Chief Justice Bell's 800 page judgement was handed down on Thursday 19th June 1997 after his presentation of the Summary - the whole judgement is presented here for your enjoyment.
10. Employment practices.
The words complained of start with a headline, "What's it like working for McDonald's?"
After the headline, the text complained of reads as follows:
"There must be a serious problem: even though 80% of McDonald's workers are part-time, the annual staff turnover is 60% (in the USA it's 300%). It's not unusual for their restaurant-workers to quit after four or five weeks. The reasons are not hard to find.
NO UNIONS ALLOWED
Workers in catering do badly in terms of pay and conditions. They are at work in the evenings and at weekends, doing long shifts in hot, smelly, noisy environments. Wages are low and chances of promotion minimal.
To improve this through Trade Union negotiation is very difficult: there is no union specifically for these workers, and the ones they could join show little interest in the problem of part-timers (mostly women). A recent survey of workers in burger-restaurants found that 80% said they needed union help over pay and conditions. Another difficulty is that the 'kitchen trade' has a high proportion of workers from ethnic minority groups who, with little chance of getting work elsewhere, are wary of being sacked - as many have been - for attempting union organisation.
McDonald's have a policy of preventing unionisation by getting rid of pro-union workers. So far this has succeeded everywhere in the world except Sweden, and in Dublin after a long struggle.
TRAINED TO SWEAT
It's obvious that all large chain-stores and junk-food giants depend for their fat profits on the labour of young people. McDonald's is no exception: three-quarters of its workers are under 21. The production-line system deskills the work itself: anybody can grill a hamburger, and cleaning toilets or smiling at customers needs no training. So there is no need to employ chefs or qualified staff - just anybody prepared to work for low wages.
As there is no legally-enforced minimum wage in Britain, McDonald's can pay what they like, helping to depress wage levels in the catering trade still further. They say they are providing jobs for school-leavers and take them on regardless of sex or race. The truth is McDonald's are only interested in recruiting cheap labour - which always means that disadvantaged groups, women and black people especially, are even more exploited by industry than they are already."
The Plaintiffs pleaded that the words which I have quoted from the leaflet, "in their natural and ordinary meaning, meant and were understood to mean that the Plaintiffs and each of them
[O] Have taken advantage of the absence of the minimum wage in Britain to pay what they like, helping thereby to depress wages in the catering trades.
[P] Are only interested in recruiting cheap labour, and to this end exploit disadvantaged groups, women and black people especially."
The leaflet says that McDonald's workers do badly in terms of pay and conditions. It is true that it refers to "workers in catering" rather than McDonald's workers specifically, but this section of the leaflet is directed at McDonald's as the headline makes clear from the start. Again I believe that the ordinary, reasonable reader would take McDonald's to include whoever is responsible for running McDonald's restaurants around the world (the First Plaintiff) and in this country where publication is complained of (the Second Plaintiff). To my eye and ear the text somewhat moderates the description of workers doing "badly" in terms of pay by immediately going on to describe wages as "low".
Although the text carries the message that the Plaintiffs take advantage of the absence of any specific union for their workers, I doubt that this is defamatory and it adds nothing to the general sting of low pay for bad working conditions.
The leaflet expressly says that McDonald's have a policy of preventing unionisation by getting rid of pro-union workers.
The leaflet says that McDonald's have helped to depress wages in the catering trade still further in Britain. Although it refers to British wages which are paid by the Second Plaintiff and not the First Plaintiff in fact, I believe that the ordinary, reasonable reader would take the charge to refer to whoever was running McDonald's throughout the world, including Britain, as well as the British operator.
Although the text carries the message that the Plaintiffs take advantage of the absence of a legally-enforced minimum wage in Britain, I doubt that this is defamatory and it adds nothing to the charge of further depressing wage levels.
The leaflet says that McDonald's are only interested in recruiting cheap labour, which means that disadvantaged groups, women and black people especially, are exploited.
The Plaintiffs' meaning [P] carries, for me, the sting that the Plaintiffs target disadvantaged people, women and black people especially, because they are only interested in cheap labour. In my view the leaflet does not go that far, but it juxtaposes being only interested in cheap labour with the further exploitation of disadvantaged groups, women and black people especially, and it clearly means that as a result of the Plaintiffs being interested only in cheap labour, rather than the provision of jobs for school leavers and equal opportunity regardless of sex and race, as they pretend, they end up exploiting those who are at a disadvantage on the job market, women and black people especially, even more.
There was some debate as to whether one could "exploit" workers, in the sense of making use of them or benefitting from them, without behaving badly. In my judgment the exploitation alleged in this part of the leaflet is culpable because its object is disadvantaged people.
The leaflet does not accuse the Plaintiffs of discriminating against women or black people on the grounds of sex or race, and the Plaintiffs' pleaded meanings do not allege that it does make that accusation, although there were times during the hearing when all the parties appeared to believe that it did.
Of course, if the truth was that women and black people were targetted as cheap labour or discriminated against by the Plaintiffs, it would help to show that the allegations of exploitation and bad conditions generally were true.
In my judgment this part of the leaflet bears the meaning that the First and Second Plaintiffs pay their workers low wages and provide bad working conditions, helping to depress wages for workers in the catering trade in Britain; that they are only interested in recruiting cheap labour and exploit disadvantaged groups, women and black people especially, as a result; and that they have a policy of preventing unionisation by getting rid of pro-union workers.
This meaning falls within the meanings pleaded by the Plaintiffs, taken together, and in my judgment it is defamatory of them; damaging to their trading reputations, tending to lower them in the estimation of right thinking members of society generally, making people reluctant to deal with them and, particularly, tending to impede the recruitment of suitable staff.
In my judgment, it is defamatory of a commercial, trading company to say that it pays its workers low wages. It is more defamatory to say that it is only interested in recruiting cheap labour and that it exploits disadvantaged groups, women and black people as a result. It is also and separately defamatory to say that it provides bad working conditions, but the real, general sting of this part of the leaflet is the combination of low pay and bad working conditions: low pay for bad conditions.
The allegation that the Plaintiffs have a policy of preventing unionisation by getting rid of pro-union workers is not just part of the general sting, it is a specific defamatory charge of its own.
On balance I do not believe it to be defamatory of a corporation to say simply that it is "anti-union" which is what the Defendants were determined to prove to be true of each of the Plaintiffs. But it is clearly defamatory to say that the Plaintiffs have a policy of sacking employees who have union sympathies. In my view such a policy, were it to exist, would be likely to affect the Plaintiffs adversely in the estimation of reasonable people generally because it is generally and rightly accepted that, save perhaps in exceptional circumstances which do not exist here, any employee should be allowed to join and promote a union without fearing for his job provided, at least, that his union activities do not cut into his working time.
Although saying that workers do "badly" in terms of pay and conditions or that wages are "low" might appear to be expressions of opinion or comments in many contexts, I judge the defamatory statements in this part of the leaflet, or "factsheet", as the Defendants called it, to be statements of alleged facts. Apart from the introductory statements to the leaflet as a whole, this section of the leaflet begins with the headline question "What's it like working for McDonald's?" Clearly what is to follow are the facts, or alleged facts, about working for McDonald's. Although the first words of the text -"There must be a serious problem" - are opinion or comment, I see everything which follows as categoric statements of fact.
It follows that if the Defendants are to defend the defamatory charges successfully, they must justify them by showing them to be true in substance and in fact.
The evidence relating to the Plaintiffs' employment practices took nearly one hundred court days spread over nearly eleven months. There were four main reasons for this.
Firstly, the general nature of the charges of bad working conditions for bad pay, and exploitation, led to evidence covering a wide variety of employment practices within the McDonald's system.
Secondly, the Defendants' attempts to justify the allegations made in the leaflet depended largely upon the evidence of witnesses who had worked in a number of McDonald's restaurants, mostly in England but in some other countries as well. The Defendants faced the argument on behalf of the Plaintiffs that there are hundreds of McDonald's restaurants in this country, and thousands around the world, so that even if the evidence of malpractices in some stores was reliable, they should be seen as aberrations due to inevitable but occasional human failure to follow the systems and policies of the Plaintiffs, and the training provided by the Plaintiffs, rather than failures inherent in the system itself. So the Defendants wished to call as many witnesses as they could about as many restaurants as they could.
Thirdly, the Plaintiffs were understandably reluctant to rely solely on the argument that there are always lapses from proper practice in any large organisation, however well run. So where they had witnesses to contradict the evidence of the Defendants' witnesses, by and large they called them. Once it was clear that there was a real conflict of evidence about what had happened in a particular store, neither side was prepared to restrict its available evidence on the point significantly, and I did not feel inclined to impose restrictions in a well-publicised case where the reputations of individual managers and crew were under attack and where any significant restriction of the numbers of witnesses to be called on either side might lead to false conclusions on my part.
Finally, the Plaintiffs called senior executives of the First Plaintiff, McDonald's Corporation, about practices in the USA and other countries as well as executives and senior managers employed by the Second Plaintiff in this country, to speak of proper procedures and to refute numerous allegations pleaded by the Defendants, whether the Defendants appeared to have actual, admissible evidence of the allegations or not. Before the trial started, the Court of Appeal ruled that the Defendants could plead particulars of justification of which they had no clear and sufficient evidence at that interlocutory stage, provided that they believed the words complained of to be true, and they intended to support the defence of justification at trial, and they had reasonable grounds for supposing that sufficient evidence to prove the allegations would be available at trial, not necessarily from their own documents or witnesses, but to be elicited, for instance, from the Plaintiffs' witnesses in the course of cross-examination or in the form of documents disclosed by the Plaintiffs on discovery. The Defendants made the greatest possible use of their opportunity to cross-examine the Plaintiffs' witnesses in search of evidence which they lacked from their own witnesses, and of their opportunity to question the Plaintiffs' witnesses to see if relevant but undisclosed documents existed. This applied in all those areas of the case where the Defendants had information as yet unsupported by admissible evidence, but it applied particularly to the investigation of the Plaintiffs' employment practices.
From the mass of evidence I propose to refer to the matters which I found most illuminating of the Plaintiffs' employment practices, or which the Defendants appeared to me to rely upon most and I will do that under five broad heads; matters of background and of general relevance, pay and matters related to pay, working conditions apart from pay and apart from union representation, the Plaintiffs' attitudes to unionisation and to employees who have favoured unionisation, and finally their attitudes to the employment of women and black people.
I have already said that at the end of 1990 there were about 11,800 McDonald's restaurants in a total of 53 countries. About 8,600 of them were in the USA. About 6,800 of the US restaurants were owned and run by franchisees. By the end of 1995 there were about 18,400 restaurants in 89 countries. About 11,400 of them were in the USA; between about 8,200 and 9,200 of them franchised. I can not give the exact figure because I do not know how many satellite restaurants were franchised. At the end of 1990 there were about 380 McDonald's restaurants in Britain; about 650 by the end of 1995, and 674 in May,1996. Franchising has only been popular in the UK in the last few years as a result of a change in McDonald's policy here, and the proportion of franchised restaurants is much smaller than it is in the USA. In May,1996, 523 of the 674 UK restaurants were company owned and 151 were licensed to about 120 franchisees. The typical UK franchisee has only one or two restaurants, whereas some US franchisees have considerable strings of restaurants and are very large businesses in their own right. The First Plaintiff and its subsidiaries worldwide, including the Second Plaintiff in this country, have a degree of control and supervision of franchised restaurants, and the system of operation of all McDonald's restaurants is similar; but the employer of staff in franchised restaurants is the franchisee - man, woman or company - who arranges his own pay rates and terms and conditions of employment, so one might expect them to vary to some extent from restaurant to restaurant, particularly in the USA where the franchisees appear to be more independent. In fact Mr Nicholson who has been heavily involved in U.K. franchising since 1984 thought that there were no significant differences as far as pay and hours were concerned between the Second Plaintiff's own restaurants and the franchisees in the U.K. The company's Operations Manual has applied in both kinds of stores. I have no reason to doubt what he said, and if that is so I would expect other conditions of employment to be very similar in the U.K.
The position in other countries and in the U.S., where most McDonald's restaurants are run by franchisees, was less clear.
Mr Stan Stein, the First Plaintiff's Senior Vice President of Personal and Labour Relations with overall responsibility for personnel and labour relations in the U.S. and for providing a consulting service to all McDonald's personnel departments throughout the world, said that its Franchisee Crew handbook was "a model handbook, not a required thing" from which an owner operator could pick and choose pages and to which he could make additions, pertinent to his store. Mr Robert Beavers, a member of the First Plaintiff's Board of Directors, said that the Corporation's management and operating philosophies were "pretty much the same worldwide" for the most part, but subject to local laws and customs. That applied to employment conditions as it did to other business matters. The Corporation provided franchisees with "pretty broad parameters in which to operate". It gave initial training and, later, information, guidance and counselling, but franchisees had "a pretty broad, pretty big playing field in which to operate......We do not dictate to them what they should do with regard to employment, but we provide guidance and counsel and some pretty broad operating philosophy". Flexibility was important. On the other hand Mr Beavers went on to say that in the U.S. there tended to be no significant difference in employment conditions, pay and hours between the corporation's own restaurants and franchisees' restaurants which were visited and inspected by consultants employed by the Corporation to which the reputation of all "McDonald's" restaurants was important. Some countries were stronger than the U.S. in terms of what was expected of the franchisee or the national subsidiary or joint venture partner.
The size of restaurants varies considerably, but they normally have between about 50 and 100 people on their payrolls, scheduled to work according to the amount of trade which is anticipated.
Mr John Atherton, the Second Plaintiff's Head of Training said that by 1993 just over 30,000 people were employed by the company, not including franchisees' employees in this country. The number had increased over the years as the size of the operation had increased.
In June,1990, Mr Stan Stein, the First Plaintiff's Senior Vice President, Personnel and Labour Relations reported to a Congressional Sub committee that the First Plaintiff employed approximately 100,000 people: 4,200 corporate staff, 7,000 salaried Restaurant Managers and Assistants, and approximately 85,000 hourly paid crew employees. He estimated that franchisees in the U.S. employed approximately 400,000 people, of whom about 350,000 were paid on an hourly basis.
However, Mr James Marshall, the First Plaintiff's Staff Director of Insurance and Safety, estimated that by 1994 when there was a total of 9,744 McDonald's restaurants, 8,888 franchised and 1,556 the Corporation's own (McOpCo), there were just over a million employees in all of the restaurants, 168,000 of them in McOpCo restaurants.
The normal hierarchy within a McDonald's restaurant, working upwards, starts with ordinary crew members. Above them come Floor Managers ("Swing Managers" in the U.S.and Canada) who usually run a part of the restaurant when they are on duty. They may, however, run the whole restaurant for a shift as a Shift Running Floor Manager. Then come Trainee Managers, Second Assistant Managers, First Assistant Managers and Store Managers. Above the restaurant management are Area Supervisors who supervise three or four restaurants, and Senior Supervisors, later called Operations Managers, who are responsible for about twenty restaurants. Area Managers operate above these.
In restaurants owned by the Second Plaintiff all employees up to and including Floor Managers are paid by the hour, and everyone from Trainee or Assistant Manager upwards is salaried, with no extra pay for long hours if they occur.
Crew, Floor Managers and First or Second Assistant Managers may be part-time.
The great majority of hourly paid staff work part-time. Both Mr Stein and Mr Beavers said that in the U.S. 80% of McDonald's crew were part-time. Mr Nicholson said that it suited McDonald's in this country to have 80% working part-time. Mr Frank Stanton, Midlands Regional Manager, said that when he was restaurant manager in Leicester in the mid-1980s about 70% worked part-time. At Colchester it was 60% or 70%. But the proportion of part-timers might have increased by the time that he gave evidence in 1995. Ms Lyn Meade, a regional Human Resources Manager of the Second Plaintiff, produced figures which indicated that 75% or so of staff worked up to 25 hours a week.
Estimates of the average hours for part-time workers in this country varied. Mr Preston said that the average was 25 to 26 hours a week. Mr Nicholson said 20 hours. Ms Meade's figures showed 67% working up to 20 hours or less, 27% working between 20 and 39 hours, and 6% working more than 39 hours. (11% were recorded as working no hours but there was an explanation for this). However, it was clear from the general body of evidence that a significant number of staff worked only four to eight hours a week, perhaps just a Saturday or an evening shift. A small nucleus of core staff worked true full time hours of 35 to 39 hours a week.
Mr Stein said that the average number of hours worked by hourly paid employees in the U.S. was a fraction over 23.
Very broadly equal numbers of men and women are employed in McDonald's restaurants in the UK. In the U.S. about 58% of the First Plaintiff's own service workers are women. There was no reason to believe that franchisees employed significantly more or less women. The proportion of employees who are black was rather less clear, because Mr Stein's figures for ethnic minorities was the same as Mr Beaver's figure for ethnic minorities and women together. I did not have figures for black workers or workers from ethnic minorities in the U.K.
Staff in McDonald's restaurants, even the managers, tend to be young. According to Ms Meade, 62.4% of hourly paid U.K. employees were aged between 16 and 20 in 1990, and in 1994 the figure was 64%. As far as I could tell from the figure put before me, about 75% of U.K. hourly paid employees were under 21 at material times. Mr Beavers said that in the U.S. a little less than that percentage were under 21, but it was still a majority of hourly paid staff.
Mr Stein said that about 48% of hourly paid workers in the First Plaintiff's own U.S. restaurants were under 19.
The Second Plaintiff's Fact Book said that 9.31% of employees were over 30.
Many of the Plaintiff's witnesses, now in high positions, including Mr Beavers and Mr Preston, started working for McDonald's when they were students who wanted the opportunity to earn some money working part-time on more or less flexible scheduling. This also suits the McDonald's system of restaurant operation.
The McDonald's system is that numbers of staff on duty at any particular time of day in any particular restaurant should be carefully "scheduled" so that there are enough of them to provide quick service to the anticipated numbers of customers at any given time without more of them than necessary being there to be paid.
Mr Stein said that the attraction and skill of effective scheduling was to match up the individual employee's requirements with the requirements of the restaurant. The Defendants complained that close scheduling led to high pressure work throughout the whole of a shift, and to rushed overwork if scheduling was too tight or if scheduled workers did not turn up and could not be replaced.
Custom can vary enormously according to the day of the week and the time of day and the situation of the particular restaurant, but Saturday lunch times are universally and particularly busy.
There is a policy of careful and controlled budgeting of all costs, including labour, in McDonald's restaurants, and one of the big issues as the evidence unfolded was the extent to which, if at all, labour costs could be screwed down by requiring fewer staff to work harder and faster without loss of trade or loss of potential increase in trade because of loss of efficiency in serving customers.
As might be expected, there was much more evidence about working conditions in the U.K. than there was about other countries including the U.S. Obviously the Second Plaintiff is responsible for any general, low standards of working conditions in the U.K., but in so far as they stem from the universal nature of the McDonald's system the First Plaintiff must also be responsible for them, in my view.
The criticism of the First and Second Plaintiff's pay rates related to hourly paid workers rather than to management. This was understandable since the leaflet refers to "workers" in catering which clearly refers to those working at lower levels, in my view. I heard much more evidence about rates in the U.K. than elsewhere.
The system by which pay rates have been fixed by the Second Plaintiff has remained essentially the same. Each new employee starts work on a basic rate fixed in relation to the area in which he works, Inner London, Outer London or Provincial, with some minor upward variations designed to cope with local recruitment problems if they arise.
The new employee starts on this basic, starting rate for a three week probationary period, wearing a green badge.
After three weeks there is a Performance Review. If the "green badge" passes this test, he or she gets a yellow badge, and normally a pay rise of 5p, 10p or 15p per hour on top of the basic hourly rare, 10p probably being the most frequently awarded.
"Yellow badges" can collect up to five stars. Once they have all five stars they are qualified to become "training squad" with a white badge, judged competent to train new starters.
