McDonald's accused of not paying staff correct holiday pay or lieu days

Tuesday, 24 April 2018

Unite Union has accused McDonald's of incorrectly paying staff.

McDonald's workers could have missed out on lieu days or correct pay for working a public holiday at least twice a year for nearly a decade, a union group claims.

Unite Union extrapolated from 50 employees' wage and time records dating back three months, that McDonalds may owe each of its workers at least $150 a year in the value of their missed lieu day or holiday pay twice a year. The calculation is based on two five-hour shifts.

It comes after a decision by the Employment Relations Authority (ERA) in November 2017, which stated that fast food chain Wendy's way of calculating its holiday pay and lieu day entitlement was illegal.

Unite Union's national director Mike Treen said it wanted McDonalds to get rid of its three-week formula, too, which only gave a day in lieu to employees working the same day of the week over the three preceding weeks.

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In the ERA determination, the authority said Wendy's calculations of day-in-lieu entitlements with a three-week test was illegal and ordered it to consider the circumstances of each employee on a case-by-case basis.

Treen said despite having come to an agreement with McDonald's to change the three-week test to three out of five weeks, the union was asking for a further amendment to employees' day-in-lieu entitlement to seven out of 13 weeks.

'We want McDonalds to recognise a three-month average for calculating days in lieu and go back nine years to give employees what they're owed.'

McDonald's NZ spokesman Simon Kenny said the company's situation was different from Wendy's because it had already agreed with the union to extend the three-week test to three-out-of-five for calculating alternative holiday or lieu days.

'We are working to the best of our ability and in consultation the Ministry of Business, Innovation and Employment to ensure the process followed provides a fair outcome for current and former employees,' Kenny said.

McDonald's was also working with a third-party payroll expert to audit another problem it had found regarding annual leave payment calculations, Kenny said.

'We have committed to do everything we can to pay whatever is owed to current and former employees,' Kenny said.

Treen said, with about 9000 staff losing on average two days' pay each year, the lost wages could be worth over $1 million a year.

The ERA ordered Wendy's to review all public holidays worked by all staff across all 23 stores since 2012 and credit anyone with a day in lieu if they should have been entitled to one, or pay them the dollar equivalent if they no longer work there.

Labour Inspectorate national manager Stu Lumsden said it was also working with McDonalds to resolve the issues of pay affecting workers in jobs that have fluctuating hours.

'McDonalds is co-operating with the Inspectorate to resolve these issues, and we continue to monitor their progress with the expectation where applicable they will fix their systems and pay any remediation owed,' Lumsden said.

'We are working with other large employers to ensure they address issues of non-compliance – but with this work ongoing the details we can provide at this time are limited. Every employer must meet their obligations.'