McDonald’s rebuffed over fast-food flexibility deal

David Marin-Guzman

May 6, 2020

AFR

The Fair Work Commission has refused to waive overtime rates and set shifts for part-timers in the fast-food industry due to a lack of evidence that major franchisors like McDonald’s are struggling during the pandemic.

A full bench headed by president Justice Iain Ross on Tuesday knocked back employers’ urgent bid for changes to the fast-food award, despite backing from the Australian Council of Trade Unions, but gave them another chance to prove the changes were needed to ensure work during the crisis.

The push-back represents the first time the commission has refused temporary flexibilities in awards to tackle the COVID-19 crisis and followed strong opposition from the Retail and Fast Food Workers Union.

Australian Industry Group, representing McDonald’s, now appears set for a drawn-out fight over the changes despite reaching consensus with the Shop Distributive and Allied Employees Association and the ACTU following weeks of negotiations.

The variation, intended to be in effect for three months, would have replaced strict set rosters for part-timers with a minimum number of weekly hours and removed overtime pay for extra hours to ensure work in the face of reduced customer demand.

Employees would also have been barred from “unreasonably” refusing to take annual leave to save jobs during the pandemic.

However, RAFFWU national secretary Josh Cullinan argued the changes were an “outrageous attack” on workers’ rights and intended to benefit billion-dollar multinationals “without a shred of evidence” that they were suffering.

Justice Ross told AiGroup during a hearing on Tuesday that “we’re not prepared to grant the application on the basis of the material present before us”.

He said AiGroup needed to provide evidence of the impact of the coronavirus restrictions on large fast-food businesses and, “perhaps more importantly”, how the proposed flexibilities would assist in maintaining employment.

AiGroup had argued the fast-food changes aimed to filled a “regulatory gap” for large businesses that had suffered a downturn but were ineligible for JobKeeper and the workplace flexibilities that accompany it.

In particular, it said McDonald’s and its 109,000 employees were not eligible for JobKeeper because the franchise had more than a billion dollars in revenue and could not meet the 50 per cent drop in revenue required for the wage subsidy.

Some of the burger chain’s franchisees also could not meet the lower 30 per cent drop in revenue as their stores were performing differently in different circumstances.

But while Justice Ross accepted it was logical that stores without drive-throughs would be affected by the coronavirus restrictions, he said “there’s no evidence before us that tells us that they have suffered any loss of revenue at all”.

“You say they have but that assertion is challenged so it’s not one we’ll be relying on.”

AiGroup said the necessity for urgency “undermined our ability to build the traditional, significant evidentiary case” and argued loss of foot traffic at food courts and airports was “self-evidently” damaging for fast-food restaurants.

Part-time work ‘casualised’

But RAFFWU said the changes appeared intended primarily for Domino’s and McDonald’s, given that other fast-food franchises were covered by enterprise agreements.

“Those two entities are multibillion-dollar behemoths more than capable of managing their affairs without the ‘flexibilities’ the applicant and its consenters seek to foist upon low paid workers,” its submission said.

The union argued “there is no ‘regulatory gap’ as JobKeeper recognised larger businesses had greater capacity to withstand the economic impacts of the coronavirus.

“For many employers, the ‘gap’ is that they don’t have the suite of tools to exploit workers

which they would like to have.”

Further, “there is no material, evidence or anecdote identifying how casualising part‐time work will ensure extra employees are able to be retained in employment”.

“In fact, the de‐securitising and casualising of work will mean employees lose their employment.”

Evidence provided by a McDonald’s employee said that “without set shifts, I will only be rostered late-night maintenance shifts or three-hour late‐night shifts”.

The employee said Mcdonald’s food delivery sales were still strong and that his store “broke a store lunch sales record a week ago”.

The SDA said in its submission that the changes aimed to “provide certainty to income or access to income where possible in difficult times”.

“It is also attempting to ensure survival of businesses and thus jobs for when the pandemic measures are either relaxed or no longer apply.”