-Mart in the past few years, may turn out to be a good thing. Open resistance may instigate some trade union officials to fight back, in this case, the Shiyan City union. The Shiyan City like all Chinese unions has little experience in how to struggle against anti-union management. But this story shows that the union officials involved in this had been resourceful and it seems that without the support from ACFTU in the province and in Beijing, they are strategizing how to compete with China’s first even pair of parallel unions.

PDF version of the introduction
CLNT_KFC_Union_Hubei_INTRO.pdf [78.08KB]

Here is the translated article

A Tough Contest: establishing the first KFC Trade Union branch
A Tough Contest.pdf [121.61KB]

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