Beyond that the hourly paid worker can get his "shirt and tie" as a Floor Manager, coming out of crew uniform and going into a manager's uniform, but still hourly paid.
The scheme of pay reviews throughout the period with which I am concerned was that after the probationary period, crew should have Performance Reviews every two months with pay reviewed on every other Performance Review. So there was the prospect of a rise every four months. That was the system at the time of relevant publication of the leaflet.
The idea was and still is to relate pay to a crew member's performance to some real extent. The rises, if given, were again 5p, 10p or 15p. The evidence on the spread of awards varied, but the gist of it was that about 10% received no award, broadly 50 to 70% of people reviewed would receive a 5p increase, about 20% would receive 10p and between 5 and 20% would receive 15p.
Members of crew who have provided a particular service, for instance thinking of a new idea in the store's operation, are sometimes given a lump sum bonus. People who work particularly well may be given an impromptu rise in their hourly pay but this seemed to be rare.
Pay rates rise as a crew member moves up the promotion ladder because it is thought desirable to make sure that everyone on a higher rank should earn more than even the most senior person on the rank below. There was some evidence of Performance Reviews being delayed under pressure of other work or of them not being carried out at all on occasions. On some occasions when Performance Reviews were late, awards of pay increases were backdated to compensate.
There was criticism that too much depended on the reviewing manager's subjective judgment. However, I do not accept that risk of favouritism or the need to use subjective judgment invalidated the whole idea of pay increases for supposed performance, which was what Mr Morris appeared to suggest. When Mr Stanton was asked if pay increases went to "toadies" and "creepers" when he was a restaurant manager he said that such a course would mean that he would be left with all the toadies and everyone else would have left the restaurant. He thought that everyone responsible for Performance Reviews had a certain amount of integrity and responsibility. You would not have a restaurant "team" if everyone agreed with what the Restaurant Manager said. I accept that as good sense.
It is obvious that a manager carrying out pay reviews has to be able to face all hourly paid staff in his restaurant. No doubt crew get to know who has got what rise. Indeed some restaurants had "rise charts". If a manager is to have a happy, effective ship he must do his best to be seen to be acting fairly.
In any event there was little or no evidence of pay rises being awarded when they were undeserved and it was the Defendants' own case that the Second Plaintiff's inclination was to pay as little as possible and that the marks required to pass Observation Checklists (OCLs in the U.K., OCs in the U.S.) of the skills and knowledge required for the various tasks and duties were high.
On the other hand there was little or no satisfactory evidence of pay rises not being awarded when they should have been. Allegations to this effect are difficult to judge.
When students working for the Second Plaintiffs during holidays leave to go back to college or mothers leave at the end of a school term, they are usually removed from the payroll within a few weeks, so that if they return they are theoretically new starters who could be placed on the basic rate even though they have previously received rate enhancements in pay reviews. However, I heard evidence which I accept that ex-employees who returned after a break were often taken back at a rate which reflected any enhancement which they had previously received on top of the current basic rate, even if the basic rate had increased in the meantime. This would be especially likely to happen if the employee indicated when leaving that he or she was likely to be back.
I accept that this course was not only fair between employer and employee, it was sound commercial sense in that the Second Plaintiff was more likely to see the return of experienced, trained employees who could start the job straightaway. Mr Stanton said that it worked well in practice.
Mr Beavers gave evidence of the same practice in the U.S.
Until about June,1987, it was possible for a long standing employee who was on a rate which included pay review enhancements, to slip back nearer to the basic pay when that was raised from time to time. But thereafter crew received the rise in basic pay on top of their already enhanced pay, thus maintaining the differential.
Quite apart from performance related rises in a crew member's hourly rate, rates differed depending on the time of day. The regular rate ran from 7am until 7pm. Then there was an evening rate until midnight: then a premium rate through the night.
Premium rate was phased out from June,1991.
The Second Plaintiff has never paid "overtime" in the sense of "time and a quarter" or " time and a half" for hours worked over normal full-time of 39 hours a week, and the company initially sought to justify this by saying that it was company policy for people not to work more than 39 hours per week and that they rarely did so, and that it was reasonable not to pay overtime in the context of the company's particular system of frequent performance related pay reviews and different rates for uncongenial, late hours.
As the evidence unfolded and there was more disclosure of documentation from sample restaurants it became clear that a significant proportion of full-time workers worked more than 39 hours a week quite frequently, presumably when there were too few crew on the payroll. From various disclosed documents it looked as if about 5% of crew worked over 39 hours in any given week, which would mean about 25% of the full time workers.
So the second limb of the Second Plaintiff's case, that the company's system of frequent performance related pay reviews and a higher evening rate and, until June,1991, a night-time premium rate compensated for lack of overtime pay, came more to the fore.
In my view lack of overtime rates did harm the earning prospects of the Second Plaintiff's crew, compared with the generality of other comparable employers who - it appeared to be accepted - did pay overtime. Not following the general course of paying overtime pegged back with one hand to some extent what had been given by another in the form of evening and premium rates.
At one time Wages Councils set minimum wage rates under a statutory scheme which governed the Second Plaintiff's wage rates.
In 1986 the obligation to pay not less than the minimum rates fixed in considerable detail by Wages Councils was abolished in respect of employees under 21 but the Second Plaintiff paid those who were 18 and over the statutory minimum for twenty one year olds.
In 1993 Wages Councils and minimum wages were abolished altogether.
There has always been a Federal minimum wage and a higher one in some States, in the U.S.
There was a fierce argument as to whether it was illegal not to pay special overtime rates in the years when Wages Councils laid down minimum basic hourly rates and minimum overtime to be paid on top.
The Defendants argued that the Second Plaintiff was bound to pay the statutory higher rate for overtime. The Second Plaintiff argued that provided that the weekly wage of all their individual employees who had mostly received some pay increase above the basic rate and received some evening or premium pay if they were full-time, came above the minimum weekly wage, calculated by following the Wages Council Orders on minimum rates and overtime, there was no illegality. They called some evidence that the Wages Council Inspectorate accepted this. I do not have to decide whether the Second Plaintiff's approach was strictly legal or not. I am quite sure that it was wrong because it meant that there was always a risk that a full-time worker who was still on the basic wage or close to it, who did not work any or many premium hours but worked well over 39 hours a week, would end up with less than the Wages Council rates provided for. Yet there was no check in the Second Plaintiff's systems to ensure that the weekly pay was not less than the Wages Council minimum.
This in fact happened on occasions in the case of Mr Siamak Alimi who worked at the Colchester restaurant in the early to mid 1980s. His payslips showed that over the two weekly pay periods used by the Second Plaintiff he had on occasions received less than the statutory minimum for the hours which he had worked, including overtime. Yet he did not realise that until some sums were done for the purpose of the trial. I have no reason to believe that management at Colchester realised that there was a shortfall and I reject Mr Morris's contention that the Second Plaintiff adopted two-weekly pay periods to cover up shortfalls, but the fact is that the Second Plaintiffs "no overtime" approach involved a risk of underpay which led to underpay on occasions. I do not accept the Second Plaintiff's contention that following the Wages Council system involved unnecessarily complicated calculations of pay. Systems could easily have been set up to cope with that.
At all material times the First Plaintiff was obliged by U.S. law to pay overtime, although that had not always been so, and it did so. Mr Beavers, the highest ranking of the McDonald's executive witnesses on either side of the Atlantic, said that in his personal opinion it was a fair law.
Having said all this, the factors of performance related enhancements of the basic rates on the one hand, and lack of overtime for the 25% or thereabouts of full-time workers are all matters to be taken into account when judging whether the Second Plaintiff's rates of pay were low.
The Second Plaintiff's employees are not allowed to accept tips from customers. It is gross misconduct to do so. The theory is sound. Customers should know what they will pay for their food and drink without feeling any obligation to add a tip. It means that crew lose the possibility which those serving in other restaurants might have, of supplementing their formal pay with tips. But many people with jobs which can fairly be compared for pay, assistants in shops or supermarkets for instance, do not get tips either.
McDonald's crew starting rates in this country have always been the statutory minimum or close to it, when there was such a minimum.
I was given a schedule of figures of starting rates in Inner London, Outer London and Provincial areas for regular, evening and premium hours from 1983 to 1992.
As from June,1986, the provincial regular starting rate was £1.99 per hour rising to £2.22 for Inner London. Crew who were under eighteen years of age got less.
From June,1988, the provincial regular rate was £2.20 per hour rising to £2.43 for Inner London. From June,1990, the equivalent figures were £2.60 and £3 and from June,1992, £3 and £3.30.
The main plank of the Second Plaintiff's defence of its rates of pay was that they were "competitive", taking into account the prospects of pay reviews and enhancements, evening and premium rates. Mr Preston would not accept that the wages paid by the Second Plaintiff were low. He defended them by saying that "a business has to survive on the High Street. It is in competition with other businesses for staff. If it does not pay a competitive wage, it does not stay there. If it overpays, sooner or later it goes broke, and there is no business to employ anyone in the first place. So we have a kind of Catch 22 ...... You therefore follow the market place. It is just sense". He said that if you wanted good people you had to pay a fair wage. The Second Plaintiff's wages were totally comparable with everything else available on the High Street or in industry for the ability and availability of the people in question.
Mr Nicholson said that the company did not negotiate with anyone about pay. It responded to the market.
Ms Meade said that the Second Plaintiff "took the question of pay seriously because in order to initially recruit and also to retain employees, we need to make sure that we are paying them along with the market rate and so on".
Mr Beavers said that McDonald's in the U.S. was competitive with overall working conditions including pay in the same kind of industry. Its pay was "probably generally better".
There was material upon which I could compare the Second Plaintiffs' starting rates with other employers' rates for equivalent work in the U.K., but not really in the U.S.
Ms Meade produced various helpful schedules of average pay rates from the New Earnings Survey dated April,1987, which might however have related to the year ending April,1986. Each year the Second Plaintiff made a comparison with others seeking the same labour force, in order to fix its national basic starting rates.
Ms Meade's figures showed that the average hourly rate for full time males in hotel and catering and in retail was £3.08 and £3.07 respectively, although women were paid only £2.36 and £2.29. So women generally were paid a little more than they were to start at McDonald's in this country but men were paid significantly more. The average for chefs/cooks was more again. Bar men got paid more than McDonald's starters. Women in bars got paid much the same as McDonald's starters.
An extract from the N.E.S. produced by Mr Morris showed that the average for full-time males in all manual occupations was just over £4 per hour, well in excess of McDonald's starting wage.
An External Survey of Hourly Rates compiled by members of the Second Plaintiff's Human Resources Department and sampling General Sales Assistants ("equivalent to our crew level employee") employed by well-known High Street retailers and supermarkets, which must have been done in 1991 and 1992 because it quoted McDonald's starting rates at those times, showed minimum rates which were about the same as McDonald's starting rates, but lower median and upper quartile and maximum rates were generally well in excess of McDonald's starting rates. Of course this compares all rates, starters and others, elsewhere, with starting rates at McDonald's.
However, a Survey of Catering Wages by "The Catering Review Group" consisting of the Second Plaintiff and eleven competitors and other providers of quick service or relatively informal food, set out their starting wages.
The U.K. average starting rate was £3.18 compared with McDonald's £3 which is a June,1992, figure.
The Outer London and South East Average was £3.40 compared with McDonald's Outer London £3.05 which was the figure for June,1991 and 1992.
The Inner London average was £3.51 compared with McDonald's £3.30 which was the figure for June,1991 and 1992.
The 1986/1987 N.E.S. and the 1991/1992 surveys to which I have just referred, bracket the period of relevant publication of the leaflet.
My conclusion is that in the U.K., McDonald's hourly starting rates were significantly below the average general rates for similar retail and catering work over the period with which I am concerned, and rather below the starting rates for similar employers in catering work. There was a reasonable opportunity for the McDonald's crew member to catch up by reason of regular but small pay increases if, but only if, he or she stayed for at least several months and got a number of good pay reviews.
Retail and catering pay was significantly below average manual rates and I cannot see a full-time male crew member catching up with the average for full time manual workers in all industries, without significant promotion.
Such evidence as I did have on the average rates of McDonald's crew, as opposed to starting rates, did not challenge this conclusion. Mr Nicholson said that figures on average rates were available but he did not have them available.
In May,1996, Mr Preston said that the average hourly rate for all crew was about £3.80 per hour at a time when the Outer London starting rate was about £3.15, but I do not know where his figures came from. The difference between starting rate and average rate tended to be smaller at restaurants which had been opened recently, and many of McDonald's restaurants in this country are relatively new.
Mr Mark Davis, who had risen through various store management and supervisory positions to be an Operations Manager said that the proportion of crew on the starting rate varied. Just before the summer months, when a lot of staff would have been hired the proportion would be the highest, but one third would be the absolute maximum.
Mr Preston said that the Second Plaintiff offered prospects of promotion, with increased earnings, which other employers did not give, but I was unconvinced by this. I had no evidence about promotion prospects in comparable work and it was clear that a large proportion of McDonald's crew were not interested in promotion. Indeed this point helps the Plaintiffs when one comes to the criticism of promotion prospects made by the leaflet.
Various Crew Payroll Summaries which were produced on other issues gave me a keyhole view of what people took home. For instance a Crew Payroll Summary for the Shirley restaurant in February,1992, suggests that a typical crew member working about 39 hours a week would take home about £100 pounds a week provided that the hours included a significant number at evening and premium rate.
Ms Steel offered her own comparison by giving evidence which I accept that for the last year of the trial she had worked 12 hours a weekend from about 10 p.m. to 4. a.m. on two nights (she seemed to include travelling home) and took home £64 which is distinctly more than she would be taking home for 12 hours as a crew member at McDonald's at the end of a year. But she was working in a bar in Central London and she volunteered that she was paid more because of the unsocial hours.
Mr Beavers said that starting wages in the U.S. varied from state to state. There were Federal and State minimums. The starting wage was the minimum wage which Mr Beavers put at about $3.35 per hour in the middle of 1994. He said that the McDonald's starting wage was the minimum wage, but McDonald's was not a minimum wage employer. In a few months or less the wage would go up and the average wage of McDonald's restaurants throughout the U.S. was about $1 more than the minimum wage. The vast majority of crew were making about $4.35.
Mr Beavers said that a wage of $3 to $4 an hour was not low pay. It was a fair wage for the work expected.
Mr Stan Stein said that there had always been a Federal minimum wage which referred to large employers only. Some states adopted a higher State minimum for large businesses but had minimum rates which were lower than the Federal minimum for small businesses. He said that McDonald's basic U.S. starting rates were fixed by forty regions rather than by head office in Oakbrook. The regions did their own surveys of competitors for the same labour force to decide what the basic rate should be.
Mr Stein produced a table of the hourly rates of McDonald's own employees in the U.S. up to Swing Manager, which would mean all hourly paid restaurant crew. The figures ran from 1980 to 1993. On the 1st January, 1981, the Federal minimum wage was raised to $3.35 when the McDonald's average was $3.68. Up to March, 1990, the Federal minimum remained at $3.35 while the First Plaintiff's average rose to $4.84. On 1st April, 1990, the Federal minimum rose to $3.80. On the 1st January, 1991, the Federal minimum rose to $4.25. McDonald's average was then about $5.
The table was eventually agreed but there were limits on the help which it gave me. It set out average wages, so some McDonald's crew would be above and same below. It did not set out starting rates for comparison with the Federal minimum. It did show that the First Plaintiff was not a minimum wage employer in the sense of a large proportion of crew being paid the minimum wage.
Mr Stein said that McDonald's rates for hourly paid workers in the U.S. were not low. They were at the "higher end of the competitive scale".
There was not really any other evidence to enable me to compare McDonald's U.S. wages with its competitors' wages or with the wages paid for comparable work in other industries..
The U.S. periodic wage increases, if awarded, were 10c, 15c and 25c until 1992 when the higher two were raised to 20c and 30c. Mr Stein said that about 10% got the highest figure; the bulk got the middle one, and a smaller percentage got the minimum.
Mr Morris used those figures and the table to which I have referred to develop an argument that if a proportion of crew were training squad and swing managers or had enhancements the starter rate must be on or within a few cents of the Federal or State minimum, but Mr Stein disagreed and there was no sound basis upon which I could fault his denials of Mr Morris's suggestion.
The evidence that wage rates at specific U.S. restaurants were low was very sparse and limited to the occasional statement the the witness started at or near the minimum wage.
The Plaintiffs argued that in judging the wages paid by the Plaintiffs, benefits which came with the work should be taken into account. Mr Nicholson said that the Second Plaintiff's total package put them "way at the top of" the High Street league.
The most often mentioned of the benefits was training. Mr Preston said that McDonald's training was highly valued by other employers. It provided elements geared to basic work disciplines such as time-keeping, team work, health and hygiene goals and what he called "objectives setting" and "accomplishment review".
Mr Beavers said that work at McDonald's was a source of training and experience for a number of people, which was highly valued. There was a tug of war between Mr Morris trying to focus on the actual wage and Mr Beavers pushing the value of training. Despite his evidence about the competitive nature of McDonald's pay, Mr Beavers said that a number of industries had a higher starting rate but the work experience at McDonald's was highly valued in the industry and outside the industry.
However, the benefits and value of McDonald's training to which Mr Preston referred seemed to me to relate more to the fact of having held a job at all, which has been no mean achievement for many school leavers in recent years, rather than a particular benefit which McDonald's provided. Indeed Mr Preston said that at interviews for other jobs young people who had worked for McDonald's could say that they had some job experience.
Crew are allowed some free food, but it seemed to me that its value did not significantly alter the value of the hourly wages unlike, for instance people in live-in catering work who have a modest hourly rate but receive valuable board and lodging free.
Crew are given holiday pay which accrues in relation to the hours which they work.
There is a pension fund but this appeared to be for salaried staff only. Life insurance and medical care is available for both salaried and hourly staff.
A certain amount of money is available for books and educational purposes: £50 for anyone taking a recognised business course, and £250 for each restaurant to distribute. This was introduced because of recruitment problems but it applies throughout the country regardless of whether a recruitment problem exists.
Uniforms are provided.
The Plaintiffs contended that in judging whether McDonald's pay was low I should take account of prospects of promotion to more highly paid levels but, as I will say in due course, the statistical chance of significant promotion is very small and I do not see this as a material factor in the vast majority of crew members' pay.
While the Plaintiff's urged me to take account of the benefits of working for McDonald's the Defendants contended that various factors debased the value of crew wages.
There are no guaranteed hours work in any given week at McDonald's. On balance, in my view, the evidence showed that crew tended to get the hours which they wanted although there was evidence of some individual managers using their power to schedule down the hours of crew to whom they had taken a dislike, or even, it was suggested, down and out, in the sense that they were scheduled so few hours or at such inconvenient times that they left. I have no doubt that this happened on occasions, but I am unpersuaded that it was widespread. However, the fact remains that there was, and is, no provision in any crew member's very simple contract of employment that he or she is entitled to a certain number of hours work and therefore a certain amount of pay, each week or fortnight.
Moreover, a crew member cannot even be absolutely sure that he or she will be wanted for the whole of the scheduled shift for which he turns up.
It was clear from the evidence on both sides that if a restaurant turns out to be too quiet for the number of crew present, that is to say there is less custom than scheduled for, crew may be asked if they are prepared to go home early. If they do so they are not paid for the hours which they lose. They are paid only for the hours which they have worked.
The Defendants' case was that in these circumstances the crew member had no choice but to go home, and that if he did not agree, some excuse was thought of, to send him home anyway. The Plaintiffs contended that crew only went home early if they agreed when offered the opportunity to do so. I believe that the suggestion of leaving early probably was put as a request more often than as an order. But, in my judgment, this does not excuse the practice. The reality must be, and must be known by the Second Plaintiff to be, that many crew members, mostly young and more inclined to please than to obstruct their managers, will take the hint and go, losing money which they need as a result. This must be especially so when they know that they have no guaranteed hours for the future and that getting the hours they want depends on the goodwill of management towards them. I see no reason why they should not be asked if they would like to go home early, but in my view they should be paid for the lost hours which they have set aside to work for McDonald's if they do go home.
