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A senior south China trade union official said fast food giant McDonald's has promised to set up union branches in Guangdong Province outlets before July, but the company on Thursday refused to confirm the claim and would not comment.

Kong Xianghong, vice chairman of the Guangdong Trade Unions Federation, said his federation was confident McDonald's would establish union branches in first half of this year.

However, he would not comment about union branches in KFC and Pizza Hut restaurants, both operated by Yum! Brands Inc., which were last week accused along with McDonald's of overworking and underpaying their part-time staff.

Kong said that a preparation group including representatives of employees and management had already been established, and both sides had agreed on issues such as union fee payments.

"Helping overseas-funded enterprises set up trade unions is beneficial to building harmonious labor relations," said Kong, adding his federation had a duty to encourage all overseas-funded enterprises set up trade unions.

A spokesman for McDonald's in Guangdong on Thursday said he could not comment on Kong's claim and would not confirm that the company was establishing union branches.

However, a statement from McDonald's (China) late on Wednesday said the company had always strictly abided by all national and local laws and regulations.

It went on to say the company was "deeply surprised" that the All-China Federation of Trade Unions (ACFTU) had alleged that some international fast-food companies violated the labor laws of Guangzhou City.

It said the ACFTU had been "imprudent" in making such allegations.

A spokesman for Yum! Brands in Guangzhou on Thursday said he could not comment on the possibility of establishing union branches in its KFC and Pizza Hut restaurants.

Since the story broke last week, McDonald's, KFC, and Pizza Hut have been publicly criticized for paying their part-time Chinese employees just four yuan (US$52 cents) per hour, up to 40 percent less than Guangzhou's statutory minimum wage of 7.5 yuan (US$97 cents).

McDonald's and KFC have almost 3,000 outlets in China and employ almost 200,000 people.

The ACFTU succeeded in establishing union branches in Wal-Mart last year.

About 26 percent of China's 150,000 overseas-invested companies, excluding McDonald's and Yum! Brands, have set up trade unions, with a total membership of 4.29 million.

(Xinhua News Agency April 5, 2007)