McDonald’s workers agreement scrapped but no backpay coming

By Nick Hall | 08 Jan 2020 View comments

Thousands of McDonald’s workers are set to be better off after the Fair Work Commission (FWC) terminated the chain’s contentious enterprise-bargaining agreement.

Come February 3, McDonald’s workers will have the option to transition to the industry award, replacing the 2013 agreement the franchise struck up with the Shop, Distributive and Allied Employees’ Association (SDA).

The Fair Work Commission ruled that the agreement meant some staffers earnt less than the industry minimum, due primarily to the lack of penalty rates.

“I accept that employees engaged at levels two and three would have a higher minimum rate of pay under the award than under the terms of the agreement,” deputy president Alan Colman said.

“The fact that certain agreement rates are below the award rates is a circumstance favouring a conclusion that it is appropriate to terminate the agreement.”

While the decision was an immediate win for McDonald’s workers across the country, it wasn’t all good news. Colman and the FWC stopped short of ordering McDonald’s to backpay workers, on the basis that “such an order would be unjust”.

McDonald’s workers retrospective agreement

Colman said that a retrospective termination of the agreement would require a “colossal” reconstruction exercise, whereby the award would need to be applied to the particular hours worked by more than 100,000 employees over the past two and a half years.

“This would be a difficult and burdensome task, and a further dimension of the unfairness that would arise if the historical employment obligations at McDonald’s were to be rewritten,” he said.

“There is no power for the Commission to terminate the agreement with retrospective effect, and even if there were such power, I would not exercise it in this case.”

The move sees thousands of McDonald’s workers lose out on unpaid wages, which Retail and Fast Food Workers Union secretary Josh Cullinan said was a black mark on the outcome.

“We wanted that to be terminated with backdated effect, in effect for the last two and half years, returning something like $300m to workers in wages that weren’t paid because the 2013 SDA/McDonald’s agreement cut the minimum rights such as penalty rates and other conditions,” he said in a video posted to the RAFFWU Facebook.

“It’s grossly disappointing, it’s entirely appropriate that the Fair Work Commission agree with RAFFWU to pay that $300m that was stripped from workers without their knowledge and without their consent.”

Concerns over new contracts

The union boss went on to suggest that by not implementing the backdating process as immediate, McDonald’s workers would face ongoing pressure from the fast food giant.

“That gives McDonald’s an unprecedented six weeks to implement their outrageous attacks on workers across the McDonald’s network,” he warned.

“We know that the attacks that McDonald’s will launch in the next six weeks will have a significant impact on staff. Don’t sign any new contract if you’re part time without getting advice. They will try to cut your contracted minimum hours per week in these new contracts.”

It’s been a long two-year battle for the RAFFWU, which took up the fight after several disgruntled workers among McDonald’s network of over 109,000 stepped forward. However, for Cullinan, the case is far from over.

“We will be corresponding with McDonald’s and putting them on notice,” he said. “The changes that attack workplace rights are not only not on, but probably unlawful.”