I will return to the topic of being asked to go home early when I come to work conditions generally, but so far as pay is concerned it means that pay which should be received, in my view, is lost.
There was some evidence that crew had their pay docked without knowing, that is that the manager reduced the recorded hours of work so that the employee was paid less than he should have been. But this was only convincingly shown to have happened in one restaurant to which I will come later. What happened was done because of pressure to keep labour costs down, but I do not consider that it was a foreseeable result of the Second Plaintiff's approach to labour costs, to which I will also come later.
At one time crew were paid for short breaks taken during their shifts, but in the mid-1980s this changed, with a slight, allegedly compensatory rise in hourly rate. I do not consider that this carries much weight one way or the other.
There was a considerable amount of evidence about the extent to which crew members were content or unhappy with their pay. Some of the Defendants' witnesses spoke of dissatisfaction. Some of the Plaintiffs' management witnesses said that there were little or no complaints at all about pay.
The Plaintiffs called a number of employees who were positively happy with their pay. By way of example only, Mr Christopher Cox, a very sensible young witness from the Bath restaurant, who had begun to move up towards salaried management, having started working part-time as a student, said that his pay was competitive, as good or better than that of his friends in similar jobs in the retail trade; but he accepted that a rate of pay could be "competitive" if rates of pay for comparable work were all very low.
Mr Kevin Perrett joined the Second Plaintiff in Bath in October,1987, as a crew member. He became a Breakfast Manager in 1990. He had left a previous employer because the wage was too low for him to live on, but I note that that was a charitable society. When he gave evidence in January,1996, he was working five days a week; 6.30 a.m. to 2.30 p.m. on four days and 6 a.m. to 3 p.m. on Saturdays. This came to 37.25 hours a week. He worked hard. He liked the hours because he could get home early to look after his animals.
Mr Perrett's employee record shows him going up 5p to £2.25 an hour in March,1988. He reached £3 in April,1989, and he must have reached £4 about three years later. His last recorded rise before he gave evidence was to £4.85 in August,1995, but he was earning £4.95 an hour when he gave evidence in January,1996.
Mr Perrett was happy with what he earned, and that was a great credit to his unassuming and ungrasping nature because for those hours, working hard and with some responsibility and total loyalty to his employer, he was taking home, he said, about £280 to £290 per fortnight out of a gross which I work out at about £370. He took four to five weeks holiday a year and worked public holidays for which he was paid time and a half. His accrued holiday pay returned the equivalent of his normal pay for his holiday period.
In Court I calculated that Mr Perrett took home about £7,500 a year including his holiday pay. His gross must have been under £10,000 p.a.
Happily he was able to live at home with his parents, paying "housekeeping" rather than rent.
Mrs Florence Farrer started as a crew member at the restaurant in the Seven Sisters Road in 1975 when she was forty-four and four of her five daughters, as well as her husband, were still living at home. Part of her reason for going to McDonald's was that they offered her 65p per hour whereas a sweet shop and a drapery store offered only 50p and 55p. In 1985 she was made a Floor Hostess. She has always been able to fit her working hours at McDonald's into her home life. The work suited her and she enjoyed it. When she gave evidence in July,1995, she was earning £5.44 per hour having had numerous performance increases on top of an increasing basic rate. She thought that her pay had always been fair for the work she did. Her husband worked, and for all I know he earned a respectable wage or salary, but no doubt her own earnings were a welcome contribution to the family budget.
Of course, Mrs Farrer's hourly rate reflected her long service, as did Mr Perrett's. It was exceptionally long because she started the year after McDonald's started in this country. She spoke of her regular Performance Reviews and rises.
Mr Simon Gibney was a Floor Manager at Colchester. In that position in 1987 he was paid between £2.50 and £2.90 an hour, depending on the time of day, even though his responsibilities involved running the restaurant on some shifts. When he went onto the salaried manager's training programme at the Milton Keynes restaurant he went onto a salary of £6,000 which worked out at £2 per hour for the long hours he worked. When he went on to get work in a pub he was paid a similar amount to his hourly rate as a Floor Manager at McDonald's. Mr Gibney said that he worked long hours at McDonald's because he needed the money and "the only way you could earn a reasonable wage was to do a lot of hours".
I was shown the results of a McDonald's Opinion Survey carried out in June,1994, which showed that of those questioned, who worked internationally and in this country, employed in company as opposed to franchised restaurants, just over half gave favourable answers to questions about their rewards, but they were not actually asked whether they thought their pay was good.
The Plaintiffs said that it was clear that by and large they had no difficulty in recruiting the necessary staff and where difficulties with recruitment did arise, fairly small increases in rates of pay solved the problem. There have been exceptions, but by and large I accept that this was so. They went on to contend that this demonstrated that the wages which they paid were fair, and seen to be fair by those who came to work for them, and that this meant that their pay was not bad.
However, in my view, this ignores the fact that many young people badly need money. Grants from public funds to students in this country are seldom, if ever, enough to provide total support. In the U.S. grants of any amount from public funds for students are very rare. Only a small proportion of students or of young people who have completed their studies, have parents who are both willing and able to support them completely. Every parent knows that in this country there has been a shortage of jobs for decent pay or at all for young people for many years, and particularly for those seeking temporary work or part-time work at restricted times.
For the same reasons I do not think that the fact that one employer's wage rates are competitive with another's providing the same kind of work means that its rates are not "low".
Relatively high levels of unemployment prevailed throughout the period of relevant publication of the leaflet (1987 to 1990) and they have continued to some extent since. Where there is a high level of unemployment one would expect wage rates for relatively menial work to settle at a low level unless there is a statutory minimum wage which is not itself low.
There was evidence which I accept that earnings in the market in which McDonald's operated were generally low.
Mr Philip Pearson, is a research worker and journalist. For many years he was full-time officer with the Transport and General Workers Union (TGWU). Between his work for the TGWU and his present job he worked for the Low Pay Unit. In 1985 he wrote a book called "Twilight Robbery" about trade unions and low paid workers.
In the book Mr Pearson wrote:
Mr Pearson said that all the figures were gross and they were based, of course, on full-time earnings. The figures varied from country to country but the formula was the same. The decency threshold for Britain in 1984 came out at about the same value as the basic state benefit, although Mr Pearson said that by 1985 the Council of Europe formula figure was well above benefit levels which had failed to keep pace with the movement of wages.
Mr Pearson said that the catering industry was a sector which was recognised as being low paid. High proportions of the workforce in the various segments of the catering industry were paid below the decency threshold level. Both in 1983, when Mr Pearson first looked at figures, and in 1995 the classic catering jobs came in the lowest ten male occupations by pay in the New Earnings Survey. The "External Survey of Hourly Rates" produced by Ms Meade was "gold dust in terms of pay intelligence." It showed McDonald's starting rates below the bottom quartile of the rates of pay of a low paid industry. From an operational point of view the data that mattered, comparing like with like, was the Catering Review Group.
I take two further general matters into account in deciding whether McDonald's pay for crew is low.
Firstly, I am entitled to check what I see as the overall effect of the evidence against the general feel which I have for wage levels over the period with which I am concerned arising from almost daily experience over very many years of people in a large panorama of jobs who have last their earning capacity or had it damaged as the result of injury caused by someone else's alleged negligence. The various hourly wage rates paid by the Second Plaintiff to crew, basic or enhanced, feel low to me.
Secondly, I also have a general awareness of the cost of living and in my view in deciding whether McDonald's pay is low it is fair to ask whether one could earn a decent living, or a living at all, working there full-time.
Mr Preston had some difficulty with this question, saying that most McDonald's employees did not need to earn a living there. "The majority of our part-time people and most of our people are, I suppose, under 21, or thereabouts. They are not heads of household. They are part-time employees, in many cases working for the very first time, trying to bridge their education years to employment years; they have a void in their life they are trying to fill and earn some money".
I do not believe that this answers the question in the Second Plaintiff's favour. There will always be people who are willing to work part-time for low pay, because it is important for them to find some work for limited periods, possibly out of normal office, school or class hours, however badly they are paid.
If anything Mr Preston's difficulty with the question confirms the view which I have reached that the Second Plaintiff's rates of pay for restaurant workers over the relevant period were low and have remained so.
The Second Plaintiff's crew starting rate has been low within a lowly paid catering industry. It was at or very close to the statutory minimum when one existed. Although a starter's pay is generally increased at the end of a three week probationary period and there are generally pay increases every few months thereafter, the increases are fairly small and it is clear from the evidence of crew turnover, to which I will come, that only a minority of crew members stay long enough to obtain any considerable overall increase. Even if you stay a long time your earnings will be low unless you move into salaried management and not many crew members do that in fact.
I do not believe that one could earn a decent living, working full-time as a crew member at McDonald's, without a lot of late, extra hours to bolster one's pay.
I have taken the benefits which come with employment by the Second Plaintiff, such as they are, into account. They are at least balanced, in my view, by the lack of guaranteed hours with some risk of earning less than expected or hoped for in any gien week.
Having summarised the main points in relation to pay, the one piece of evidence which influenced me most was that which spelled out Mr Kevin Perrett's earnings as a longstanding crew member rising to Breakfast Manager at Bath. His hourly rates in the earlier years were above the provincial basic rates given by Ms Meade. They still sound "low" to me, but a net wage of £7,500 p.a. as late as the beginning of 1996 for someone who has had successful performance reviews over a number of years and a degree of promotion, must be "low" in anyone's judgment. There was no reason to believe that Mr Perrett's pay was other than typical.
In my judgment the charge contained in the leaflet that the Second Plaintiff pays its workers low wages is justified.
With some hesitation, I have decided that I am not able to find that the charge that the First Plaintiff pays low wages is proved. The evidence does not in my view establish that it does. There was evidence from some U.S. witnesses that they started on a minimum wage or very close to it. Mr Beavers did. But there was also evidence of crew earnings well above the starting rate, and I do not have the material to judge what is or has been "low" in the U.S. I do not have any feel for U.S. wages and living costs as I do of the U.K. However, the Second Plaintiff's crew wages are low in this country because it follows the First Plaintiff's example of paying a market rate in what is, in this country, a low market.
On the basis that the Plaintiffs' wage rates for crew are and have been low which I find to be true of the Second Plaintiff, the Defendants contended that the claim that they are only interested in cheap labour was justified. The Plaintiffs' executives who were called denied this.
There is obviously a commercial need to budget labour costs, but there is also a commercial need for competent crew who can work efficiently and without undue supervision.
In my judgment what governs McDonald's pay is the obvious need to recruit enough crew who are good enough to do the necessary work to an acceptable standard.
The fact that the Second Plaintiff's wage rates are low is not necessarily because it is "only interested in cheap labour" although it is fortunate enough to be able to get it because of the relative shortage of part-time work, particularly, at better rates.
In my judgment there are four particular matters which point to neither Plaintiff being solely interested in cheap labour.
Firstly there are the standardised starting rates which have not necessarily been the legal minimums where they existed, and which prevail across the nation in the U.K. subject to increases in London and where there are recruitment problems, and across each region in the U.S. There is no discretion for a manager to pay less than the standard starter rate even though there is now no statutory minimum in the U.K., and some people might well be prepared to work for less in his area.
Secondly, there is the practice of performance-related, periodic increases, whether or not the employee would be prepared to stay without them.
Thirdly, there is the willingness to take back trained staff at levels above basic rates, whether or not they would come back for less.
Fourthly, both companies are keen to have crew who appear cheerful to please the customer. I will return to this.
All these factors indicate that achieving productivity is ultimately more important than just paying as little as possible, and this accords with sound commercial sense.
The Defendants did suggest that the First Plaintiff treated black crew members less well than white so far as pay was concerned, in one instance. It related to wages paid to crew at Philadelphia inner city restaurants. In 1989 and 1990 the Philadelphia Unemployment Campaign (PUP) which was a gross roots organisation which also acted as a union, initiated a community campaign over wage rates at McDonald's restaurants. In November,1989, it produced a study showing that crew at McDonald's restaurants in the inner city were paid a starting wage of $1 less than crew at restaurants in the suburbs. Yet food prices were the same.
This had radical implications because the Philadelphia suburbs are principally white and the city principally black. The essence of PUPs claim was that McDonald's was exploiting black people in the inner city by paying less than whites. It received much media attention. Black church leaders became involved and they questioned McDonald's about the claims. Many of McDonald's owner operators in the area were black, and their church leaders views were important to them. A pamphlet of the campaign was "The real Ronald McDonald exploits workers", which is the thrust of the Defendants' case in this Court. Indeed the pamphlet bore the same picture of the malevolent face behind the Ronald McDonald mask, which the leaflet bears.
The PUP study covered 33 of approximately 200 McDonald's stores in the Greater Philadelphia area. McDonald's had doubts about its methodology, so it engaged a respected outside consulting organisation (Tower, Perrin, Foster and Crosby) to investigate. TPF&C's research indicated that the average differential between city and suburban starting wage rates for 28 of the 33 McDonald's restaurants included in PUP's survey (figures were not available for the other five) was actually 11 cents (3.99 for the city against 4.10 for the suburbs), and that the median starting wage for both city and suburban restaurants was exactly the same at 4.00 an hour.
Much time was spent in Court investigating the comparative merits of the two studies. The Defendants suggested that TPF&C's figures were taken in June/July,1990, several months after PUP's which were taken in August to October,1989, and that in the meantime McDonald's had altered stating rates to lessen any discrepancy between the suburbs and the inner city. Mr Stein who was involved in the dispute and who spent some time in Philadelphia, was accused of lying when denying this, and of concealing the full report.
I was not ultimately asked to decide whether the TPF&C study was the more accurate. I do not have material to do so. I do not consider that Mr Stein sought to mislead me over the PUP affair. The restaurant operators involved were predominantly if not solely franchised owner operators rather than McOpCo managers. According to Mr Stein the vast majority of them were black although he was unable to verify that a majority of their inner city employees were African Americans.
Even assuming that crew in the inner city restaurants were predominantly black and that crew in the suburbs were predominantly white and that the former were paid less than the latter, I am completely unconvinced that this was because the owner operators, let alone the Corporation which could not tell them whom to employ or what to pay, chose to pay black crew less. In my judgment, if the assumptions which I have made are true, that state of affairs came about because the market rate for fairly menial labour was less in the inner city than outside it. That may have been because there were more, poorer, black people on the labour market in the inner city and more, better off, white people in the suburbs, but it went nowhere towards proving that the First Plaintiff was espacially interested in black crewmembers as cheap labour or in paying black employees less than it might have to pay white. At worst, it was just another case of paying the market rate, which in this instance resulted in evidence of black workers being paid less by owner operators, not the First Plaintiff, than white workers in a nearby but different area, because of local conditions.
I do not know what the First Plaintiff can be expected to do about that when different franchisees, even those within the same general area, each set their own wage rates. It will not happen in the First Plaintiff's own McOpCo stores within the same general area because wage rates are set as standard across each large region of the U.S.
The evidence certainly fell far short of proving that the First Plaintiff targetted black people in order to pay them less.
There was no other evidence that either Plaintiff paid women or black people less than white men. It was clear that many women with home obligations choose to work at McDonald's because of the attraction of scheduled part-time work which they can leave and return to if they wish.
I accept the evidence which I have heard that it is McDonald's policy to reflect the communities in which their restaurant's operate by, among other matters, employing members of ethnic minority communities where they are strong, but that is a well meant objective, albeit designed in part to make the restaurant more attractive to those in the area.
I reject the charge that the Plaintiffs are only interested in cheap labour. They are interested in inexpensive labour, but they are also keen to have people who will work well.
In my judgment, however, it does follow from what I have said that the charge that the Second Plaintiff has helped to depress wages for workers in the catering trade in Britain is justified. Its wages are low and they are low because they can be competitive with the wages of its competitors in the catering trade and still be low. In keeping to the low common denominator the Second Plaintiff makes its contribution to what are depressed wages.
I cannot say the same of the First Plaintiff because I cannot say that its wages are low.
So far as working conditions, other than rates of pay, are concerned the leaflet specifically mentions evening and weekend work, and long shifts in hot, smelly and noisy environments, with minimal chances of promotion.
I see no merit in the complaint of work in the evenings and at the weekends. Indeed McDonald's attracts many recruits because it offers part-time work in the evenings and at the weekends when employees are not otherwise engaged. Mr Morris suggested that full-time students "would have to be pretty desperate for money" to be prepared to work evenings and weekends as well, but whether this is true or not at least McDonald's gives them an opportunity to earn money. There was no evidence that evening and weekend work did any harm, unless it was unduly extended, late at night, which is another matter.
There was no real evidence that the environment in McDonald's restaurants was unduly hot, or cold for that matter, or smelly, save on exceptional occasions when the weather was unduly hot or cold and there were problems with the machinery which should have maintained an appropriate ambient temperature. Such occasions as were spoken to in the evidence were too few to indicate that work at McDonald's is, typically, too hot or too cold. One McDonald's U.K. manager did say that it was hot working under pressure in the kitchen, but that was in a particularly busy store. It was not a matter which defence witnesses made much of. I will come to hot kitchen equipment when I deal with safety in restaurants.
There was evidence which I accept that the working environment in McDonald's restaurants can be noisy, particularly in busy restaurants at busy times when there can be a lot of shouting of orders and encouragement to work faster. However, most crew in McDonald's restaurants are young and there was little or no evidence that a significant proportion of them were disturbed by the noise. In my own experience most young people are not disturbed by noise, indeed it often appears to appeal to them, to the frequent irritation of their elders. They may of course be upset by being shouted at in an aggressive manner by autocratic managers, which is another matter.
The question of long shifts generally, particularly shifts extended without notice, or without any or any adequate breaks, deserves longer consideration, and I will return to that together with other, undesirable consequences which can be caused by not having enough crew on the payroll of a restaurant to staff it adequately at particular times, or by scheduling too few crew in order to keep down labour costs.
So far as the allegation of minimal chances of promotion is concerned, even a relatively unambitious, full-time or part-time crew member has the opportunity to collect stars and advance to the white badge of training squad. So at a fairly basic level there is room for some advancement. Then there is some real opportunity to move up to the top hourly-paid post of Floor Manager or Swing Manager. All Floor Managers come from crew.
Part-time staff can be First and Second Assistant Managers, but not Store Managers, and Ms Lyn Meade said that 80% of part-time salaried staff (who must, therefore, have been First or Second Assistants) come from crew.
But there is clearly little room for crew to move up into and through the salaried management hierarchy.
I accept the evidence of Mr Nicholson that between 1988 and 1990 when there were something like 26,000 hourly paid employees of the Second Plaintiff, there were about 1,600 salaried, management staff in operational work. Although about 50% of those had started as crew members, that meant that there was only room for a relatively small number of crew as salaried managers.
Mr Nicholson said that he was quite sure that the company could accommodate a greater proportion of management from crew "if they wanted to come in", but the number of management positions is obviously limited in relation to the large numbers of ordinary crew.
I also accept the evidence of Mr Beavers that more than 70% the First Plaintiff's salaried management came from crew, although a significant proportion of that 70% had worked at McDonald's while they were students and had then gone into management there after graduation. Better than 50% of store managers started out as crew. Mr Stein put the figures at 70% of Store Managers and 50% of middle and higher operations management.
I have already referred to Mr Stein's report to the Congressional Sub committee relating to 7,000 salaried Restaurant Managers and Assistants to 85,000 hourly paid crew. Mr Beavers said that there was a very limited number of people in management positions and there were a lot of people doing menial work. The compensating factor was that there were employees who were not looking for full-time work or to make a career at McDonald's. In fact this last comment was a considerable understatement, in my view.
