Finance Work McDonald’s accused of exploiting young workers

McDonald’s accused of exploiting young workers

McDonalds staff
McDonald's has been accused by former staff of churning its workforce to cut staff costs. ABC News: Jerry Rickard
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McDonald’s Australia has been accused of systematically “churning” its workforce and reducing shifts for workers as they grow older in a bid to cut costs and hire younger staff.

The global fast food chain is a major employer in Australia with more than 100,000 workers in stores across the country, which are mostly franchises.

But the company and its franchisees have come under scrutiny for engaging in what has been described as a practice of “churning” staff as they grow older to hire younger and cheaper staff.

McDonald’s Australia chief executive Andrew Gregory denied there was any widespread practice across stores.

“We take it really seriously to do the right thing and uphold our employment standards,” he told 7.30 in an interview.

“Half of the workers in our restaurants are over 18, and it’s not good business practice for us to not employ those people over 18.

“We need them to run our restaurants.”

Nelio Da Silva started working at a McDonald’s in Melbourne when he was 16.

But as he got older he noticed his roster was changing.

“Over time I started to get less and less shifts … it wasn’t straight away, it was over time,” he told 7.30.

“I got less shifts because I got older, and definitely more expensive.

“They wanted to give shifts that they could to the younger people.

“I’ve talked to many of my friends. They all started to drop off and eventually, we all started to leave.”

Other staff in stores around the country raised similar concerns.

Max Beech began working at a McDonald’s in Queensland when he was 16 and moved to a Brisbane store when he was 18.

He says getting rid of older workers was an “unspoken rule” between managers.

“A lot of the time they talked about how they were trying to get rid of certain people for this reason or that reason — a big one was when people were getting too old,” he told 7.30.

“So people turning 18 or 19, they’d start to talk about phasing them out because they were getting too old and they’d have to pay them too much.

“And that was a common thing.”

‘Soul crushing’: Former McDonald’s staff speak out

Mr Beech worked night shifts in a fast-paced store in Brisbane’s nightlife centre, and said he found the work “soul crushing” at times.

“People tend to treat people who work in fast food as a means to an end,” he said.

“They don’t see them as people.”

He described the pressure placed on young staff members as extreme, and recalled one incident where a customer who was seeking a cup of water — which Mr Beech wasn’t allowed to provide — attempted to assault him.

“Despite my explaining it to him, he wouldn’t leave and then tried to take a swing at me,” he said.

Former McDonald’s employee Max Beech. Photo: ABC News

“That sort of stuff happens a fair bit.

“It wasn’t too bad because I knew that my work friends, the other crew who work were friends of mine, they’re there to back me up if anything did ever happen.

“But it’s still scary to think that something like that could happen in the workplace.”

Mr Gregory told 7.30 that McDonald’s had strong systems in place to ensure stores across the country were safe working environments.

McDonald’s system ‘exploitative’

The secretary of the Retail and Fast Food Workers Union, Josh Cullinan, told 7.30 the McDonald’s system was “exploitative”.

“They use casual employment and junior rates to basically cycle workers off under the apprehension that those workers are going to get more hours as they get more skills in the workplace. That’s not what happens,” Mr Cullinan told 7.30.

“These workers are fodder in the McDonald’s business model and, unfortunately, that means these workers just aren’t aware often, and their families aren’t aware, that as they turn a year older, their birthday is celebrated with fewer hours.”

In Australia, paying junior rates is legal. Under most awards this allows employers to pay children who are 14 just 50 per cent of the hourly wage.

These rates increase progressively by 10 per cent on each birthday until an employee reaches 21.

The 2013 McDonald’s enterprise agreement sets out that, as of July 2016, employees in NSW aged 14 could be paid as little as $8.43 an hour.

According to Mr Cullinan, these junior rates create an incentive for McDonald’s to hire younger and cheaper staff and gradually phase out older casual employees as part of a practice that is known as “learn and churn”.

This phrase explains the process of staff either “learning” by becoming managers, or being churned as they grow older.

“The system that’s used at McDonalds is exploitative and it should stop,” Mr Cullinan said.

“Not one of them is told, ‘When you get this job with us, when you blow out the candles on your next birthday cake, your hours are going to be cut’.”

McDonald’s ‘largest employer of youth in Australia’

According to the company’s own data, McDonald’s and its franchisees employed 103,136 Australians across the country as of February 2018.

67,332 of those workers are aged between 14 and 18.

One McDonald’s franchisee who gave evidence as part of the fast food award review acknowledged in a Fair Work Commission case in July 2018 that he was aware of the practice of “learn and churn”.

He acknowledged that he relied on rostering young workers because they are cheaper, and that as they grew older he needed to be able to roster on younger workers.

But Mr Gregory denied that the company’s stores practised “learn and churn”.

“That phrase I hadn’t heard until we saw it come up in the testimony or in the affidavit of the recent award review, and it’s not something that’s present or existing and I wasn’t aware of it previously in McDonald’s,” he told 7.30.

He said he had spoken with the franchisee who gave the evidence at the Fair Work Commission and he was a well regarded franchisee who “didn’t mean his reference to that term that he used previously”.

Mr Gregory said McDonald’s was proud of the role it played in supporting young Australians into their first jobs, and he welcomed speaking to any staff who felt they had been let down or received fewer shifts.

“I’d be really keen to understand who you’ve spoken to, to try and understand the individual circumstances,” he said.

“If we haven’t fulfilled our obligations and met our high expectations on how we employ crew, I’d be really disappointed and I’d love to understand and make good those situations.

“We feel it’s bad business practice on our behalf if that’s happening.”