Recently staff at McDonald’s have been told by their employer that the company has finally accepting that they have been incorrectly calculating annual leave when workers take it. The memo is in a circular from head office dated 16 December that is only available on the company’s internal communication system.
The law requires the company to pay annual leave in “weeks”. The leave should be calculated as the “higher of” your average pay for the year or your current weekly pay. It may be, for example,that you have shifted from working 10 hours a week to 30 hours a week. The week’s leave should be paid at 30 even if the average for the year is less. If a worker’s current weekly pay is difficult to calculate because their hours change from week to week – then the law says it should be the higher of the last four weeks pay or the average for the year.
This is specified in detail in the law.
The problem was that McDonald’s only calculated leave as hours and then allocated hours when workers took leave. They did not calculate “weeks”. And even when they did calculate a week’s leave they only gave the average and simply didn’t bother doing a “higher of” calculation.
Unite asked the company to initiate an audit process after we identified this error in the company’s method of calculation in February 2015! It has taken almost two years before they finally acknowledged they were wrong to their staff.
Our initial request for information was ignored. They then simply denied the obvious.
We eventually got a lawyer to threaten to taken the company to court. The company continued to deny wrongdoing in a letter to Unite in December 2015.
In early 2016 it became public knowledge that McDonald’s was only one of many companies to have made the same “error”. The issue then became a matter of public debate and discussion.
Unite felt compelled to write to the company again on March 9, 2016, seeking assurances that they would take action on the annual leave issue.
They responded March 17 by saying that they had appointed an external third party to review their systems. In exchange for this step, we agreed to hold off legal action in a good faith expectation that the results of the audit would be shared with us.
At the end of 2016, it was becoming clear to us that the company appeared to be reneging on its good faith obligations to share information with us. Again the company gave us an “assurance” that you any problems identified would be fixed.
However, our distrust of the company has been reignited. At the end of last year, we submitted a formal wage and time record request to Mcopco for a record of the annual leave payments for our members and how they were calculated.
The information we have received confirms for us that many workers have been cheated of their lawful entitlements.
We will be having further discussions with the company to ensure everyone gets what they deserve.
We understand that nearly every employer in the country that employed staff on irregular hours has failed to apply the law correctly. Possibly hundreds of millions of dollars are at stake.
Now the Ministry of Business Industry and Enterprise are demanding answers from companies that have been reported to them. McDonald’s are on their list. Between the two of us I believe McDonald’s have finally realised the game is up.
What is sad is just how hard it is sometimes to get these big, profitable multinationals to even obey the law!