Representatives of US fast-food chain KFC in northeast China's Shenyang City Thursday signed the company's first collective labor contract on the Chinese mainland, agreeing to raise workers' wages and meeting the demands of a local trade union.

According to the agreement, the company's roughly 2,000 employees will enjoy a minimum monthly wage of 900 yuan (US$131.7) - up from the company's previous offer of 700 yuan per month - and an annual five percent pay raise.

An executive with Yum! Brands Inc in Shenyang said on the condition of anonymity the agreement is the company's first collective labor contract on the Chinese mainland.

He admitted the company had been under pressure after media reports of the negotiations with the local trade union.

Yum! Brands Inc in Shenyang manages 57 KFC outlets and 11 Pizza Hut restaurants. The company is known by locals as KFC Shenyang.

The company said in a statement earlier this month most of its employees in Shenyang already have monthly wages of over 900 yuan, and so the signing of the contract "would not necessarily mean workers' pay would immediately rise."

Duan Yang, vice president of the Shenyang Municipal Trade Union, said the inking of the collective labor contract was "significant in that it established a mechanism for negotiations between the employer and workers on wage issues."

"The contract also ensures service-sector workers at the lowest level in fast-food outlets will benefit from an annual pay rise," he added.

(Xinhua News Agency June 18, 2010)