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KFC talks with Chinese trade union on wage demand

Representatives of U.S. fast food chain KFC began to talk with Chinese trade union officials Thursday in Liaoning Province, two months after the union demanded an increase in salaries.

Shao Guihua, chief manager of Yum! Brands Inc. China Division's branch in Shenyang, capital of Liaoning in northeast China, held talks with Ju Xiuli, chairman of the Shenyang Municipal Trade Union, in the afternoon.

Ju reiterated the suggestion that the company set a minimum wage at 900 yuan (131.7 U.S. dollars) a month and maintain an annual pay raise of 5 percent.

The company had insisted it be the city's general level of minimum wage, 700 yuan per month.

The union Thursday asked KFC to finalize the draft version of a collective labor contract in two weeks, which had been delayed for months as the two sides diverged on the salary clauses.

Ju said KFC Thursday agreed to reply to the demand in a week.

Li Zhongmin, a public relations manager with Yum! Brands Inc., who was present at the negotiations, said KFC had reached a consensus on the general direction of the issue and the company had been working actively and sincerely with the union.

"We are carefully working on the details of the contract and looking forward to a result that satisfies both sides," Li said.

The Shenyang trade union sent a letter two months ago to the fast food company and Thursday's talks had been the first positive response of KFC over the higher pay request, said union officials.

Yum! Brands Inc. in Shenyang, which manages 57 KFC outlets and 11 Pizza Hut restaurants, submitted a draft labor contract to the union on Feb. 12. But the union regarded it as "favorable to the company and unfair to its employees."

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 Hui, head of the services industries department of the union.

KFC entered China's mainland market in 1987. China is KFC's second largest market after the United States.