McDonald’s faces ‘mega’ $250 million backpay claim in Federal Court

After two years of investigations into alleged “exploitation and award contraventions” workers union SDA is seeking backpay and compensation for more than 250,000 current and former staff of McDonald’s it claims have been systematically denied 10-minute rest breaks. 

The SDA is seeking at least $250 million in compensation and penalties in what it describes as a “mega” claim lodged with the Federal Court against McDonald’s Australia and 323 franchisees. 

In a statement, McDonald’s Australia said it would defend the claim.

At the heart of the action is that the company has denied paid rest breaks at nearly 1000 current and former McDonald’s sites, which would be in contravention of their entitlement under the Fast Food Award which prescribes one uninterrupted 10-minute break when working four hours or more.

The SDA alleges that McDonald’s workers were not told they were entitled to rest breaks – or that they were told breaks could be exchanged for a free soft drink or a visit to the restroom.

The union alleges the denial of the paid rest breaks and “exploitation” was systematic and deliberate, arguing that McDonald’s Australia “aided and abetted franchisees” in the practice.

The SDA describes the claim as one of the largest in Australian history, impacting more than 1.8 per cent of the country’s workforce.  

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

“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.”

The new claim follows 15 existing claims against the fast food company and 14 of its franchisees already with the Federal Court. 

“These Federal Court Claims are not just about compensation and penalising McDonald’s, it’s about sending a clear message that this systematic exploitation of young workers will not be tolerated,” said Dwyer.

“We won’t stop calling out these exploitative behaviours until McDonald’s cleans up its act and compensates workers.”

A McDonald’s spokesperson told Inside Retail in an email that the company believes its restaurants complied with applicable instruments, provided rest breaks to employees and were consistent with historic working arrangements.

“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,” the spokesperson said.

“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.”

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