More than 100 witnesses are scheduled to testify
A Federal Court case involving allegations that more than 300,000 McDonald's workers were denied paid rest breaks is placing employer compliance systems and franchise oversight practices under scrutiny across Australia's fast-food sector.
The proceedings, brought by the Shop, Distributive and Allied Employees' Association (SDA), concern the provision of paid 10-minute rest breaks for employees working four-hour shifts. The claims relate to obligations under the McDonald's Australia Enterprise Agreement 2013, which applied until February 2020, and the Fast Food Industry Award, which applied afterward.
The union is seeking compensation for workers allegedly denied paid rest breaks, as well as court orders requiring McDonald's and its franchisees to pay penalties for alleged breaches of workplace rights. The SDA is also seeking orders that McDonald's Australia pay fines for allegedly being an accessory to franchisees denying workers their entitlement to breaks.
Compliance questions move to center stage
The trial commenced this week and is expected to run for nine weeks, with evidence to be heard in Sydney, Adelaide and Melbourne.
According to the SDA, the proceedings are test cases drawn from a group of more than 300,000 affected workers. More than 100 witnesses are scheduled to testify.
The case arrives during a period of heightened scrutiny of employment arrangements within McDonald's franchise network. HRD previously reported that a Fair Work Commission supported bargaining authorization covering 18 South Australian McDonald's franchisees became the subject of a judicial review application. The commission had determined that the franchisees and their employees could participate in multi-enterprise bargaining over pay and conditions.
HRD also reported that the SDA subsequently sought to extend supported bargaining arrangements to McDonald's franchisees nationwide, while employer groups argued the decision could have implications for franchise operators and employers across fast food, hospitality and retail sectors.
Test cases before the court
The SDA's test cases involve workers from McDonald's restaurants in Collinswood and Munno Para in South Australia.
One witness is alleged to have been denied 827 paid 10-minute rest breaks. According to the union, this amounts to 8,270 minutes of unpaid work, equivalent to 18 full working days.
SDA SA&NT Secretary Josh Peak said young workers, many of whom are entering the workforce through their first jobs, should be able to rely on employers to provide workplace entitlements.
“Young workers – often in their first jobs -should be able to rely on a massive company like McDonald’s to do the right thing.”
Peak said younger employees may be reluctant to challenge employers regarding workplace rights.
“Young workers often won’t have the confidence to challenge their employer about whether they are getting their legal rights.”
He said the union's case alleges workers continued working during periods when they were entitled to paid breaks.
“Sadly, the SDA’s case is that McDonald’s let down young Australians, and made them work when they were legally entitled to a paid break.”
Beyond the allegations themselves, the proceedings place attention on how workplace entitlements are administered across large franchise systems, particularly where day-to-day employment practices are carried out by individual operators.
The Federal Court's examination of the claims is likely to be watched closely by employers that manage large numbers of frontline and younger workers through franchise or multi-site business structures.
The paid-break case is distinct from another Federal Court action brought by the SDA involving allegations that McDonald's managers worked without pay before and after their shifts.
SDA National President Michael Donovan said the matter should not have required court proceedings.
“It shouldn’t take a huge federal court case for McDonald’s to just do the right thing.”
Donovan said affected workers should be compensated.
“McDonald’s should admit what they did was wrong and pay these impacted workers what they are owed.”