I have no reason to doubt Mr Stein's evidence that about 30% of U.S. owner operators started out as crew and that a random but good representative sample of fifty owner operators showed that 94% of their managers started as crew.
The difficulty in judging the allegation of minimal prospects of promotion is in deciding whether the small number of crew-advanced managers, that is small in relation to the number of crew throughout the country at any given time, was and still is due to lack of opportunity in a system which requires a large payroll of crew available for proper scheduling, often for relatively few hours per week, or whether it is due to lack of interest by part-time workers whose main interest is in their studies or domestic responsibilities, since advancement even to Floor Manager requires dedication and involves considerable responsibility, and advancement to salaried management beyond First and Second Assistant involves commitment to a full-time career at McDonald's.
No very clear picture appeared from the developing bath of evidence
There is no doubt that the prospects for keen and able people have been very good. By the time that he gave evidence in the middle of 1995, Mr Stanton was responsible for the operation of nearly 170 restaurants at the age of thirty-three, having started as an hourly paid crew member, albeit a university graduate looking to fill some time, twelve years before.
Ms Lyn Meade had moved up from part-time work as a schoolgirl and student to Floor Manager and then into higher management after graduating from university. She gave examples of others who had done well when they wanted to, directly from crew positions.
So for people of ability and ambition the route upwards is clear.
My conclusion is that McDonald's is a pyramid with a very wide base and initially shallow pitched sides which, however, grow rapidly steeper once people are on the management ladder.
I have concluded that while it would be accurate to say that the statistical chances of significant promotion for crew members are small because of the nature of the wide based pyramid, it is not true to say that the chances of any promotion are minimal. There is a real chance of anyone who is really interested moving to some level of responsibility and most people who work in McDonald's restaurants would not, in my view, think that conditions there were bad because of the very small statistical prospect of significant promotion, because they are not interested in significant promotion in their part-time job.
Although it is not mentioned in the leaflet, it was an important limb of the Defendants' case of allegedly bad working conditions that McDonald's restaurants were often understaffed and that understaffing in the McDonald's system of close scheduling, combined with autocratic management, and the overriding need to serve customers quickly led to unduly hurried and stressful overwork, long hours, unexpected and undue extensions to shifts, particularly at night, with illegal, late working by crew under eighteen, shortened breaks or no breaks at all, sending home early without pay if things are quiet, an increased risk of accidents, and late performance reviews, all without any real means of protest. The Defendants called a number of witnesses who gave evidence to this effect. Working conditions in the restaurants at Colchester, at Bath and near Heathrow were particularly closely examined but witnesses were also called to speak of practices at other restaurants. There was a considerable discovery of documents from Bath and Heathrow: less from Colchester where events complained of were longer ago. The Plaintiffs did not choose the particular restaurants for examination as they chose, for instance, the suppliers whom their experts should investigate. The particular restaurants came into the front line of the case because the Defendants were able to call witnesses who had worked there.
The Defendants contended that the evidence in relation to Colchester, Bath, Heathrow and other restaurants pointed a dire picture which I should take to be typical of McDonald's restaurants generally, not just because the essential system was the same elsewhere but because, they contended, McDonald's understaffed on purpose to save money.
They relied upon the fact that budgets are periodically set for each restaurant stating a target percentage of turn-over to be spent on wages, and they pointed to a Management Training Handbook which stressed the importance of labour costs and of tracking them against performance on a daily and weekly basis. They said that higher management was obsessed with labour targets and that as a result restaurant managers were under great pressure to meet labour percentage targets which were generally in the region of 15% of sales.
The Plaintiff accepted that there were recruitment problems for a time at Colchester and Heathrow and that these brought problems of understaffing with them, but the extent of the adverse effects of understaffing was hotly disputed and it was disputed that understaffing was a common problem in the McDonald's system. They said that understaffing would be counterproductive. Mr Nicholson, speaking of the U.K., said that there was no point in arbitrarily keeping to a figure like 15%. Mr Beavers, speaking of the U.S. said that McDonald's tried to recruit the best people they could.
A number of the Plaintiffs' witnesses gave evidence to the effect that a target percentage of sales for labour costs was easier to meet the more your sales grew, and that sales growth depended upon good service which depended upon good and contented crew and management.
When it was suggested to Mr Atherton who had worked his way up from being graduate Trainee Manager through various management positions to Head of Training of the Second Plaintiff, and who was Area Supervisor of Colchester for a while, that the company was committed to keeping labour costs down as a percentage of sales per store he said that was not the company's objective but "we budget like any business on an annual basis and the labour line is one line. It has to be controlled like every other line. It is part of doing business".
Mr Stein said that in the U.S. labour costs were generally a higher percentage of sales, 17.5 to 18% or maybe a little higher, than they were in the U.K. where restaurants had a higher sales volume and counter prices were possibly higher. It would be "a dumb way of doing business" to set a rigid standard or limit for labour costs at the company's head office in Oakbrook. It was a "bottoms up approach" starting with the restaurant assessing the crew needed to cope with the custom which it anticipated and moving its plan up through the management to Oakbrook which never reduced the budgeted labour percentage. Focusing on labour percentage would be self defeating. Satisfied customers were more beneficial for profit than low labour costs.
I propose to summarise the nature of the evidence and my essential findings in relation to general working conditions at the particular restaurants, because it was the Defendants' case that there was a consistency of allegations which indicated that malpractice was widespread and not just restricted to the restaurants of which evidence was given; the Plaintiffs contended that working conditions in McDonald's restaurants were generally good and that any failures to meet company standards were aberrations.
I make no apology for omitting far more detail than I include.
I will take things broadly in chronological order, but starting with the Colchester evidence.
The principal witnesses called by the Defendants to tell of events at the Colchester restaurant were Mr Simon Gibney, Mr Siamak Alimi, Mr Omid Shafibeik, Mr Ray Coton, Mr Kevin Harrison and Miss Kate Scannell, later Mrs Kate Harrison.
The Plaintiffs' principal witnesses were Mr Mark Davis, Mr Frank Stanton, Mr Neil Skehel and Mr Steven Harney.
The evidence covered the years from 1984 to 1991 which encompass the period of relevant publication of the leaflet between 1987 and 1990. They were the first seven years of the Colchester restaurant's existence.
Mr Davis, Mr Coton and Mr Stanton were most involved in the management and immediate supervision of the restaurant during those years. Mr Harney and Mr Gibney had lesser management positions.
Mr Davis became First Assistant Manager at the restaurant when it opened on 1st June,1984. He became Manager of the restaurant on 1st November,1984, when Mr Coton who had joined the crew ten weeks before became a Trainee Manager. Mr Coton became Second Assistant Manager on 1st March,1985, and First Assistant on 1st April,1986. In the meantime, in February, 1986, Mr Stanton had become Area Supervisor for three East Anglian restaurants including Colchester.
On 1st August,1987, Mr Davis was promoted to Area Supervisor in place of Mr Stanton who was promoted to a position as Senior Supervisor elsewhere. Mr Coton took over as Manager of the Colchester restaurant under Mr Davis's area supervision. He had done all his management training and practical work under Mr Davis's management.
On 4th February,1991, Mr Davis was promoted to a position as Senior Supervisor elsewhere. Mr Neil Skehel took over as Area Supervisor. Mr Coton did not last long as Restaurant Manager after that. He resigned at the end of August,1991.
The Colchester restaurant was the Second Plaintiff's "Store of the Year" in 1987. Mr Stanton was Area Supervisor of the Year in 1987 and he has done well with the company as I have said. Mr Davis became Area Supervisor of the Year in his turn, and he is now an Operations Manager (Senior Supervisor) in Mr Stanton's region.
The Colchester restaurant opened at 7 a.m. and closed at 11 p.m. save on Fridays and Saturdays when it closed at midnight. The two main shifts for full-time staff like Mr Gibney and Mr Alimi were 7 a.m. to 3 or 4 p.m. and 4 p.m. to 11pm.
Mr Simon Gibney now has his own, small, transport business which he runs with a partner in Colchester. He was an impressive witness. Pleasant, straightforward, accepting some things under cross-examination and explaining others.
He went to work at the Colchester restaurant as a sixteen year old when it opened in June,1984. Mr Gibney was a successful crew member at Colchester and he became a Floor Manager just after his eighteenth birthday in November,1985. He often ran the whole restaurant as a Shift Running Floor Manager. He could not advance to salaried management because he was under twenty-one but he was entrusted with the duties of a Second Assistant Manager including crew scheduling and weekly paperwork. In fact he was promoted to the salaried management training programme on his twentieth birthday, a year earlier than normal. Although this is not unheard of for someone who has worked for the company from the age of sixteen, it is an indication of the high regard in which he was held. He left Colchester in November,1987, when he became twenty, to start his management trainee programme in the Milton Keynes restaurant, but he said that he was badly treated there, and I believe that he did not like being away from Colchester, and he left McDonald's after a month, on Christmas Eve of 1987.
The essence of Mr Gibney's account of matters was that everything had a target, whether it was the amount of milkshakes per gallon of shake mix or the number of cola drinks per litre of syrup or the amount of ketchup per burger. The Colchester store was set specific targets by Mr Stanton whom Mr Gibney described as a highly ambitious man who lived for McDonald's. As a result drinks syrups, ketchup, shake mix and mustard were watered down and lettuce and cheese were pared. Fry cartons were squeezed when filled so that they held less. Mr Gibney said that Mr Stanton directed this when he was Area Supervisor and Mr Davis put it in hand just before he became Store Manager. This was hotly disputed by Mr Stanton and Mr Davis and counsel for the Plaintiffs, who suggested that it was impracticable or unlikely for various reasons. I believe Mr Gibney's evidence that it happened. He gave positive evidence and I think that he was on honest witness when it came to saying whether things had happened at all although the frequency or extent of some matters may have grown in his memory over the years before he gave evidence in October, 1995, and he may have drawn inferences which were justified. In my judgment Mr Davis must have known and organised what was going on, but the involvement of Mr Stanton depended on assumption by Mr Gibney, and I am not prepared to find that he directed or knew of these malpractices, on assumption alone.
The relevance of what happened in relation to food and drink is to show the pressure to succeed in financial terms, which ordinarily honest people like Mr Davis felt. That pressure paid off as the awards and Mr Stanton's and Mr Davis' subsequent success, showed. That pressure to succeed obviously had a potential for affecting conditions of employment.
Mr Gibney said that a 15% target set for labour costs as a proportion of takings was the key to how many people were scheduled to work at certain times on certain days throughout the week and that management anxiety to keep labour costs down meant that if takings at a particular time were less than forecast crew would be asked if they wanted to go home. If too few people obliged, reasons would be found to send people home, for instance not using the correct procedures on grills or wearing hair too long. People arriving for shifts would be sent home for having a creased uniform or being unshaven. On the other hand, if the restaurant was busier than forecast people worked whatever their appearance and those already at work would be pressured into staying on until the store went quiet by a threat of a cut in hours for the following week or by being told that their area needed cleaning.
The restaurant manager would look at the labour percentage regularly during the week and on Sunday, if he realised that it was going to be too high for the week, he would run very short-staffed at times to try to bring it down.
Until January,1990, there were statutory restrictions on how late young people over school-leaving age but under eighteen could work. Young women were not allowed to work after 10 p.m. and young men were not allowed to work after 11 p.m. In January,1990, the statutory deadlines were repealed, but the Second Plaintiff issued guidelines that no young person should work past midnight and consideration should be given to travel arrangements home. The statutory requirement for a minimum eleven hour interval between shifts worked by young persons was removed, but the Second Plaintiff's guidelines said that it should continue to apply.
Yet Mr Gibney said that when he was still under eighteen he regularly worked past midnight. He would be scheduled to finish at midnight but would be made to stay until 1 or 2 a.m., perhaps being told that he had not cleaned his area properly, if the restaurant was short of staff to clean up. He was told to clock out at midnight and he was given a bonus to pay him for time worked thereafter. A note of the bonus was written on his clock card. He said that "under 18 year old males working past midnight was the norm". He worked in other restaurants from time to time as a Floor Manager to help out and he doubted that there was an under 18 year old, male full-timer who never worked past midnight. If you were asked to stay on but said "no", you were threatened with a cut of hours the next week or given nasty jobs like cleaning the toilets or scrubbing floors.
Mr Gibney said that women under eighteen did not work after 10 p.m. at Colchester because shifts scheduled to end at 10 p.m. were not useful to the shift system which I have referred to and scheduling them to work after 10 p.m. would reveal the illegality.
Mr Gibney said that he worked after midnight on many occasions. He would say about fifty times.
The period of time spent cleaning up after the restaurant closed at night was called a "close". Mr Gibney said that if you were scheduled for a close you would expect it to take about an hour and a half. If the store was to have a visit from anyone above the level of Area Supervisor there was an all night close when those scheduled for the close would have to work all night to make the restaurant look its best. There was no choice, even if you were on a long noon to close shift. This could mean working until 7 a.m. and being back on duty five hours later. If you complained you were threatened with a cut in hours.
Mr Gibney said that on several occasions he worked a shift of eighteen hours from noon to 7 a.m. (presumably less one hour's break). When pressed, he put the number of occasions at about a dozen in his three and a half years at McDonald's. There were more all night closes than that but he was not always on duty. On one occasion he worked a 4 p.m. to close shift. He was then expected to work until 7 a.m. all night cleaning the store. The restaurant was then short of staff so he was asked or pressured into staying on until after the lunch period, so that shift lasted twenty-three hours without leaving the restaurant. He was around eighteen; it would have been the middle of his time at McDonald's.
Mr Gibney said that during busy times of the year full-time workers could do as much as 60 to 70 hours a week, but no hours were guaranteed, so the same worker might do as little as 25 hours. He himself sometimes worked as much as 60 or 70 hours a week because, as I have said when dealing with wage rates, he needed the money and he had to do a lot of hours to earn a reasonable wage.
School holidays were particularly busy because school children came into the city every day. The restaurant had a small increase in staff for holidays but it was difficult to get staff in the mid to late 1980s.
Mr Gibney said that Siamak Alimi would have worked 60 to 70 hours a week.
Mr Gibney said that after holiday periods, particularly the summer holiday, the Colchester restaurant would go comparatively quiet and people would be failed on the Performance Reviews at the end of their three weeks probation and not kept on so that the payroll was reduced at the end of the school holiday, when they had been considered acceptable when the restaurant was busy. Their probation could have been extended. The probation of a lot of probationers, more than three or four, coincided with the end of the school holidays.
Mr Gibney said that inexperienced staff were left on potentially dangerous equipment to keep the labour rate down. He said that burns were commonplace and that occasionally they were serious enough to warrant hospital attention. He gave the example of a Ms Vicky Golding who slipped while mopping the kitchen floor and put both forearms on a hot grill, burning them badly. She lost a foreign holiday as a result. She discussed compensation with the restaurant manager who was by then Mr Coton who gave her some form of bonus as "hush money".
One of the Defendants' criticism of working conditions at McDonald's was the importance of what the Plaintiffs call "hustle". Mr Gibney said that to him "hustle" meant fast work. If you told someone to hustle you were telling them to work faster. The speed at which people worked made it inevitable that there would be "small accidents, burns or cuts or whatever, or people sliding and falling over ...".
Mr Gibney said that repair of equipment was delayed so that equipment costs did not go over the set percentage.
There was an Accident Book in the Colchester restaurant but it was rarely used. People considered a small cut or burn to be part of the job and they did not report it. Mr Gibney suffered many burns and went to hospital with burns on two occasions. He had to have stitches in a cut finger on one occasion. He did put his own injuries in the book if they were serious, and he made sure that any serious injuries went in the book if he was working.
Mr Gibney said that he went on a Floor Manager's course at the Second Plaintiff's Hamburger University which involved videos and speeches congratulating the company. What little learning was done was "basically just reading the Operations Manual and expecting everything to be done that way, which, in reality, it was not that way .... Because to run the store the way the Operations Manual suggests, you need far more staff on. This would be the case if you had an important visitor; the store would be staffed at a level where everything could be carried out properly ...".
Mr Gibney said that his overall impression of his time at McDonald's was the pace of work there. He remembered that when he started work at a pub after leaving McDonald's other people there were amused because he could not sit down. He had to clean an ashtray or wipe the bar when there was no one to serve.
Mr Gibney did accept that the budgets or targets which the restaurant was set were quite different from an order on high which should not be exceeded.
When it was suggested to Mr Gibney that he did not feel very well disposed towards McDonald's, he said that he did not have any particular opinion. He still ate there.
Mr Siamak Alimi worked at the Colchester restaurant from October,1985, when he was already thirty, until the end of August,1987. So Mr Davis was the Restaurant Manager for all but the last month of his time there. Mr Coton was Manager for the last month. Mr Stanton was Area Supervisor for all but the first two months and the last month. Mr Alimi was a member of the Training Squad by the time he left. He has gone into Information Technology since.
Mr Alimi said that he was told by managers that the labour cost at Colchester was set as low as 12% of sales but he was also told that it was 17%. The records of staffing percentages appeared on a chart on a wall where the managers worked. Managers got a print out of labour costs daily and planned their manning levels daily. There was a lot of pressure and they were happy or unhappy day by day depending on the relationship of staff costs to sales.
He recalled Mr Davis telling him to squeeze the fry boxes when filling them, in order to increase the yield.
Mr Alimi said that under eighteen men worked after midnight and women after 10 p.m. They were asked if they wanted to work past those hours and if they agreed they worked the same hours as everyone else. Most refused and no pressure was put on them.
Mr Alimi gave the same account as Mr Gibney of clocking out at the legal time, marking of the clock card with a bonus and payment of the "bonus". He named Mr Gibney and Mr Harney as under eighteens who were required to work late. They were Floor Managers, and he named them and another man as managers whom he had seen writing a bonus on a clock card. Also the clock cards were hung on the wall to see.
He said that it would be impossible for the Restaurant Manager or a Floor Manager to work under eighteens past 10 p.m. or midnight and to pay them bonuses without the Area Supervisor knowing.
Mr Alimi said that he generally worked the "close" shifts and he regularly did not finish until 3 or 4 a.m. or even 6 or 7 a.m. He repeatedly complained to management because he was married and his wife would be on her own all night without knowing where he was because they were not on the telephone. He asked management for advance notice of late closes but he was not given it. He led others to protest. Their campaign was not against late closes but lack of notice.
The reason for the closes at 3 or 4 a.m. was that ordinary late night closes were protracted to make things spic and span. The closes to 6 or 7 a.m. were all night closes to prepare for visits by higher management.
He said that late closes occurred three or four times a week at certain times of the year. There were threats to cut hours if people did not stay on. Mr Gibney was in charge of schedules and he cut one man's hours because he would not stay on.
With the help of his diary Mr Alimi found three all night closes within four weeks on 7th April, 19th April and 3rd May, 1986. From Monday 5th May, 1986, he worked every day for eight days. There were no other all night closes in the part of the diary which was copied and it did not reveal closes, other than all night closes, extending as late as 3 a.m. or 4 a.m., although Mr Alimi insisted that they occurred.
Mr Alimi said that he knew of employees working as many as twenty-six hours in a row which they were scheduled to work a late shift one day, it was extended until 6 a.m. or 7 a.m., and they were scheduled to return to duty at that time.
He gave a seventeen year old girl, Tracy Millane, as an example of someone who worked 26 hours because she had left home and desperately needed the money and management know this. Mr Alimi worked a late shift. She had started before him, at midday. When he came back for his next late shift she was still working and she continued to work the next shift after he came in. I suppose she could have gone off while Mr Alimi was away, and come back before him, but I do not doubt his account of what he saw and it must have involved her working very long hours without much of a break between shifts, on any interpretation of events.
