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McDonald’s China does nothing, but under attack anyway

McDonald’s China is drawing criticism from Hong Kong trade unions, who fear the impact of the new owners on employment conditions.

Despite reassurances from local McDonald’s management – or any evidence at all suggesting changes to labour policies are looming – the fast food giant has come under attack on both sides of the border.

The new business unit taking over the McDonald’s business in China and Hong Kong is jointly owned by state investment group Citic Ltd and US private equity company Carlyle Group. McDonald’s Corporation (US) will maintain a cornerstone minority stake. The new company holds 20-year franchise rights.

In a statement issued this week, the Hong Kong Confederation of Trade Unions (HKCTU) said the change of ownership will put further pressure on pay rates at Hong Kong outlets, where it says many workers earn little more than the minimum wage of HK$32.50 (US$4) per hour.

“In other countries where McDonald’s has sold a large stake of its business, the resulting model has placed enormous pressure on franchisees, which has made it harder for franchise operators to provide adequate pay and conditions for their workers,” HKCTU official Wong Yu Loy said.

“If the buyers in Hong Kong get squeezed by McDonald’s as they have in other countries, workers here may get even less as a result,” Wong said.

Last week, a Chinese labour consultancy Hejun Vanguard Group filed a formal complaint with the mainland’s Ministry of Commerce claiming the move to the new business model may adversely impact its 120,000 workers in China – and McDonald’s customers.

But McDonald’s has rushed to placate concerns saying its franchise models all over the world are based on “mutually beneficial partnerships” and the company “treasures” its employees.

“The level of remuneration of our employees is based on their positions, working experience, expertise, performance, as well as market conditions,” said a spokeswoman.

“McDonald’s strictly abides by Hong Kong labor legislation and the statutory requirements. The current compensation and benefits of McDonald’s Hong Kong will not be affected as a result of bringing in strategic partners.”

The HKCTU, which represents 90 affiliate labour organisations covering 170,000 workers, appears unmoved.

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