Josh Cullinan, the union official who exposed the dodgy deal between Coles and the SDA union. Photo: PENNY STEPHENS. The Age. 2ND JUNE 2016 Fast food giant McDonald’s has defended not paying its workers weekend penalty rates as it came under pressure over a controversial wage deal estimated to leave nearly two-thirds of its workforce underpaid.
Senior executives at the burger chain were quizzed at a Senate inquiry on Friday about its agreement with the Shop, Distributive and Allied Employees Association (SDA) that pays no weekend and very limited late-night penalties.
The inquiry comes after a Fairfax Media investigation in 2016 found the agreement would result in nearly two-thirds of McDonald’s workers being paid less than the award – the minimum pay and conditions safety net.
The findings were based on hundreds of payslips and the leaking of an entire store’s roster that showed 63 per cent of employees at a large Sydney outlet were paid less than the award.
On Friday, Greens senator Lee Rhiannon cited pay records of an adult worker at McDonald’s who she said was more than $4000 a year worse off under the union deal when compared to the award. She also highlighted the case of a 17-year-old casual worker who was nearly $2000 a year worse off.
McDonald’s senior vice-president Craig Cawood defended the agreement and the higher hourly wages it paid.
However, he conceded that the burger giant had not conducted a financial analysis to check if workers were being paid less than the award overall.
“I don’t, in some ways, accept the premise of the question,” he said, noting that workers had voted for the deal and the Fair Work Commission in 2013 had approved it. He said he didn’t know whether McDonald’s would “employ the same number of people” if it had to pay award wages.
There are two separate Senate inquiries underway that stem from a 12 month Fairfax Media investigation into agreements between the SDA and big employers, trading penalties and other loadings. The deals are conservatively estimated to have left more than 250,000 workers paid less than the award and saved Australia’s biggest employers more than $300 million a year.
In 2016, the full bench of the Fair Work Commission, in a landmark decision, quashed an agreement between Coles and the SDA as it failed the “better off overall test”. Evidence in that Coles case showed 56 per cent of workers were paid less than the minimum award rates.
In the Senate hearings this week McDonald’s and major employers, such as KFC and Woolworths, claimed they had not done an analysis to determine whether their workers were worse off but noted that their agreements had been approved by the tribunal.
Those agreements were approved, though, before the Coles decision last year and the Fair Work Commission says it now has a more thorough approach to checking whether workers were paid enough.
The inquiry on Friday also heard evidence from five workers from companies including Coles, Woolworths and Myer, on SDA agreements that they said had left them paid below award rates.
Coles worker David Suter said he was losing between $1500 to $2100 a year from the agreement. “Every hour and every shift I work attracts reduced penalty rates when compared to the award,” he said. “I’m not looking for a handout. I want a fair day’s wage for a fair day’s work.”
The workers were part of a submission from new union the Retail and Fast Food Workers Union, which was set up late last year.
RAFFWU secretary Josh Cullinan called for a fresh parliamentary inquiry to investigate the fine detail of how many workers had been underpaid. He accused big employers of deliberately not having done those calculations or analysis.
It was time, he said, for parliament to “dig behind this and do the investigation that others have not”.
SDA national secretary Gerard Dwyer this week defended the union’s record and said loaded rates – where penalty rates are traded off for higher hourly rates – had been part of the system for decades.
He also again said the Coles decision involved a new interpretation of the law, although this has been strongly disputed.
McDonald’s Craig Cawood also supported a separate decision by the Fair Work Commission this year to cut penalty rates in fast food and retail.
He said the finding was consistent with the views of McDonald’s workers that the existing Sunday penalty rate was “neither fair or relevant”.
“As I acknowledge, the change to penalty rates does not affect us,” Mr Cawood said. Labor Senator Gavin Marshall responded that it was not possible to cut penalty rates from zero at McDonald’s.
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