Mr Alimi said that he occasionally worked sixteen hour shifts from 12 noon one day until 4 a.m. the next. He said that when break entitlements and free food allowances were calculated, the calculations were based on scheduled hours rather than hours worked so that crew who worked beyond their scheduled shifts missed out. He was often sent on his break at 5 p.m. when working a 4 p.m. to midnight shift. All crew breaks were over by 7 p.m. on the evening shift. As a "training squad" he was instructed to send people on their breaks before it got busy.
He said that if people refused to work extra hours on a late shift, their scheduled hours were cut so that they had to leave for want of money. Crew were told that if they refused to work on, their hours would be cut or that scheduling preference would be given to others. They were told that their promotion prospects would suffer.
Mr Alimi's account of the number of late closes appeared to be geared to the visits of the Area Supervisor as well as to visits of higher management and his evidence was challenged on the basis that all night closes for an Area Supervisor who dropped in frequently without notice were impossible . He said that Mr Stanton expected things to be spruced up just for him. Later on Mr Stanton visited more often and crew did not finish as late. But he was not suggesting that all night closes took place when the Area Supervisor was expected to visit. All night closes took place to prepare for visits by higher management.
Mr Alimi said that no one was allowed to take a taxi, paid for the McDonald's, after working a late shift. Women were left to walk home at 3 a.m. and employees often paid for taxis themselves. The claim that there was a taxi account for staff who worked on the close was news to Mr Alimi. He did not know of anyone whose taxi fare was paid by the company. There was no mention of taxis at all. He did later say that a taxi was booked to take him to and from hospital when he had an accident.
Mr Alimi said that on average he worked six days a week completing anywhere between 32 and 60 hours a week.
He produced payslips which showed him working 88.84 hours in the two weeks to 8th February,1986, 98.94 hours to 22nd February,1986, 82.57 hours to 22nd March,1986, and 93.76 hours to 5th April,1986. Then he worked 86.96 hours for the two weeks to 3rd May,1986, and 92.36 hours to 17th May,1986. Then he worked 94.02 hours for the two weeks to 18th October,1986, and 87.24 hours to 7th March,1987.
The importance of those hours, where he must have worked more than 39 hours in one if not both weeks, and of other fortnights where he worked 79 hours or close to that and may, therefore have worked more that 39 hours in one week was, firstly, to show that some people did work more that the company's expressed maximum of 39 hours a week and, secondly, to show that if, like Mr Alimi, crew worked long hours and their basic wage was near the minimum they could end up with less than the Wages Council minimum with its entitlement to overtime rates. However, the payslips do cast doubt on Mr Alimi working as much as 60 hours a week in my view. It is true that in a 90 plus hour fortnight he could in theory work, for instance sixty hours one week and thirty or so in the other but it looks unlikely to me, especially where one high fortnight follows another. It seems unlikely to me that Mr Alimi was working twice as much one week as the next and then back again. He said that he chose the payslips at random but I think that he must have included the high ones in an attempt to make his point about high hours. I reject Mr Morris's suggestion that the Second Plaintiff picked two week pay periods in order to cover up high individual weeks. The two week pay periods are no doubt administratively more convenient than weekly ones without keeping hourly paid crew out of their money for too long.
Mr Alimi said that people were sent home as much as two hours or four hours early if the restaurant went unexpectedly quiet. Most people were quite happy to be sent home early but regretted it when pay day came. If it became too regular people refused to go. Some who refused were sent home early; or individuals were picked on for having a creased uniform or needing a haircut when they were allowed to stay when the restaurant was busy. He overheard managers telling other managers to pick on crew members to be sent home.
Mr Alimi said that the hose on the machine which filtered the cooking fat (shortening) while it was still hot was faulty. Management knew but did nothing. One night Mr Alimi was instructed by Mr Harney to filter the hot shortening without the protective visor which was lost. The defective hose blew up and hot shortening splashed into his face and eyes. He was sent to hospital for a check up.
The bun toaster's hot top plate was loose and fell on the operator. He was burned by it.
He remembered Ms Golding's accident.
I was not made clear to crew members that they should put accidents in the book.
Mr Coton, when Assistant manager, put Mr Alimi in charge of routine maintenance including basic electrical jobs, with Mr Davis's knowledge, without training.
Mr Alimi said that "hustle" meant move faster and you could not move faster without sliding because you were already going at maximum speed anyway. Mr Stanton would frequently come in, especially on busy shifts, and the first thing he would say to the crew was: "Let's see some hustle. Let's get moving". That has the ring of truth.
Mr Alimi said that the organisation of Rap Sessions, when crew could in theory raise complaints about their treatment, was haphazard, so few people knew about them. Any McDonald's manager who ran them, whether from the immediate area or not, was regarded by the crew as a "company man" and was not trusted. He might relay information on those who had voiced criticisms with the result that they would get a hard time. So Rap Sessions were not generally taken seriously by the crew. Mr Stanton chaired a Rap Session at Colchester although he was its Area Supervisor.
When Mr Alimi made his first statement in March,1988, for other litigation involving McDonald's, he said that Mr Gibney would not be prepared to give evidence against McDonald's as he was very committed to his career at McDonald's.
Mr Raymond Coton spent six years in the army before spending seven with McDonald's in Colchester between August,1984, and August,1991. I have already said that he was Restaurant Manager from August,1987, under Mr Davis who had trained him up and who became his Area Supervisor. He found the pressure during the last year very hard, he said, and he applied for another job in January or February,1991, which was when Mr Davis was promoted and Mr Skehel came in. He had been hoping to be made Area Supervisor himself.
There was a lot of argument about whether malpractices which Mr Coton admitted to as manager had been taught him by Mr Davis and whether Mr Skehel picked on Mr Coton when he came, causing Mr Coton to leave. Having heard all the evidence I came to the firm conclusion that Mr Coton was a well meaning but not particularly effective manager. He was brought up by Mr Davis under company pressure to train up managers and he just coped, so far as results were concerned, by cutting corners when Mr Davis was his Area Supervisor both chivvying him and looking after him and knowing some, at least, of what was happening. But when Mr Skehel came and wanted the same results without cutting corners he could not cope. He probably knew what was going to happen as soon as he knew that Mr Davis was going to leave.
The essence of Mr Coton's evidence was as follows:
There was a lot of pressure on management to keep labour costs down. This applied on a store by store basis, and also within the region as a whole. The store was expected to keep within its set budget. When senior officials visited, the store management would have to increase staffing levels drastically to around 20% of sales, for example. They would then have to decrease labour costs for the rest of the week down to 10%, for example, in order to conform to the usual weekly budget.
There was also pressure to keep costs down which involved giving smaller portions of some items, for example lettuce, and watering down others. He said that he believed that the order to do these things came from Mr Stanton through Mr Davis. He said that it originated from Mr Stanton at a manager's meeting but I was not confident that Mr Coton was remembering such a meeting rather than assuming that it must have taken place. He did not think it was wrong. He just saw it as a way of improving profitability.
However, the labour percentage was the biggest obsession which the company had. It was monitored every day, week and month. Mr Davis and Mr Stanton when they were Area Supervisors rang every day about it. If he did not meet his target on one day he was told in no uncertain terms to sort it out.
The Area Supervisors were under pressure from above. Mr Coton gave me details which gave this the ring of truth.
The pressure to keep labour costs down resulted in unacceptable practices.
Men under eighteen worked beyond their legal time at night, but were clocked off at the correct time and given a "bonus" instead. At least two, three or four times a week someone who was under eighteen would be asked to stay on after midnight.
The schedule could be used in a discriminatory way to favour some crew at the expense of others.
It was an unwritten rule that those who were interested in promotion would have to work very long hours to impress. It was not unusual for Mr Coton to work seventy hours a week.
People from head office visited about once every month or six weeks. Such visits meant an all night close to 4 or 6am. An average close would be at about 1 or 1.30am.
Most seriously, people had their clock cards altered and hours docked off their time. He said that he was taught to do this by Mr Davis. It was done by Mr Davis when he was manager and by Mr Coton when he was manager. It was happening when the restaurant was made Store of the Year. The watering down would also have been happening then. It was extensive, by Mr Coton's account.
Mr Coton said that he did not know whether altering clock cards was just something which was done at Colchester branch level. He got the impression that other people knew, but he did not know for sure.
He remembered Ms Golding being injured. She was not paid "hush money". She was about to go on holiday so she was given something to compensate her for her lost time.
Mr Coton said that many of the company procedures were fine in theory or on paper, but in practice it was impossible to comply at restaurant level due to the pressure from above. "There are two types of McDonald's. There is the Manual, what happens at training, and what happens on the Full Field Audits, and there is what happens when those things are not going on. You know when a Full Field is going to happen; if not you are notified. You normally find out the day before it is going to happen. You are ready for it. You have your people on. So it tends to be a time when you perform at your best because you know they are happening. Then what actually happens when they are not there, it is slightly different. There are two or I felt there were definitely two distinct lines. There was the book, what happened when people came down and visited you, and how the stores were run when you were left on your own."
At Colchester there was always a problem getting enough crew members, according to Mr Coton. But the messages were conflicting. He was told that more crew were needed, but than he was told that labour costs were too high.
I was shown various Performance Reviews. The whole tenor of the Performance Reviews of Mr Coton by Mr Davis was pressure to do better. "Chase the tenths of a %". Mr Davis's Performance Reviews showed that he was put under pressure by his first Area Supervisor when he first became Restaurant Manager. No matter how well they did, they were expected to do better.
Mr Omid Shafibeik worked at the Colchester restaurant for a short period in 1984 and a ten month period in 1985 to 1986 when Mr Davis was the Restaurant Manager. The management knew that he was an Iranian with no family in this country, who could only work at weekends but who was very dependant on his money from McDonald's.
He gave evidence of long shifts, working all night, being made to do dirty jobs or threatened with cuts in his hours if he refused to stay on past the end of his shift. A taxi home was never provided. Girls under eighteen worked after 10pm and boys under eighteen worked after midnight. He remembered seeing Ms Golding's burns. Others suffered serious burns.
Mr Kevin Harrison worked for McDonald's between September,1986, and September,1987. He spent three month at Colchester as a Second Assistant Manager before transferring to Ipswich.
He said that labour costs were an obsession. He thought 10% was acceptable when making his statement but he put it at 12 to 14% in the witness box.
It was quite common for managers to instruct people to go home if things were slack.
He thought there were late night closes; twice in three months at Colchester and more at Colchester than Ipswich.
Mrs Catherine Harrison spoke of pressure to finish breaks early, at Colchester and all the other restaurants at which she had worked.
She was aware of people working long shifts at Colchester and she said that she sometimes worked from 5pm to 4am when she was at the Romford restaurant.
She recalled late closes about every couple of months when "bigwigs" visited and there was panic about the visits.
She said that burns and cuts were not taken seriously. "Hustle" meant "move quickly".
She did say that she recalled times at Colchester when Mr Davis or his predecessor was the Restaurant Manager and her paid hours were short. She kept a record of her hours. She queried it and the pay was added to her next payslip. She kept a record of her hours and I assume that the managers must have come to know that when she made her first query.
Rap Sessions and Crew Meetings improved matters of complaint for a week or two, but not in the long run.
Both Mr Davis and Mr Stanton denied any knowledge of or participation in watering down drinks etc or paring food portions or docking hours.
Mr Harney who was a crew member, a Floor Manager, a Trainee Manager, and Second and First Assistant Manager at Colchester between July,1984, and May,1989, was sure that no docking took place under Mr Davis because when he was an hourly paid worker (until February,1988,) he generally checked his hours and he only discovered a discrepancy once. That was between August,1987, and February,1988, when Mr Coton was the restaurant manager. He worked long hours by choice as a Floor Manager. He knew the crew well. No one ever spoke of their hours being docked.
Mr Skehel said that he only discovered pay docking when he was told in May or June,1991. Mr Tim Taylor and Mr John Atherton who were higher up the management tree said that they knew nothing of pay docking until it was revealed that Mr Coton had been doing it.
All the Second Plaintiff's higher management witnesses said that McDonald's was primarily concerned with sales and looking after the customers rather than cost cutting. Targets were not arbitrarily imposed. It is clear from Mr Davis's Performance Reviews of Mr Coton, when Mr Davis was Area Supervisor and Mr Coton was Restaurant Manager, that Mr Davis was encouraging Mr Coton to get numbers of crew members up and to keep them up. "Under-accruing in labour is a false economy".
Mr Stanton denied the practices of working under eighteens after legal hours, of sending people home when the restaurant was quiet and of punishing them with dirty jobs or cutting hours to force them to work longer than their scheduled hours. All-night closes were only worked once a quarter maybe, and no one was forced to do them. Mr Alimi's hours, as shown on his payslips, were unusual. Scheduling was designed to avoid shortened or awkward breaks. Taxis were available for closes. Safety was not compromised. "Hustle" meant "moving with purpose and despatch", not running or sliding about, and theory was put into practice at Colchester. He may have stood in to run one Rap Session if the visiting supervisor did not attend and he wanted it to take place anyway.
Mr Davis's evidence was to much the same effect. He explained a system of paying for taxis out of the petty cash. He said that a substantial number of crew lived within walking distance of the restaurant and there were adequate buses until 10 or 11pm. If a woman of nineteen or twenty stayed on until 1am to do a close she would be sent home by taxi paid out of petty cash, but taxis were only paid for after midnight.
Mr Davis' own Performance Reviews show that he was reprimanded by his first Area Supervisor (before Mr Stanton) for being undercrewed and told to instigate a comprehensive crew hiring programme as early as September,1985. In October,1986, Mr Stanton told him that the restaurant still suffered from too many crew working more than 35 hours a week. In September,1987, Mr Taylor told him to get more crew on board at Colchester.
Mr Davis said that double or back to back shifts happened very infrequently. There were crew members who asked for double shifts. He could not accept that when the restaurant was busy people needed a full break, not less.
Mr Morris, remembering Pangloss, suggested to Mr Davis: "That is your position, is it not, that is the Company's position? Everything is fine in the best of all possible worlds; everyone is happy at McDonald's, working at McDonald's?"
Mr Davis replied: "I do not think that McDonald's has ever professed to be a perfect company, and I have never said in the course of my evidence that everything at Colchester was extremely rosy. However, predominantly I remember it was most of the crew members there were happy, the management were happy and generally the store well run.".
Mr Harney said that he went on to manage the Clacton restaurant under Mr Davis's supervision between June,1989, and February,1991, and that Mr Davis never put pressure on him or suggested using unacceptable methods to meet costs targets. The targets were realistic and set by Mr Davis and the company after careful discussion with him as Restaurant Manager.
I have reached firm conclusions about the essentials of alleged employment practices at the Second Plaintiff's Colchester restaurant between 1984 and 1991. They are based upon my judgment that Mr Gibney was an essentially honest witness; upon the fact that some of his allegations were supported not just by the evidence of other Colchester witnesses but by the evidence of similar events and practices in some other restaurants, to which I have yet to come; and upon what I see as the inherent likelihood of a system run at local level by relatively young and inexperienced managers and dependent, for its much sought after profits, on fast service by a pre-scheduled number of predominately young employees in a real world where such scheduling can be awry for a variety of reasons.
Although I have yet to come to the evidence of other restaurants, it is convenient to give my essential findings on Colchester now.
The Area Supervisors were very keen to impress by the performance of their restaurants including Colchester and they put a lot of pressure on the Restaurant Managers to squeeze the most out of the restaurant. There may be little, if anything. wrong with this in normal circumstances, but at Colchester there was a problem with the recruitment of sufficient staff for an adequate payroll and there was an obsession with the target set for labour costs as a percentage of takings.
Those matters together must have led to hard and hurried work during parts of some shifts. They led to some crew working relatively long hours in some weeks, although the weekly maximum was probably around 45 to 50 hours, rather than 60 or 70, without what I would see as appropriate recognition by overtime rates.
They led to crew being kept on at the end of their shifts without prior notice, from time to time.
They led to ordinary "closes" being extended longer than they should have been at night although I believe that 3 to 4am was unusual for an ordinary close and that 1 or 1.30am was more usual. They led to all night close, for which I can see no good reason, sometimes without proper notice, but a crew member would normally only be expected to do those three or four times a year.
They led to young men under the age of eighteen frequently being kept on after midnight, with clocking out and "bonuses" to cover up. This was probably the result of a payroll which was short of the required numbers and, particularly, short of older crew members, rather than the result of pressure to cut costs, because no one mentioned the factor of lower wage rates for under 18s. I am not satisfied that women under eighteen worked after 10pm.
I am not satisfied that taxis were never paid for, to take crew home late at night. I think their use was probably rare, but crew working late were generally young men with in walking distance of home.
They led to occasional very long shifts being worked by young people. Again this must have been the result of a payroll which was short of the required numbers, and predominantly young.
They led to one Restaurant Manager, Mr Coton, docking the pay of some crew, that is reducing the hours for which they should have been paid. This must have been a result of the pressure which he felt to meet targets since he was an essentially honest man. I am not satisfied that anyone else knew that he was doing this.
Although Mr Davis must have known about the watering down which I find took place when he was manager, I am not, persuaded that he docked crew's hours and taught Mr Coton how to do it. That is a serious allegation and there is only Mr Coton's evidence to support it. Mr Coton's evidence was that it was widespread. But if it was widespread from early on, I am surprised that it was not tumbled to by the crew. Mrs Harrison had experiences which must, I think, have been accidental because her shortfalls happened again after management must have known that she kept a record of the hours which she worked. Mr Harney discovered it once under Mr Coton. There was no other complaint until Tracy Millane realised that her pay had been docked in September to November,1990, late in Mr Coton's managership. I find it difficult to accept that it could have been going on while Mr Gibney was there during the whole of Mr Davis's managership without Mr Gibney realising. Mr Gibney was very on the ball. I do not believe that it did happen while Mr Gibney was there which means that it must have started after November,1987.
I am not satisfied that Mr Stanton knew of the watering down, let alone the docking of wages, but even if I am wrong about that there is no evidence that anyone above Area Supervisor knew of watering down, or of docking wages. Mr Coton accepted that.
There was a keenness on "hustle" and as I will say later I think that to McDonald's crew "hustle" means "get a move on" whatever fancy definition McDonald's executives give it. But I do not believe that it led to any real danger. The only serious, or potentially serious, accidents were those to Ms Golding and Mr Alimi and neither was clearly related to hustle or doing a job too quickly. Some of the smaller burns may have been related to hustle but I do not consider that their advent was sufficient to brand the work dangerous.
Turning to the evidence of other restaurants, Mr Ian Whittle worked at the Second Plaintiff's restaurant in Sutton between 1983 and 1986, part-time for two and a half years while he was studying, but then full-time for the last six months. He became a member of the training squad, sometimes being responsible for an area of the restaurant.
So far as employment practices were concerned, he said that individual crew members were encouraged to be management sneaks who were rewarded with favours, promotion and pay rises.
Managers would often allow staff to be abused rather than lose a customer, for instance if drunken, rude customers came in after the pubs closed they would insist that they should be served.
Whenever a spot check was to be made by an Area Manager there was a tip-off so that the restaurant could "go into overdrive" to ensure that it was up to scratch. More staff would be scheduled.
Staffing levels were inadequate even though this led to rushed work and food being undercooked or falling on the floor. It was still served. Staffing levels were always kept to the absolute minimum to keep costs down. Managers competed to see who could run the shift with the lowest number of crew yet make the most money. Breaks were postponed during busy shifts, until the rush was over.
Crew were asked to go home if the restaurant was quiet, losing their pay for the remainder of the shift. If there were no volunteers, crew would be sent home for having a creased uniform, or being unshaven or cheeky when this would not have mattered had the store been busy.
If the restaurant was busy crew would be asked to work double shifts. People were pressurised into staying on by being reminded that their reviews were coming up. "Don't spoil it now".
