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McDonald’s hit with $250m wage theft claim over rest break entitlements

McDonald's hit with $250m wage theft claim over rest break entitlements

McDonald’s has been hit with a mammoth wage theft case over allegations more than 250,000 current and former workers were denied rest breaks.

The Shop, Distributive and Allied Employees Association (SDA) announced Friday it had lodged a “mega” federal court claim against 328 McDonald’s operators and the fast food giant itself over the alleged denial of paid rest breaks at nearly 1000 current and former restaurants.

The union, which has some 15 existing federal court claims against McDonald’s and its franchisees, said it was seeking $250 million in compensation plus penalties in one of the biggest wage theft claims of its kind in the country’s history, capturing more than 1.8 per cent of working Australians.

Under the Fast Food Award, all McDonald’s workers are entitled to an uninterrupted 10-minute break when working four hours or more. The SDA alleges that not only were employees not informed of their rest break entitlements, but they were also told breaks could be exchanged for a free soft drink or going to the toilet.

The union alleges that the conduct was systematic and deliberate and that McDonald’s Australia aided and abetted franchisees in the practice.

“The SDA has sought to fix this issue with McDonald’s and they’ve refused to resolve it, let alone admit any wrongdoing,” SDA secretary Gerard Dwyer said in a statement.

“As one of the largest employers of young people in Australia, McDonald’s shouldn’t have to be dragged through the Federal Court for workers to receive their most basic entitlements.

“Across their restaurants, McDonald’s demands consistency. They make sure each restaurant can put two beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun. It’s simply not believable that these breaks weren’t denied on purpose.

“Just because McDonald’s is a multinational, multi-billion-dollar fast food behemoth doesn’t mean they can pick and choose which laws to follow. McDonald’s has the capacity and a responsibility to ensure they’re giving workers all of their entitlements.

“These federal court claims are not just about compensation and penalizing McDonald’s, it’s about sending a clear message that this systematic exploitation of young workers will not be tolerated. We won’t stop calling out these exploitative behaviors until McDonald’s cleans up their act and compensates workers.”

The SDA is seeking thousands of dollars in compensation for workers who did not receive their legal break entitlements and is asking the court to penalize 400 employers who have operated McDonald’s sites in the past six years.

The union says the $250 million figure is a “conservative estimate”.

McDonald’s has more than 970 restaurants in Australia and employs more than 100,000 people.

The SDA’s existing federal court actions are against McDonald’s Australia and 14 franchisees, spanning 196 sites.

According to the union, more than 10,000 workers have assisted in its investigations into McDonald’s work conditions.

In a statement, a McDonald’s Australia spokeswoman the company “intends to fully defend the claim”.

“McDonald’s believes its restaurants complied with applicable instruments, provided rest breaks to employees and were consistent with historic working arrangements,” she said.

“Those arrangements have been known to the SDA for many years. The manner of taking breaks has not been challenged or raised by the SDA as a matter of concern throughout successive enterprise bargaining processes for new industrial agreements.

“We are very mindful of our obligations under applicable employment laws, including the former enterprise agreement and the Fast Food Industry Award, and continue to work closely with our restaurants to ensure employees receive all correct workplace entitlements and pay.

“We value our employees highly and the great contribution they make to the success of the business.”

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Business

SDA seeks $250m compensation from McDonald’s operators who allegedly denied paid breaks to Australian workers

Accidents continue while road works stall

McDonald’s has been slapped with a wage theft claim of at least $250 million in the Federal Court over alleged denial of paid breaks to workers.

The Shop, Distributive and Allied Employees’ Association (SDA) is seeking compensation on behalf of more than 250,000 current and former McDonald’s workers across Australia.

If successful, the union said the claim would be one of the largest of its kind in Australia’s history.

The SDA is alleging workers at more than 1,000 current and former McDonald’s sites were denied their uninterrupted 10-minute break when working four hours or more during a shift.

South Australia branch secretary Josh Peak said McDonald’s workers were told if they want their paid break, they cannot get a drink or go to the toilet.

He said in almost two years of investigation the union had heard more than 10,000 accounts from former and current employees, including young Australians, at McDonald’s stores across Australia.

“Workers were systematically, deliberately denied the rights to those breaks,” Mr Peak told ABC Radio Adelaide Breakfast.

“It’s just not good enough that a large employer such as McDonalds would create a scheme that leads to people not being paid correctly or getting base entitlements.”

The statement of claim alleged workers had to seek permission to get a drink or go to the bathroom and could be directed to resume work before their 10-minute break was up.

Mr Peak said workers were misled or not informed about their rest break entitlements and the multi-billion dollar corporation should be penalized for it.

“It is really outrageous behavior to be tricking young people into thinking they are not entitled to go the toilet if they used their paid entitlements,” he said.

“Workers never got their paid 10-minute rest break and when workers did ask for it, they were told ‘we don’t do that here because you can go the toilet whenever you like’, which is completely ludicrous.”

Josh Peak SDA
Josh Peak said McDonald’s workers should be entitled to paid breaks.(ABCNews)

The claim named 323 McDonald’s operators who allegedly denied paid rest breaks to workers over the past six years.

McDonald’s Australia issued a statement in which it denied the claims.

“McDonald’s believes its restaurants complied with applicable instruments, provided rest breaks to employees and were consistent with historic working arrangements,” a McDonald’s spokeswoman said.

“Those arrangements have been known to the SDA for many years. The manner of taking breaks has not been challenged or raised by the SDA as a matter of concern throughout successive enterprise bargaining processes for new industrial agreements.

“We are very mindful of our obligations under applicable employment laws, including the former enterprise agreement and the Fast Food Industry Award, and continue to work closely with our restaurants to ensure employees receive all correct workplace entitlements and pay.”

Claim originates from SA

The new claim is in conjunction with the SDA’s 15 existing Federal Court claims against McDonald’s Australia and 14 franchisees — seven of them in South Australia.

In December 2020, 14 McDonald’s employees at the Frewville and Mount Barker restaurants lodged a compensation claim after allegedly being denied their 10-minute rest break.

As a result of that action, the investigation extended nationwide.

A blond woman smiling in a dress with pink balloons in the background
Isabella worked at McDonald’s in Adelaide CBD.(Supplied)

Isabelle, who worked at McDonald’s in the Adelaide CBD for almost five years, said she was not given her entitled 10-minute break, but instead was allowed drink breaks freely during shifts.

“The drink break was only for 20 seconds, or as fast as you could drink and then come back to work straightaway,” she said.

“I’d spoken to my bosses about it and they just told us that we didn’t get them, they chose to do something different, and that it was legal, it was all fine.

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