McDonald's responds to exploitation allegations

A spokesperson for the fast food giant spoke to HRM in response to allegations relating to the company's practices around hiring beneficiaries.

McDonald's responds to exploitation allegations
McDonald's has responded to accusations that some of New Zealand’s largest fast food companies have exploited government subsidies to hire beneficiaries and then cut the workers’ hours after the cash runs out.

The accusations – which came from Unite Union – have disappointed McDonald's, which told HRM that the union had never brought up the issue in its regular meetings with the company's HR team.

Radio New Zealand reported that figures from the Ministry of Social Development showed that McDonald’s has claimed around half a million dollars in subsidies over the past six years.

Burger King, meanwhile, claimed around $62,000, none of which was received in the last two years.

Although the amounts are arguably small considering the number of people employed by the companies and the length of the period over which the data was collected, the union argued that the organisations did not need the financial help.

A spokesperson for McDonald’s told HRM that Unite had never raised these allegations with the company.
“Unite has not raised these allegations with us,” she explained.
“The director of HR for McDonald’s met with Unite as recently as Tuesday 13th October – it is a regular meeting – and no mention was made. We would always fully investigate an allegation such as this, but we have no specifics from Unite.”
She added that the use of the subsidy is not a blanket policy for all restaurants.
“Not all McDonald’s restaurants that hire people via WINZ utilise it,” she told HRM.
“An example of this is one of our South Auckland franchisees, Geoff Turner.
“Geoff owns and operates four restaurants in Manukau and is focused on actively getting Kiwis back into work through WINZ. He does not utilise the subsidies.”
Unite’s national director, Mike Treen, also said that until now, many beneficiaries taken on by fast food chains had found themselves on zero hour contracts once the subsidies ended.
Treen told Radio New Zealand that Unite Union’s new collective agreement with McDonald’s – which came into effect on October 1 – should stop this practice by guaranteeing workers 80% of the hours they had worked in the previous three months.
He added that the union would also be placing the companies under scrutiny to ensure that existing workers did not continue to lose hours to subsidised newcomers.

“Having new staff come in on a 30-hour guarantee is a problem, given that we have a clause in the collective agreement saying hours should be offered to existing staff before new staff are employed,” he said.

In May, McDonald’s announced that from October 1, it would no longer use zero hours contracts.

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