Discipline varied with the result that crew were disciplined or sacked for breaking minor rules which had not previously been enforced.
Rap Sessions were very intimidating and the most outspoken crew members were picked on, in order to warn others not to be critical. When Mr Whittle made minor complaints he was ridiculed and it was suggested that he was trying to talk himself out of a job.
Mr Whittle was twenty-one or twenty-two when he left. His conclusion was that: "I think McDonald's is the worst place I have ever worked. It is the hardest place I have ever worked with the least gratitude; the conditions were intolerable, I have worked as a hotel porter, I have worked as a waiter and I have been abused by people working as a waiter but nothing like having to work in McDonald's ...... It is not exaggerating to say that I thought that there were times when working at McDonald's was like being in hell, because you had managers screaming at you, there were massive queues of customers waiting for food getting impatient, and you felt that pressure as an individual, and the Manager made sure you felt that pressure because it was you that was holding everything back". But it was not Dante's Inferno; crew had some quite good times.
He thought that the McDonald's system encouraged managers to be petty because they were in a position of unchallenged authority. They wanted people to be demoralised.
Mr Whittle gave some hearsay evidence about a crew member called Adam who was said to have slipped on a greasy floor and burned his arm badly. The manager told Mr Whittle that Adam accepted that he was responsible for keeping the floor clean but that he had not done so.
I found it difficult to know what weight to attach to Mr Whittle's evidence. He made a reasonable impression as a witness, but I find it difficult to understand why he should have stayed on at the Sutton restaurant full-time for six months after completing his studies if work there was quite the "hell" that he suggested, and I cannot accept that even young, inexperienced managers would positively want crew to be demoralised.
The Second Plaintiff did not call any evidence about Sutton but that might well have been because none was available after so long.
Mr Whittle was looking back about ten years, when he gave his evidence, and on balance I feel that he probably translated a number of incidents over a long, three year period, into a constant state of affairs in his recollection. But his evidence of understaffed shifts, crew being pressured to stay on at the end of their shifts, heavy work with late breaks when the restaurant was busy, but sending home when it was quiet, were all matters which occurred in other restaurants and I accept Mr Whittle's evidence that they occurred at Sutton.
Mr Andrew Cranna worked at the West Ealing restaurant between mid 1984 and mid 1985, starting as a twenty-eight year old Trainee Manager and advancing to Second Assistant. He gave his evidence well.
He said that there was a vast difference between what he was taught at the Second Plaintiff's Hamburger University about how to get the best out of staff and the importance of treating them well, and the reality once he got to the restaurant where the attitude of management was very much "just do as I say".
Mr Cranna said that the work was "high pressure". It was bound to be, because it was fast food work. Most people realised this and that it was the sort of job where there was no room for slackers, when they first joined McDonald's. But the pressure meant that if a crew member did something wrong he could not be taken aside and corrected in private, so he just got shouted at. There was very little praise to motivate people, and a lot of telling off. If a crew member answered back he was sent home and lost pay for the hours which he would have worked.
Mr Cranna said that there was an optimum figure of takings per head per hour. He said that very careful calculations were done to work manning levels so that the Restaurant Manager could predict the number of staff required for particular hours, and he could trim his manning levels very finely to suit profitability. Mr Cranna's own view was that there were not enough staff at the optimum manning levels. When the restaurant was operating at the so-called optimum staffing level, staff were generally pretty pushed and the pressure was fairly high. It only needed someone to fall ill to be short-staffed on a shift.
The Store Manager got into trouble with the Area Supervisor if costs went above the targets which had been set.
I believe that Mr Cranna's recollection of the exact targeting system was a little faulty, but the message of tight scheduling was clear.
Errant crew members were not dismissed in accordance with the proper disciplinary procedures. They were given dirty jobs or shouted at and humiliated in front of the rest of the crew until they left.
There was only one Rap Session while Mr Cranna was at West Ealing. It was difficult to get people to attend because there was fear that any complaints would get back to the restaurant management with resulting recriminations. The management would not know who made specific criticisms but they would know which eight or ten crew had been at the session.
Mrs Rose French recalled Mr Cranna working at West Ealing while she was Senior Supervisor for the area. She did not recall sensing or hearing about any feelings of unrest or unhappiness there, and she believed that she would have been aware of an atmosphere if management treated crew as Mr Cranna said.
Mrs Rose thought that if a crew member had been sacked other than in accordance with correct procedures he would have made a formal complaint to the company or to the Industrial Tribunal. I can not accept that as realistic. Many young crew members would shrug and leave it at that, in my view.
In McDonald's terms the West Ealing restaurant was average to good on audits.
She agreed that the fast food business could be pressurised at times because it is not always possible to predict the number of customers. But the pressurised times tended to be around lunch and supper and many employees found those periods more enjoyable and rewarding than the quieter periods.
She thought that Rap Sessions worked well.
Mr Cranna was in the restaurant day by day. Mrs Rose may have been an efficient Senior Supervisor but she could not hope to see what was going on all the time. No doubt bad management improved when she was there, and I accept Mr Cranna's evidence of harsh management, as well as his view of tight scheduling which accords with evidence of other restaurants.
Mrs Sarah Baker, then Dunn, worked as a crew member at the Second Plaintiff's restaurant in the High Street, Sidcup, Kent, from the 5th January to 29th May,1985, on which day she was dismissed.
Her evidence was not contested and I have no reason to doubt it. She was seventeen years of age and pregnant at the time. An under-manager agreed that she should work on the lobby till and in the back room, but not on a fry station, because of her condition.
In early May,1985, she became ill with an infection which presented a risk to her unborn child and she spent the 23rd and 24th May in hospital as a result. She returned to work on the 29th May. She was placed on a fry station despite her request to work elsewhere. By 1.15pm she felt unwell. When she told the under-manager that she felt dizzy, he told her that if she was not prepared to do the job she should go home. The manager himself must have been aware of this. Mrs Baker was upset. She had worked for an hour and a half by then. She understood that she was entitled to thirty two pence worth of refreshment for each hour that she had worked. She served herself a cup of coffee and set off for the back room to clock off. She forgot to record that she had taken a cup of coffee, as McDonald's procedures required. The manager dismissed her summarily for alleged dishonesty in taking the cup of coffee.
The store manager was in his late twenties or early thirties and the under-manager was in his mid twenties.
Mrs Baker made a claim to an Industrial Tribunal, which McDonald's "settled" for £90. They gave her a satisfactory reference.
During her time at the Sidcup restaurant Mrs Baker regularly worked double shifts. Moreover, the restaurant closed at 10pm and on many occasions during the first half of her time at the store, she worked on after 10pm, cleaning up, although she was only seventeen. On several occasions the work took until about 2am to complete. Mrs Baker clocked off at 10pm and was paid a "bonus" for the time worked after 10pm. She worked the late hours willingly, so that she could be with her boy friend, another crew member who mostly worked the "close" shift. Also she wanted to earn more money.
Her boy friend, Keith Baker, whom she later married, gave evidence that other "under eighteens" worked after 10pm. He himself was about 21 at the time.
Mr Baker also told me that one night soon after the Sidcup store had opened, a First Assistant Manager clocked everyone out at 12.30am, although the crew worked on thereafter. After some argument the clock cards were altered by hand at 2.30am.
Some crew members complained to the Store Manager who called in the Area Supervisor. They told the Area Supervisor that they would take further action by going to a union. The Area Supervisor said that would do no good because McDonald's would just shut the store as they had done in Australia when crew there started their own union. The Area Supervisor did, however, stop the practice of clocking out before work ended, and Mrs Baker told me that her own working after 10pm then ceased.
Mr Baker also gave evidence that a young woman crew member slipped on a wet floor in the grill room and burned her arm on a hot grill. Mr Baker spent time tending to her and was criticised by management for doing so, because he was not working. He said that there was constant pressure from management to work faster.
Mr Baker told me that he was sacked when he worked a double shift at the store manager's request and helped himself to a second serving of free food during his second break. He was accused of stealing it. He was asked back the next day but refused to return to work because he was upset and thought it was a dead-end job.
Mr Baker was challenged on the basis that he was sacked for stealing a box of meat, but he denied that and I thought that he was telling me the truth.
A statement made by Ms Karen Anstee was admitted under the Civil Evidence Act. Ms Anstee worked at the Southgate restaurant between July,1986, and June,1987, while she was a final year music student. She summarised her impression of the McDonald's working environment as "unsafe, dehumanising and manipulative". Many employees had burn scars, particularly on their lower arms. There was one occasion when the work area of the restaurant was flooded by a burst pipe but work continued "despite the treacherous conditions". Her statement complained of the fast pace of work which had to be maintained, the endless beeping of machines and the constant shouting of often aggressive managers, all leading to "a high stress atmosphere". I accept that Ms Anstee felt stressed at McDonald's but, reading her statement, I believe that she was quite unsuited to the work anyway.
The statement of Mr Dave McGee, admitted under the Civil Evidence Act, made various allegations of malpractice at the restaurant in the Seven Sisters' Road. They mostly related to resistance to his attempts to recruit crew members for a union to which I will come later, but he had other complaints to make.
Mr McGee worked at the Seven Sisters Road restaurant from November,1986, to July,1987.
His statement said that crew had to work very hard to get a rise. He did not get one in his eight months at Seven Sisters. His statement says that he was given all the worst jobs and the management really hated him but adds: "I didn't exactly go out of my way to please them. I answered back continuously. I was impolite whilst on the till. I refused to smile continuously at customers when told to do so. I did these things just to spite all the managers and the five yellow star badge people". So lack of a rise should have come as no surprise, in my view. He worked 15 to 20 hours of "very hard, physical, sweaty work", mostly on evening shifts. The "overwhelming majority" of the people who worked at Seven Sisters were students. Approximately 85% were under twenty-one and approximately 25% were under eighteen. Only one or two were "career people". Many people in the store worked in excess of 39 hours a week, but there was no increased rate for hours worked in excess of 39. In his supplementary statement Mr McGee said that two or three people worked in excess of 39 hours a week in May,1987. There seems to be some inconsistency here. A suggestion that one person worked twelve hour a day for six days seems to be pure hearsay.
Sometimes employees were forced to take their main breaks very early or very late in their shifts. Permission to take drink breaks was sometime refused because the store was "too busy". The store was permanently understaffed. The manager told Mr McGee that the number of staff which the store was allowed depended on the takings. Mr McGee said that he never received any training. Rap Sessions achieved nothing. They enabled management to see who complained and crew were scared to air their grievances.
It is fair to say that whoever took Mr McGee's statement clearly asked him about a number of other criticisms of McDonald's practices such as being asked to work on days off or beyond the end of a shift and that he exculpated the management, saying that there was no pressure on people to work days off if they did not want to and they did not usually work more than 15 to 20 minutes beyond the scheduled working time. Towards the end of his statement he said: "Only about 5% of the staff at my store disliked the job as much as I did". Even Mr McGee stayed for eight months although he says that he does not know why.
The Restaurant Manager at the time was Mr Tony Giardina who was quietly spoken and stayed calm and civil throughout his evidence, however robustly challenged in cross-examination. He started as a crew member in Enfield when he was sixteen. Seven Sisters was the first store he managed. He took it over in poor condition in February,1986, when he was only twenty. It took him six months to increase the payroll from 50 or 60 to 100. He told me that he could not remember Mr McGee but that his systems for improvement were in place by November,1986, when Mr McGee says he arrived. He started to see benefits by about the beginning of 1987 and he was Restaurant Manager of the year in 1987 when the store was store of the year. Mr Giardina left Seven Sisters in May,1988, and by the age of thirty was General Manager of the large, busy store in the Strand.
So far as Mr McGee's general allegations were concerned, Mr Giardina said that no more than 10% of the crew were under eighteen. A high proportion were about his age and 20 to 30% were over twenty-one. Once he reached his maximum complement of 100, about 30% were full-time. Perhaps 20 to 30% of all crew had ambitions to reach Floor Manager. There were a lot of students.
Pay rises of 15p were given quite frequently although a 10p rise was probably the most frequent. By late 1986 to 1987 no more than 20% of crew were on the basic rate.
Crew sometimes worked over 39 hours a week but it was not a regular occurrence. No one worked 12 hour shifts on 6 consecutive days. On occasions people on the noon to 6pm shift might ask to work on until the store closed at 11pm if the manager needed extra staff.
People sometimes asked to postpone their breaks to the end of their shift so that they could leave early. He did not deal with crew having to take breaks near the beginning of their shifts, which was a complaint made by other witnesses from other stores. Managers covered for crew while they had a quick drink.
The object of scheduling was to have the right number of people in the right place at the right time. If the store had been regularly understaffed he would not have been able to provide the consistent standards of service, cleanliness, and quality which resulted in the restaurant receiving a Restaurant of the Year award. He occasionally struggled on a bit short if staff were ill, although he tried to get staff in when that happened. Labour costs were generally 14 to 15% of takings but he was more concerned with staff levels in the restaurant than labour percentages. He was never under pressure from the company over labour percentages; nor did he put his assistants under pressure.
No one worked after 10pm when they were under 18. As a safety net under eighteens were not scheduled to work after 9.45pm.
Training was important and properly seen to.
Rap Sessions were held every six months by independent supervisors who were not allowed to tell him what individuals said, and did not do so. From their responses, he believed that crew took Rap Sessions seriously.
When dealing with pay, I referred to Mrs Florence Farrer has work part-time at Seven Sisters store since it opened in 1975. In my view she was a totally guileless and honest witness.
Mrs Farrer said that she was trained by Mr Paul Preston when she arrived at the Seven Sisters Road restaurant. She has enjoyed her work and she spoke well of the running of the store.
She thought that Rap Sessions were "very handy". The typed notices were pinned on the notice board. Then Tony Giardina, in his time as manager, would hold a crew meeting.
I do not accept Mr McGee's account of unduly long, consecutive shifts. His statement shows an extreme degree of animosity towards McDonald's and he accepted that only a small percentage of crew felt as strongly as he did. On the other hand Mr Giardina was a very young store manager anxious for success in his restaurant and I have no doubt that, as elsewhere, breaks went by the board if there were customers to be served. He probably worked his crew pretty hard. He worked hard himself.
Mr McGee was critical of the safety level at Seven Sisters Road. He was surprised that many major accidents did not occur because floors were slippery, and crew were near hot equipment and had to move fast. One black girl did have a very bad burn to the inside of her arm. Mr McGee had a bad burn to his wrist and he complained of lack of treatment but it appears to me he was given proper treatment at the store and he did not need to see a doctor.
Mr Giardina said that there was "hustle" which meant moving quickly and efficiently, and he would not allow crew to run around or skid. Floors were not slippery. Spills were promptly cleaned up. He himself has only suffered a limited number of burns and cuts. Mr Giardina had no recollection of a serious burn suffered by a black girl.
Ms Ann Tobin spoke of working conditions at the busy Strand and Croydon restaurants. She was a researcher for a film called "One Every Mile" which was made in 1987 with McDonald's approval, but with some monitoring of questions asked of crew, and some special arrangements for filming, Ms Tobin said. It was intended to portray a day in the life of the hamburger. It involved filming at both restaurants, and Ms Tobin worked three eight hour shifts as a crew member at each of the Strand and Croydon restaurants as part of her research.
I have seen the film. It shows scenes of hectic and noisy activity at what were obviously very busy times in the restaurants. Ms Tobin said that the scenes of hectic activity were very busy, peak periods.
Ms Tobin said that on two 11am to 4pm shifts she had only a two minute drink break. She said that she only had a two minute break because it was a relatively short shift.
There was a lot of shouting by managers at crew to keep going. She saw members of staff driven to tears. Managers stood over crew, clapping their hands and saying things like: "Come on. Keep going. Hustle". "Hustle" meant "keep going; keep moving". There was relentless pressure to keep going and to rush around between about 12.30pm and 4pm, not all the time. The pressure built up to a period of intense pressure. There was pressure to keep working all the time. If there was a lull you would be sent to sweep up even if it had just been done.
There was a lot of hot equipment and material around and a risk of slipping although Ms Tobin did not see anyone sliding.
Ms Tobin saw one young full-time worker drink a carton of milk at the height of his shift. He was instantly sacked. The manager said: "You are sacked. Leave the store".
Ms Tobin said that she never saw anyone allowed to leave at the official end of their shift at the Strand restaurant. The pattern was to report to the Floor Manager at the end of the shift and to ask for permission to leave. Without exception the crew member was always told to do something, no matter how trivial, that would delay their departure beyond their shift, whether it was wipe down the tables, sweep up the area, or something else. Sometimes the delay was only a couple of minutes, sometimes it would involve considerably longer, perhaps half an hour. She saw a number of crew members protest and in each case the answer was that if they didn't like it, they could always leave the company.
Ms Tobin saw a young woman crew member at the Strand, arguing with her shift manager one evening. If he insisted on keeping her on beyond her shift she would miss her last bus home, and end up having to take a taxi. Again the simple reply was that if she did not like it she needn't bother coming back for the next shift.
A Rap Session was shown in the film. Various McDonald's witnesses gave evidence to the effect that the comments of the crew seemed rather restrained and camera conscious compared with everyday, unfilmed Rap Sessions, but the crew seemed to be speaking out to me. If they were even more open at unfilmed sessions I would have thought that they were useful and that people were prepared to speak out.
Ms Tobin said that training on how to prepare food properly was fairly conspicuous by its absence. One lad was left to grill quarter-pounders on his own after thirty minutes, without the buddy promised by a training video.
Ms Almaz Anteneh who was Manager of the Strand restaurant when the film was made, gave evidence. She had various management positions with the Second Plaintiff between 1980 and 1993 when she became a franchisee operating her own restaurant. She did not remember Ms Tobin.
Ms Anteneh said that in 1987 when the film was made the Strand restaurant was the busiest McDonald's restaurant in the world. There were about 200 people on the payroll. It took a steady £2,000 per hour through the day. It was pretty hectic most of the time, but the young people who worked there mostly lived nearby and liked to be in that restaurant.
Ms Anteneh was asked about a manager who had complained to head office about having to work 96 hours a week. She had to take all the management schedules to head office and the maximum found was six shifts of eight hours. He would not have had to clock in or out and he could have stayed on beyond schedule but he would have been free to go.
Ms Anteneh said that Rap Sessions were effective. Training was done one to one on the restaurant floor.
She was asked about answers in a crew questionnaire to the effect that they most liked the atmosphere and the people and least liked the money. She thought that was pretty typical.
Ms Anteneh said that it was untrue that young people were kept back at the end of their shifts for trivial tasks. That would be bad for morale. Crew might have to finish a queue until their replacement came on and they would then work over their scheduled time but they would be asked: "Could you please finish it?". They did have to ask their Floor Manager before they went off duty. That was to avoid an area of the restaurant being left short-handed without warning.
My essential conclusions about the Strand restaurant, and Croydon too, are, firstly, that work could be very hectic there and that there was a lot of "fired-up" shouting during particularly busy periods. But despite Ms Tobin's evidence of tears on occasions, the people in the film seem to be lending themselves to the fast service team performance perfectly willingly, as one would expect young people to do.
On mere balance I am not satisfied that people were kept back at the end of their shifts as a matter of constant practice. No doubt some were asked to carry out some final task before they went off duty. Although Ms Tobin made a good impression in the witness box, some of her notes reveal a very strong bias against McDonald's and I am not prepared to prefer her account to Ms Anteneh's denials. Ms Anteneh was clearly a very competent business manager and I can not see why managers working under her should be allowed to risk reducing moral for such little gain.
