Restaurant staff in Wuhan achieved a major pay hike after marathon talks with employers.

April 23 was a big day for 450,000 restaurant workers in Wuhan who were promised a major pay hike after marathon talks between unions and bosses.

The collective contract, the largest in China so far in terms of numbers of workers covered, includes a guaranteed wage at least 30 percent above the local legal minimum. Employees will receive a pay hike of at least 9 percent by the end of 2011. And the difference is already being felt on the ground. During last week’s May Day holiday restaurant workers received overtime pay under the terms of the new contract.

Negotiations on the deal began three years ago but were suspended after the global financial crisis broke out. Many restaurants were in financial trouble and could not afford pay rises. Talks were postponed until 2009.

Wuhan is situated in the heart of China. It is a major transport hub and its catering industry is very profitable. The city has almost 40,000 restaurants, 84 percent of which are classified as medium and small sized enterprises. In the high season, they employ some 500,000 workers, generating an annual output of some 50 billion yuan (US$7.69 billion).

But restaurant staff were traditionally the lowest paid workers in Wuhan. According to Liu Qixin, deputy chairman of the Wuhan Federation of Trade Unions, taxi drivers in Wuhan can earn around 5,000 yuan (US$796) monthly, construction workers can earn around 3,000 yuan (US$461), but workers in small restaurants typically earn only around 1,000 yuan (US$153).

There is no doubt that restaurant workers in Wuhan needed a pay rise, but the question was how much.

Liu Qixin said the obvious solution was for the issue to be decided by negotiations between the Wuhan Food Industry Association (WFIA) and the local federation of trade unions. The WFIA was founded 10 years ago and enjoys a high reputation among restaurant owners, and the local branch of the All China Federation of Trade Unions (ACFTU) has a special section covering the food industry.