McDonald's NZ accused of wage theft

The fast food giant allegedly denied many workers their legal right to a lieu day for working a public holiday

McDonald's NZ accused of wage theft

McDonald’s NZ has been accused of deliberately denying many workers their legal entitlement to an alternative holiday or lieu day for working a public holiday.

Alternatively, they have allegedly denied workers’ pay for a public holiday when they were entitled to it.

Unite national director Mike Treen said that from the wage and time records which were analysed, it seems that on average each McDonald’s worker has missed out on this entitlement at least twice a year.

He also alleged that “workers have been sacked for eating a burger they haven’t paid for”.

Treen said Unite first wrote to McDonald’s three years ago about the need to fix how annual leave and other holiday act entitlements were being calculated.

“At first, this centred on a failure to calculate annual leave correctly,” said Treen.

“After some delay, the company said they would fix everything that was owed, and go back six years from when we first wrote to them – a total of nine years now.

“We understand the Ministry of Business, Innovation and Enterprise (MBIE) have also been subjecting them to an audit of their obligations.”

HRD contacted McDonald’s for comment and the spokesperson Simon Kenny said the company is reviewing their procedures.

"As with many companies, when questions were raised about how certain aspects of the Holidays Act 2003 were interpreted, we reviewed the processes and calculations used through our company-owned and franchised restaurants. Unite Union, who represent some of our employees, also raised the potential issue and we agreed to work with them in the review process," said Kenny.

"We engaged with third party payroll experts to audit our payroll systems, and to review our calculations around annual leave payments. Having identified that we may have an issue we then had a project team work on rectifying the situation. We have committed to do everything we can to pay whatever is owed to current and former employees.

"With regard to public holiday entitlements our situation is different to that of Wendy’s in that we agreed with Unite Union a method for calculating alternative holiday or lieu days in our collective employment agreements.

"We are working to the best of our ability and in consultation the Ministry of Business, Innovation and Employment to ensure the process followed provides a fair outcome for current and former employees."

Moreover, Labour Inspectorate national manager Stu Lumsden said it was also working with the fast food restaurant to resolve the issues of pay impacting workers in jobs that have fluctuating hours.

"McDonalds is co-operating with the Inspectorate to resolve these issues, and we continue to monitor their progress with the expectation where applicable they will fix their systems and pay any remediation owed," said Lumsden.

"We are working with other large employers to ensure they address issues of non-compliance – but with this work ongoing the details we can provide at this time are limited. Every employer must meet their obligations."

Treen added that a legal case last year against Wendy’s confirmed that a formula that they were using and had been used for many years by McDonald’s was wrong. In particular, it was

inaccurate in determining ‘what was an otherwise working day’ which is the legal basis for earning lieu days or pay for a public holiday.

“What McDonald’s and Wendy’s had done was insist that a worker had to work the same day as the public holiday three weeks in a row before the holiday,” he said.

“This was deemed far too restrictive in an employment relations authority judgement which said a simple majority of weeks worked over the previous three months would be enough to earn the entitlement.”

Treen said Unite asked McDonald’s to voluntarily accept this judgement and incorporate the adjustment needed into their planned remediation for annual leave that was underpaid in the past.

“They refused. So we asked for wage and time records that would show how much workers had lost when we applied the formula from the authority decision. It was two days per worker at a value of at least $150,” he said.

“With 9000 crew losing on average two days pay each year the lost wages could be worth over a million dollars a year – a total of over nine million dollars for this ‘mistake’ if taken back nine years.

“That nine million dollars needs to be added to people’s pay before the company recalculates a correct payment for the annual leave they owe.”

McDonald’s have refused to confirm they will do that so Unite have written to MBIE to make sure it is included in their audit of what McDonald’s owes, said Treen.

“It’s not good enough for wage theft to be simply compensated for at the value of what was lost. There is no incentive for the company to make sure it never happens in the first place."


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