A man identified only as "Lynval" who was an Assistant Manager at the Kentish Town restaurant in 1987 gave an interview to a journalist, which was admitted under the Civil Evidence Act. He said that there was pressure to keep labour costs down without a solution on how to do it, which led to pressure to hire as many under eighteen year olds as possible because crew under eighteen were paid less and this kept the average rate down. He was the only witness who made anything of this point. Senior management wanted store management to run labour under 15% of sales. It was unfair because customers complained, but if labour costs were to be kept down, there had to be less staff and customers were not going to get served as fast as they should do.
There was pressure to keep all operations supply costs such as food, soap and such down, not just labour costs. He did say that the best way to get labour down was to put volume up.
The constant pressure to make as much profit as possible and the long hours for a fixed salary meant that the company lost managers.
The Kentish Town restaurant could be really dead for two or three hours and managers would then try to send some people home for a couple of hours.
Although I did not see Lynval in the witness box I accept that these matters were reliable expressions of his own experience because much of his evidence was favourable to the Second Plaintiff.
For instance, he said that at McDonald's you should not schedule people for more than 39 hours in a week as there was no overtime. Crew members did not work more than 39 hours. But Kentish Town was quiet store. The system of Performance Reviews and pay rises worked well.
Marble Arch is one of the busiest stores in the McDonald's world, and the Defendants relied upon Civil Evidence Act evidence in the form of the written a statement of Mr Nicholas Magill who worked as a crew member at Marble Arch from October,1986, to about March,1987; a period which spanned his twenty-third birthday.
The Second Plaintiff called Mr James Atkinson who was the Marble Arch Restaurant Manager while Mr Magill worked there. Mr Atkinson went on to other management and supervisory positions before becoming the franchisee of a McDonald's store. He was McDonald's Store Manager of the Year for 1986, an award presented in 1987. He described Mr Magill as hard working and "a nice lad". He never complained to Mr Atkinson about anything. He was quiet and did his job.
Mr Magill's statement set out his rates of pay which only confirm my view that pay for crew was low. I preferred his account of his hours to Mr Atkinson's recollection, because Mr Atkinson's recollection of the weekly total did not accord with his recollection of Mr Magill's daily shifts. By Mr Magill's account he was earning £91.57 gross, rising to £97.76, for a 41 hour week.
Mr Magill made various criticisms of working conditions. The most pertinent were that the majority of the employees at Marble Arch worked well over the 39 hours specified in the Crew Handbook. "The limit was a joke. A few people at the store even did 24 hour shifts". There is no suggestion in his statement that crew objected to working the hours which they were given, and Mr Magill did not suggest that he was penalised in any way when he was occasionally asked to work the odd extra hour but he refused.
Mr Atkinson said that no one was scheduled to work more than 39 hours a week and very few wanted more than 39 hours and then only very occasionally when they were short-staffed. It would not be outrageous if someone worked, say, 45 hours as they might want to. The majority of crew were part-time. No one worked 24 hour shifts. Mr Magill might have got the wrong impression if he arrived at 6.45am to find people he knew as day shift crew finishing a "night shift close".
Mr Magill's statement said that employees were summarily dismissed on occasions or, more commonly, they were forced out by unpleasant treatment by the management. Mr Atkinson denied that.
There was no way of testing Mr Magill's account of 24 hour shifts and summary sackings and in the face of Mr Atkinson's apparently honest denials I feel unable to find that either occurred at Marble Arch.
Mr Magill said that all employees were made to clock on and off for their main breaks. This was common ground. His statement said that if an employee clocked out but forgot to clock back in his wages were docked in a way which Mr Magill did not explain, as a deterrent. Mr Atkinson denied this. He said that their return to work could be written for them by the shift running manager.
There was some similarity here, to an allegation about unrecorded breaks at Bath, but again there may have been an innocent explanation that the crew member was clocked out for an ample period when there was doubt about the actual time.
Mr Magill said that he normally got a break of 45 minutes at 10am after three hours work. There was then no chance of a break until after 2pm even if he missed his break at 10am because the store had been busy. People were often told that they could not stop work to have a drink. Mr Atkinson denied that staff were refused drink breaks although they may not have been allowed to take them just when they wished during busy periods.
I believe that there was a difficulty with breaks at this busy restaurant as there was at other restaurants.
Mr Magill said that there was a degree of understaffing which he described as "a slight understaffing squeeze" rather than "a serious long term understaffing policy".
Mr Magill said that there were budget ratios for every possible overhead. Every single expense was measured in terms of its percentage of the total sales. The manager, Jim Atkinson, used to brag about the figure for sales and overheads to the Area Manager.
Mr Atkinson said that the Budget Report which had anticipated figures for various items of expenditure including crew pay with the resulting percentage of sales printed beside them, came from Operations hierarchy but only after it had been initiated by himself and his immediate operational supervisors on the basis of the previous year's figures and future anticipated sales. The percentage was a guideline and he was not hung, drawn and quartered if he did not meet it. He did go over budget on occasions. He would be keen to meet the guideline, but for the right reason, namely that he was selling more than anticipated. He did not really speak to other members of his management team about the "crew percentage". In fact he reduced the labour percentage by spending more on labour and selling more food.
The figures which were produced supported this last comment. I believe that percentages were important but that Mr Atkinson met them by his efficiency as the manager of a popular restaurant.
For all his various criticisms of McDonald's at Marble Arch, Mr Magill said that he did not regret working at McDonald's, but he did not particularly enjoy it, which is pretty neutral.
The statement of Mark Ryan, admitted as evidence under the Civil Evidence Act, spoke of the tight control of labour costs, and hard work as a result, in about 1987.
Mark Ryan worked at the newly opened Holborn restaurant where he was a Second Assistant Manager. He was about to return to his usual post in Camberley. Some of his experiences were common to both stores.
Managers drew up the work schedules for the restaurant's needs, not the needs of crew.
Crew were sometimes asked to stay on at the end of a shift if the restaurant was short-staffed because staff had gone sick or for other reasons.
The company controlled costs very tightly. Waste was counted every two hours. Food product yields were worked out weekly. Control over crew labour costs was very tight indeed. At no store could labour costs exceed 15% of sales. So if sales were down, labour costs had to come down and managers had to schedule crew accordingly. On one previous night people were off "sick etc" and they had to run the restaurant with five of them rather than twelve. It was "really hard work" as a result, but no customers were kept waiting. The aim was that customers should wait no more than two minutes in the line and one at the counter.
There were some differences between the Holborn and Camberley restaurants. All Holborn staff were under the age of twenty-six years. In Camberley there were a lot of older women who worked really hard and well. There was more stress in the inner city restaurant. Mr Ryan preferred Camberley although he received a weighting of £1,500 p.a. at Holborn on top of his basic salary of £6,500 p.a.
Mr Ryan's statement seemed fair because he complimented the Second Plaintiff on some matters. It was an equal opportunities employer and any letter of complaint went "straight to head office, right to the top".
Mr Bhanulal Patel worked at a number of McDonald's restaurants in Liverpool, Blackpool and the Midlands between November,1987, and July,1991. He was in his late twenties at the time.
His Civil Evidence Act statement said that one of the first action plans to control overheads was to cut staff labour costs which meant that shifts were run without adequate staff. This led to friction between crew and the management team.
He said that many night shifts did not end until 4am and crew were then expected to return on a day shift having had very little sleep.
Mr Patel's statement said that "the majority of the managers were on an 'ego trip' and were 'power crazy'", but the allegations which he made to support this were very general with no dates or names of managers. He gave a list of restaurants where he worked but his general allegations were not linked to particular restaurants.
The Defendants relied upon an accident to Mr Peter Sutcliffe while he was working at the East Ham restaurant in 1987, as evidence that the Second Plaintiff failed to set up and maintain safe systems of work.
Mr Sutcliff's account of the accident was that he was carrying a heavy load and banged his head into the metal frame of the freezer door. He cut his thumb badly. He bandaged it but blood seeped through the dressing. The store manager encouraged him to carry on working as the lunchtime rush was approaching, but he had to break off eventually because of the extent of the bleeding. The incident was logged in the Accident Report book.
The Plaintiffs called Mr David Sexton who was junior manager at East Ham at the time. Mr Sexton did not recall Mr Sutcliff getting injured but this does not surprise me because Mr Sexton was first asked about it many years latter. During Mr Sexton's time working in McDonald's restaurants he saw accidents which were mainly just minor cuts, bruises or burns. He never witnessed a RIDDOR (reportable because it was serious) accident. An Accident Book was kept at East Ham.
I do not think that Mr Sutcliff's accident points to unsafe systems of work at the East Ham store and it was properly recorded according to Mr Sutcliff. I believe that the manager's reaction is yet another illustration of how tightly crew members were scheduled so that every missing member counted and made it difficult to meet the demand at busy times.
Mr Sexton who had advanced to being the Second Plaintiff's London and South Regional Systems Implementer by the time that he gave evidence, said that when he went to the Romford restaurant as a crew member upon leaving school twenty years ago, "it was fun ...... There was a large crowd of people there ...... We used to get a buzz from being busy and running round".
There was documentary evidence of some crew members under the age of eighteen working shifts with less than the statutory number of hours in between, in Orpington in late 1987.
In support of their contention that work at McDonald's was and is unsafe, the Defendants relied upon an accidental injury to a young crew member called Melanie O'Riordan at the Second Plaintiff's Epsom store on the 22nd June,1990.
It is common ground that Miss O'Riordan fell in the Epsom store on the 22nd June,1990, and injured her arm. She was then twenty years of age.
Beyond that the Defendants were at a disadvantage because Miss O'Riordan has sued the Second Plaintiff. Her claim has not yet been resolved and her solicitor had advised her not to give evidence about her accident in this trial unless subpoenaed. So the Defendants decided not to call her to give evidence.
By the time that this decision was made, however, the First Plaintiff had called Mrs Annette Norris to give evidence in anticipation of Miss O'Riordan's evidence. At the time of Miss O'Riordan's accident Mrs Norris, then Miss Hall, was the Epsom store manager. Mrs Norris gave evidence that she was in the restaurant when she heard Miss O'Riordan call out and saw here fall. Miss O'Riordan said that there was something on the floor but Mrs Norris saw nothing. It seemed to her that Miss O'Riordan tripped and fell over herself.
Mrs Norris would not accept that crew were made to move fast in the area where Miss O'Riordan fell.
The Plaintiffs called Mr Newton Brown, the Second Plaintiff's refurbishment designer at the time, to deal with the nature of the floor surface at Epsom. The Defendants cross-examined him about flooring materials used generally by the Second Plaintiff, but there was nothing in his evidence from which I could infer failure to take proper care for employees' safety.
The most serious accident and, so far as I was told, the only fatal one to an employee in a McDonald's restaurant in this country, occurred at the restaurant in the Arndale Centre, Manchester, on the evening of 12th October,1992, when Mr Mark Hopkin, a young Floor Manager, was electrocuted.
He was electrocuted in the wash-up area of the restaurant because a plug was badly fitted to the lead of a portable fat filtering machine, or had come loose. On the advice of a Senior Environmental Health Officer, the City of Manchester issued statutory notices to the Second Plaintiff prohibiting the use of portable electrical equipment within the wash-up area of the kitchen without the protection of a Residual Current Device (R.C.D.), and providing for more frequent portable appliance testing.
New Electricity at Work Regulations had come into effect on 1st April,1990, and in May,1991, Ms Jill Barnes, the Second Plaintiff's Health & Safety Officer, had sent a memo to all Store Managers and more senior operations managers to the effect that no employee, crew member, manager or maintenance man should carry out any repair or maintenance (excluding calibration) of electrical equipment unless they had completed an Applied Equipment Course (AEC) which had been revised to include tuition on electrical safety.
There had been electric shocks at McDonald's restaurants and on the 7th September,1992, only five weeks before Mr Hopkin died, the Second Plaintiff's Senior Services Engineer had sent a message to all Store Managers and more senior operations managers saying:
"The Company has a policy and that policy basically states that if you have not been formally trained to carry out any work to an electrical system or piece of equipment "DO NOT TOUCH IT". The law says the same thing. This includes changing a 13 amp plug, replacing a fluorescent tube or even the batteries in a torch. There are people in the UK at the moment facing manslaughter charges for ignoring these regulations. The Company Corporate is not liable, individuals are. "THE COMPANY WILL NOT GO TO PRISON FOR YOU".
The financial standing of the situation will not be considered where electrical safety is concerned, your M & R (Maintenance and Repair) account is no protection.
Electricity kills and with 30,000 plus employees the odds of a fatal accident are high. Please don't let one of your people be the first".
Nevertheless something had gone wrong at the Arndale Centre, Manchester store. The evidence which I heard did not enable me safely to allocate or apportion blame to or between individuals involved or company systems and there is no need for me to do so.
Ms Barnes accepted that with hindsight there were various risks. There was no cut out for the electric filter at the time of the accident. Over the next twelve to eighteen months circuit breakers were fitted to all the electrical circuits in all of the Second Plaintiff's restaurants throughout the U.K. The cable for the machine was too short so there was a risk that leads would be pulled from the points of the plug. Despite the various memos, more might have been done to stop untrained crew changing plugs. The work of cleaning the filtering machine was done in wet conditions.
For all that, in my view, the accident and the circumstances surrounding it did not establish a general disregard on the part of the company for the safety of restaurant staff. The memos to which I have referred were quite inconsistent with that and senior managers were very upset by Mr Hopkin's death.
The Defendants' case on practices at the Second Plaintiff's Bath restaurant depended upon the evidence of Mr Michael Logan and Mr Danny Olive. The Plaintiffs called Mr Sean Richards, Mr Perrett to whom I have already referred, Mr Christopher Cox and Mr Ian Henden. There was some general disclosure of Bath documents and I ordered more detailed disclosure of documentation relating to the busy months of August,1993, May,1994, and August,1994, in the hope that they would provide a sufficient snapshot without the need to sink even further beneath the existing paperwork.
Mr Logan joined McDonald's as a crew member in Bath in April,1989, when he was just twenty. He was a student and he worked both part-time and full-time. He left at the beginning of November,1991, in circumstances which led him to make a complaint of unfair dismissal. His Industrial Tribunal Application was compromised with the help of ACAS. The Second Plaintiff paid him £750 in full and final settlement of all claims and he was taken back in his previous position of Floor Manager at Bath.
Mr Logan finally left the Second Plaintiff's employ in November,1994. He was a shift running manager two or three times a week for the last three years.
Mr Olive worked for McDonald's from September,1989, when he was sixteen, part-time and full-time as a salaried manager for a period. He went to the Bath restaurant in October,1993, when he went to University in Bath. He left in April,1995. He was a Floor Manager throughout his time in Bath. His evidence in chief consisted of very shortly confirming the allegations made by Mr Logan, save for the docking of staff hours. He was given a good reference by the Restaurant Manager.
Mr Logan's allegations so far as employment practices at Bath were concerned were that scheduling was used as a tool of discipline with underperforming employees being given less hours or unsocial hours; that crew had to work long hours; that the clock cards of crew were altered so that longer breaks were recorded than they had taken; that crew were coerced into taking short breaks and pressurised into taking them early in their shifts on Saturdays; that Performance Reviews were done late and then rushed, and that "hustle" and other practices led to lack of safety.
Mr Richards was already at the Bath restaurant when Mr Logan and Mr Olive started there. He became a part-time crew member in May,1988. He began working full-time in October,1988. He was promoted to Floor Manager and then Second Assistant Manager. He became a First Assistant Manager in 1993.
So far as scheduling was concerned, Mr Logan said that management prepared "hit lists" of those who needed improvement or whom they wished to force out. There was no system to check inconsistencies, so managers had a free rein to do as they wished.
However, when he gave evidence Mr Logan said that only two people whom he named, were mistreated. He said that one of them did need to be pushed. Both had critical notes on their disciplinary records.
Mr Richards denied that the schedule was used as a means of discipline. Its purpose was to ensure that the restaurant was appropriately staffed by capable workers at all times. Employees' wishes were accommodated as far as possible, but every week there were requests for extra hours or no weekends or night shifts. Schedules were checked every week by the direct superior of the manager who prepared the schedule.
The disclosed clock card files of the two men whom Mr Logan said were mistreated, showed that one did a lot of closes in all three months of August,1993, May,1994, and August,1994, and the others did a lot of closes in August,1993. But Mr Henden who went to Bath as a First Assistant Manager in 1991 said that both men were still working at the restaurant and that their requests in recent years not to work late had been accommodated.
So far as long hours were concerned Mr Logan said that he consistently worked well over 45 hours every week during the July and August tourist season in 1990 to 1991. Many others did the same. There was no overtime. The evening and premium rates were compensation for unsocial hours; not for long hours. But Mr Logan said that some people wanted to work very long hours, although this was because they were not getting enough money. He named people who complained to him about getting unsocial shifts. Their clock card files showed some unsocial hours but nothing severe, in my view. Mr Richards said that no one was forced to work overtime and Mr Logan and one of the people he named requested extra hours because they wanted to travel.
Mr Perrett and Mr Cox were happy with their hours and they had the shifts which they wanted.
The documentation for August,1993, May,1994, and August,1994, showed full-timers working five days on and two off. Only nine staff out of eighty-odd worked fortnights of over eighty hours in August,1994, although this may have been a high proportion of full-timers. Only two worked a fortnight of more than ninety hours. It would be surprising if Mr Logan returned to McDonald's after his "dismissal" if he was being made to work much longer hours than he wished. Mr Cox worked between fifteen and twenty-hours a week during term time when he was studying. During the vacation his hours increased to about forty five a week. He did not consider this to be excessive and he was pleased to have the opportunity to earn extra cash.
Mr Logan said that the alterations of clock cards were to punish crew for forgetting to clock out for their main, forty-five minute breaks. An hour's break would be registered instead.
He also said that he once witnessed a manager randomly clock time from people's clock card reports to reduce labour although he thought that this was a rare incident. He said that Mr Sean Richards did this in 1991. "People were docked hours or minutes". He said that Mr Richards used another manager's code and laughed about saving labour costs. Mr Richards was a Floor Manager at the time and, according to Mr Logan, he knocked off a few minutes here and there, and he did what he did on that one occasion because he had had a hard day and it was 1 a.m., not in order to cut labour costs.
Mr Olive said that he was not aware of time being docked from clock card files.
Mr Richards said that hours were only altered when crew forgot to check in or out.
Mr Henden went to the Bath restaurant in 1991 as a First Assistant manager. He did not know of hours being docked and he had not seen it happen in any of the eight McDonald's restaurants which he had worked in.
Mr Perrett and Mr Cox checked their payslips and never noticed a discrepancy.
Mr Logan said that employees' rights to a break were often abused, particularly during periods of high custom, Saturdays, school holidays and the summer season. Managers coerced crew into taking a short break by making it clear that a longer break would adversely affect other employees' prospects of getting a break. On many occasions employees worked for six hours without a break. Drink breaks were only a minute or two. It was common practice on Saturdays for people whose shifts started at 10 or 10.30 or 11 a.m. to be pressurised into taking their breaks almost immediately or even before they clocked in. Crew could be coerced to go on an early break with the threat of a job which they did not like. When they returned they would have to work from 11 or 11.30 a.m. to 6 or 7 p.m. without a break on the busiest day of the week. Mr Logan was party to this practice, as a Floor Manager, because it was essential to have as few breaks as possible between noon and early evening on a Saturday.
If the Area Supervisor came to the restaurant when it was understaffed and asked why, and was told that staff were on breaks, he would ask why they had not been brought off their breaks.
Mr Logan said that the Area Supervisor put pressure on the scheduling manager to reduce the labour percentage from 15 to 13%, so he ran shortstaffed. Mr Henden denied this. He said that there was encouragement to schedule the right numbers of crew. He was not told, as a scheduling manager, to keep labour costs to a fixed percentage.
Various crew schedules were put to Mr Logan to suggest that the restaurant was adequately staffed, on Saturdays in August,1994, for instance. But Mr Logan would not agree. "It was frantic", and if the staffing was adequate there would have been proper breaks. He said that staffing improved in 1993 and 1994.
Mr Richards and Mr Henden disagreed with Mr Logan's account of early or short breaks.
I was taken through various computer print outs of the times when people worked on their Saturday shifts and there were a significant number of early or late or shortened breaks, particularly in August.
Mr Cox said that Floor Managers were in charge of doing the breaks schedules. He did not, as a Floor Manager himself, make sure that employees took the whole of the break which they were entitled to. He was happy for them to come back on duty early if they wanted to.
Mr Perrett said that some crew took early breaks, but this was their own choice. They might have been drinking the right before and wanted some food inside them.
Everyone who was asked about it agreed that Saturdays and particularly Saturday lunchtimes were very busy, and there were complaints of early or short breaks in the notes of Rap Sessions.
Mr Logan said that Performance Reviews were almost always late, usually one to six months overdue, and they were often done in large batches before or after a head office audit. They were often rushed, with stock phrases bearing little relevance to the particular employee. Mr Logan himself had put different dates on Performance Reviews which he had done one after the other. But everyone got their 5p.
The restaurant got low marks for Performance Reviews on audits, and the notes of Rap Sessions referred to late reviews.
Mr Richards said that some Performance Reviews were late, but rarely more than three months, and that if they were late pay was backdated.
Three months seems quite a long time to me and backdating pay does not entirely solve the problem of someone who has gone short in the meantime.
The difficulty with the value of the Performance Reviews which were produced was that dates on them may not have been accurate, in my view.
Mr Richards agreed that "hustle" meant get a move on, but it was no justification for running in any part of the restaurant. Yet Mr Cox said that he had seen staff running on the front counter where Mr Perrett said that it was dangerous to run because people carried hot drinks. It was his experience that people who ran were told not to.
Mr Logan said that in his first few years at the Bath restaurant, 1990 to 1993, the word "hustle" was frequently used, usually when business began to pick up. It was used to mean "speed up" in the kitchen and "start running" on the service front. The most popular till, nearest the door, was furthest from the machine for shakes, the most popular product, so there was a lot of running and dodging to and fro.
A trip system was installed to avoid the risk of electric shocks, but a fault in the installation meant that the grills regularly tripped out. So the trip fuse was removed on occasions so that work could continue. Electrical repairs, mainly to toasters, were carried out by an unofficial repairman, Mr Jagon Flint, who had no relevant qualifications so far as Mr Logan was aware. Mr Logan did say that Mr Flint was quite a competent chap. Mr Richards said that Mr Flint was trained. "Bun boards" kept falling down and burning people.
Mr Logan's overall conclusion was that "McDonald's through its actions ... treats its employees as a cost and not a resource, giving little regard to their rights or well being". He said that he was offered promotion early in 1994 but he did not accept it, partly because of the company's attitude towards crew members. Mr Logan said that staff turnover at Bath was very high for the McDonald's region of which it was part, but Mr Richards pointed out that Bath was a student city and that student crew members came and went frequently.
Mr Logan said that there was pressure to achieve targets for food yields and he saw a manager water down shakes. Mr Logan heard managers discussing the possibility of increasing the air content in shakes to improve yield. Shake cups were often underfilled if shake yield targets were proving difficult to meet. The trick was to put the lid on the underfilled shake cup, turn it, bang it so it filled the whole cup, turn it back and hand it to the customer. The managers did it. Mr Logan had done it.
There was an issue as to why Mr Logan left. He said that he turned up to run a late shift on the 9th November,1994. He found that not enough crew were scheduled so he left. The Second Plaintiff disputed that. What was clear was that Mr Logan left hoping to get another job for which he had a real vocation, but he was injured in an accident and could not take up that job. So he claimed unemployment benefit on the basis that he had resigned his position at McDonald's because of the poor working conditions there, "without having immediate employment". This was technically true but it did not tell the real story and Mr Logan said of a letter which he wrote to the Employment Benefit Office: "I think I am quite melodramatic in that statement, because I was worried about not getting benefit ......". This means that I must look at his allegations about the working conditions at Bath with a very critical eye.
A number of people to whom Mr Logan referred as the objects of unfair scheduling and long hours were still working at the Bath restaurant, and Mr Logan said that he sometimes found his job there quite satisfying. "The satisfaction I gained from the work was quite high, but the satisfaction from pay was non-existent". He stayed on at the restaurant full-time for two years after leaving college.
There was evidence to suggest that staffing at Bath got better in 1993 and 1994. Mr Cox who gave evidence in January,1996, said that the Second Plaintiff was becoming a better company to work for, but he would not have had criticisms of the company. His criticisms were, perhaps, of individual managers, and perhaps that was down to training. Of course training is the responsibility of the employer, and in my view Mr Cox's comments are the clue which points to some practices at Bath having been poorer than they should have been at some stage in the past.
My conclusions with regard to the Bath allegations are as follows.
Scheduling may well have been used as a tool of discipline on occasions, but I see no harm in that if it involves reducing the hours of those who are not working well, in favour of those who are. The evidence of unsocial hours as a form of discipline was too general to be convincing, as was the evidence that scheduling was used to force unwanted crew to leave.
Some full-time crew worked longer than the prescribed full time week of 39 hours, without payment of an overtime rate, but the long weeks spoken of were about 45 hours in the tourist season. That is not a particularly heavy week by a lot of people's standards and the crew concerned seem to have been glad to have the opportunity to work extra hours.
Odd or shortened breaks suited some people but I cannot believe that this view was general. I accept Mr Logan's evidence that there was some shortstaffing which was due to pressure to reduce the labour percentage, as well, probably as a short payroll, as it was at Colchester, even though the view that it was better to schedule the right number of crew, was expressed to Mr Henden. There was the same feeling of pressure to save costs as there was at Colchester, demonstrated by the watering down of shakes or underfilling of shake cups. I found Mr Logan's description of this compelling.
I do find that early, late and shortened breaks were forced on crew on occasions, and to a significant degree on Saturdays, to deal with the pressure of custom. This must have occurred because of over close scheduling of crew for the day. The odd or shortened breaks came with hard and fast work on some parts of some shifts, particularly on Saturdays. The documentation tended to support Mr Logan's account of distorted breaks, rather than Mr Richards' and Mr Henden's evidence to the contrary.
A significant number of Performance Reviews were late, leading to people having to wait for the extra money which they were judged to deserve, even when pay rises were backdated.
Hustle involved some running on the service front, and speed in the kitchen, but there was no evidence of accidents as a result, and I do not consider that there was any real danger at Bath, either as a result of hustle or burns or electrical faults.
I am not convinced that Mr Richards "docked" the hours of some crew members on the one occasion alleged. Even if he did it was an individual's mischief rather than an attempt to save labour costs. Nor am I persuaded that people were clocked for longer breaks than they had taken, in order to punish them or to save the Second Plaintiff money. If they had not clocked in or out, the presumption was adopted that they had taken on hour's break.
The Defendants' case of poor conditions of employment at the Second Plaintiffs' restaurant and Drive-Thru on the A4, Bath Road, near Heathrow airport depended on Mr Alan Beech. The restaurant opened in 1991, and Mr Beech worked there from early November,1993, until he left to go to university in September,1994. Mr Beech passed his eighteenth birthday on 5th April,1994, halfway through his period at McDonald's. He worked part-time, two or three times a week usually, with a maximum of four times a week. When he started, Mr Mark Riley was the store manager. Mr Jon Nevison took over as store manager between February and June, 1994. Then Mr Dave Roberts took over. Mr Roberts was still the restaurant manager when Mr Beech left. The restaurant was originally open from 6 or 7am to 1am. It has recently been open 24 hours a day. Mr Beech's scheduled shifts were usually 12 noon to 8pm or 4pm to 11pm or midnight.
Most of Mr Beech's evidence relating to events and practices at the Heathrow restaurant revolved around the pressure under which crew worked, due to understaffing.
His original statement, written by him in the expectation of giving evidence, included the statement that "you are ... shouted at to work faster because you are doing the work of 4 or 5 due to understaffing and can't possibly keep up. On one occasion in the summer of 1994, for over 90 minutes I was running the entire kitchen and one till. Normally the kitchen should have about 15 people working in it ...."
I doubt that one man could do the full work of four or five or that the kitchen required fifteen staff to run it. When Mr Beech gave evidence it became clear that it was about 11.20pm or 11.30pm when he was asked to run the kitchen on his own. By his own account it was a time when people were mostly ordering drinks, shakes or a coffee or perhaps a pie. There were two or three other staff on tills and they could prepare and serve drinks from the machines or fountains. It was not a period when a lot of food was being sold, and Mr Beech took orders on his till when called by the manager on the front because he was not doing much in the kitchen. Even then he only took four or five orders on his till: he was mainly in the kitchen. It was honest of Mr Beech to volunteer this extra information when he came into the witness box, but the picture of the incident given in his original statement was completely misleading in my view.
Moreover, Mr Beech said that it became obvious to him that McDonald's was not the place for him about three hours after he started work and that when he finally left the Heathrow restaurant ten months later it was with great relief. His main complaints boiled down to having had to work too hard and too fast for too long. However, he accepted that when he was interviewed for the job he said that he liked fast, active work; that three weeks after he started he wrote under "Employee's Comments" on his Probationary Performance Review: "Enjoying the work and people. Keen to do well"; and that when he told Mr Roberts that he was leaving, to go to university, he said that he would be coming back in December. Having listened to Mr Beech's evidence, I believe that what he said at his job interview was untrue but said to get a job. Mr Beech said that what he said at he Probationary Performance Review was untrue but made to ensure that he kept his job, and that what he said when leaving untrue but made to keep his options open in case he was short of money at the end of term, although he had no intention of going back to McDonald's when he spoke to Mr Roberts. Clearly Mr Beech was prepared to be untruthful about his work when it suited his purpose.
As a result of all these matters, taken together, I must treat Mr Beech as an unreliable witness save where there was some evidence from McDonald's own witnesses or documents to support it, or the nature of the system means that his evidence is inherently likely to be true. As it happens there was support for a number, but not all, of Mr Beech's allegations.
Mr Beech's first allegation was that he and other crew who were under eighteen regularly worked after midnight, until as late as 2.15 am. He said that he worked past midnight on 75% of the shifts where he was scheduled to work to midnight, but it was usually for less than an hour past midnight. Although this was contrary to the company's express policy, the restaurant was open until 1am and it was "ridiculously" understaffed. Crew under the age of eighteen clocked out at midnight and managers altered the computer record of hours worked by adding the hours worked after midnight to the beginning of their shifts. Apart from any question of the undesirability of young crew working late this practice meant that the crew were paid at the regular rate for the additional hours recorded rather than at the higher rate that prevailed during the late hours. Managers put pressure on Mr Beech to work late, when he was still seventeen, by indicating that they would be unfriendly towards him or put him on the fry station which he disliked, if he refused. He said that fear of being scheduled less hours in the future also put pressure on crew to accede to managers' requests.
Some of McDonald's witnesses who worked at Heathrow, including some who had worked there when they were under eighteen, denied any practice of under eighteens working after midnight, but Ms Kim Moffatt who was an Administration Assistant at the restaurant until just before Mr Beech left, and who interviewed him for his job there, said that crew who were under eighteen worked past midnight occasionally under Mark Riley because the restaurant was under staffed. It happened more frequently when Mark Riley was replaced by Jon Nevison and the store became seriously under staffed. She was aware that clock cards were altered to hide this late working on occasions, but she suspected that it went on quite a lot. She was sufficiently concerned about under eighteens working past midnight to mention it to the Area Supervisor, Mr Semir Khazna, while Mr Jon Nevison was store manager. Mr Khazna was brought in to improve the store. Shortly afterwards Mr Jon Nevison was replaced by Mr Dave Roberts who accepted that "a number of crew who were under eighteen did work after 12 o'clock", and it sounded to me as if the practice continued for a short period under Mr Roberts' management while he recruited more staff.
Ms Moffatt did not speak to Mr Khazna about altering clock cards because she had no actual evidence of it. He did not ask her how the practice had been covered up.
Jon Nevison was transferred to another restaurant against his wishes, but he was not disciplined. Nor was Mark Riley who was in fact promoted. Ms Moffatt did not complain about him, but I would have expected some check of his practices to be made if Mr Khazna had taken the question of under eighteens working after midnight to be serious mismanagement.
Ms Moffatt said that if higher rate hours worked after midnight by under eighteens were transferred and added to the beginning of their shifts to hide the breach of policy, the number of hours involved would be increased to take account of the drop from premium to regular rate, and I do not doubt what she said. She was a careful witness who made no bones about the malpractice of employing under eighteens after midnight and fixing the records to cover this up.
There was a lot of debate in the evidence about just how the numbers of active crew on the roll at the Heathrow restaurant at various times compared with the number of crew required to run it without undue stress and strain; but there was acceptance from McDonald's witnesses, from Mr Khazna as well as Ms Moffatt, that the store was understaffed and in my judgment it was quite clearly understaffed to a significant extent throughout the greater part of Mr Beech's time there and during the months before his eighteenth birthday. Taking this factor with the admittedly high proportion of young crew, some of whom must have worked evening shifts, and Ms Moffatt's evidence and the evidence of what happened at Colchester, I have no hesitation in accepting Mr Beech's evidence on work after midnight and pressure to do so, despite my reservation about his generally reliability. I reject any suggestion that the practice only prevailed under Jon Nevison. It was happening before he took over.
I also find that computer records were altered to cover up the fact of under eighteens working past midnight. In my view this was virtually inevitable as a means of hiding what was happening.
Mr Beech's next complaint was that crew worked very long hours at the Heathrow restaurant. His evidence about others' long shifts was hearsay.
Mr Beech said that on nearly all his shifts he himself was kept in the restaurant for anything between a quarter of an hour and five hours beyond his scheduled hours, when he did not really want to work on. He said that he could remember working one shift of fourteen hours when he was under eighteen. It lasted from 12 noon to 2am. He was "fairly sure" that he had worked other shifts of about thirteen hours, and he had worked a lot of ten or twelve hour shifts. There was the same pressure from management to work long shifts as there was to work after midnight.
The documentation showed that Mr Beech worked twenty-three fortnightly pay periods. In two of these, both after he was eighteen and after he had taken his 'A' Levels, he worked over 40 hours in the fortnight. In eight he worked from the high 20s to the high 30s. He never worked more than 48 hours in a period which was probably spread over four to six shifts, most likely six, it seems to me. There were other witnesses about long shifts. Mr Paul Le Maire said that people worked a maximum of nine to ten hours a shift but he accepted that people might work shifts as long as fifteen to sixteen hours very occasionally. Mr Stephen Plaister said that his longest shift was fourteen hours on one occasion only. Both of them are young. They said that long shifts were always voluntary and that there was therefore nothing unfair about them. Mr Roberts accepted that due to shortage of staff a number of crew were working long hours when he arrived. The documents showed that some crew worked high totals of hours over fortnightly pay periods.
Ms Moffatt told me that it was true that people worked long hours due to understaffing and poor discipline which allowed people to get away with telephoning in sick at the last moment or just not turning up, Mr Khazna said that crew were asked to stay on at the end of their shifts for the same reasons. Managers were too busy to improve discipline, according to Ms Moffatt, and she had to help run shifts which meant that she had less time to recruit new crew. It was a vicious circle. Nevertheless Dave Roberts changed things.
In my view there was sufficient evidence of long shifts from McDonald's own witnesses for me to accept that Mr Beech worked long shifts of up to fourteen hours on a few occasions, but it could not have happened very often when one considers his fortnightly totals. I think that it is inherently likely that he and some other crew worked on beyond the end of their scheduled shifts under management pressure to do so and without warning. It must be difficult for young crew to say "no" when there are insufficient staff to replace them at the end of their scheduled shifts and they know that future scheduling and work allocations are in the gift of the managers. Two thirds of the crew were under twenty-one according to Mr Khazna and many of them were students.
Mr Beech next complained that breaks were given only when managers thought that the store was quiet enough. He was once given his 45 minute break only nine minutes into a ten hour shift, without any choice in the matter. He was told: "Go on a break or go home". He was only told that once, but "if you did not take your break when offered in a quiet period even if it was near the beginning of your shift, there was no guarantee that you would get it until 45 minutes before the end of your shift, with the result that you worked through it or went home early if allowed." Mr Beech did not usually feel that he had a choice about when he took his break, although some managers were more accommodating than others. On occasions he worked eight, ten or twelve hours without a break.
No everyone wanted to take their full breaks. Mr Paul LeMaire who said that he worked up to 50 hours a week at the Heathrow restaurant because of the paperwork which he had to do, said that he sometimes took only a fifteen or twenty minute break in a ten or eleven hour shift, but but that was his choice. People tried to ensure that he took his whole break entitlement but he told them that he did not need it.
Mr Semir Khazan who was brought in to sort out understaffing at Heathrow said that some people actually enjoyed their work and they would rather cut their breaks short than sit around doing nothing. I do not find this as strange as Mr Morris suggested it was, especially as they were got paid when working but not when on their main breaks.
Ms Moffatt told me that she had never come across anyone being told to go on a break or go home. I accept that it happened to Mr Beech on one occasion because I heard acceptable evidence of a number of instances of autocratic management at McDonald's in relation to the taking of breaks at other restaurants; there was the pressure of understaffing at the Heathrow restaurant, and there was pressure to have all staff who were in the restaurant working during busy periods which often coincided with the middle of shifts. However, I do not find that a direct ultimatum to take a break early or to go home was typical. Mr Beech did not suggest that it was. I do find, for the same reasons, that breaks were frequently taken early in shifts under the implicit threat that if they were not taken then the demands of business would mean that they were taken very late if at all. There was some acceptance of this in the evidence of Stephen Plaister. I can see that it is easy for breaks to fall by the wayside or for them to be imposed at odd times if a manager is concerned that he will not have enough staff to cope with custom.
Mr Beech also complained about the pressure under which staff worked at the Heathrow restaurant due, he said, to the shortage of staff. In his statement adopted in evidence, he said that "hustle" was used in the kitchen all the time. It meant running and scrambling about, possibly while being shouted at, and frequently burning oneself and colleagues. Mr Beech accepted that at the end of November,1994, he passed his probationary performance review, which involved him knowing that hustle meant organising and co-ordinating work safely and efficiently without running, but he said that practice differed from theory. Sometimes managers would shout: "Work faster." Crew would shout back: "Get more staff".
I have no doubt that staff were worked hard and fast at Heathrow. This accords with the McDonald's system and must be accentuated if a restaurant is understaffed, as McDonald's witnesses accepted. Mr Le Maire said that when the restaurant was understaffed people "just worked more quickly".
The evidence of "work faster" and "get more staff" has the ring of truth in a restaurant which was understaffed, but it also shows that crew were far from cowed by management.
I am not prepared to find that there was running in the kitchen, save perhaps on the odd occasion, nor that there were "frequent" burnings as a result. These matters were denied by McDonald's witnesses and in his oral evidence Mr Beech said that running and trotting occurred less commonly in the kitchen than on the front counter, which was not the impression which his statement gave.
Mr Beech complained that he did not receive any proper orientation or training before starting work, but Ms Moffatt said that she followed her usual practice of full orientation in his case, and on balance the documentation supported her. He clearly worked unsupervised before he passed his first Occupation Checklists, but he is an intelligent man and the work involved must have been easy for him to learn quickly. I am in some doubt as to whether he had a Crew Handbook of his own, but he signed an acknowledgement that he had read and understood all sections of the Crew Handbook. He accepted that fellow crew members did have copies, and I am sure that he knew that he could find any information that he wanted in one of theirs if he chose to seek it. I am not prepared to find that there was a lack of training which put crew in circumstances of risk; nor that Mr Beech was kept in ignorance of the essential terms of his contract of employment.
Mr Beech said that he was not paid his due holiday pay when he left; but this allegation fell on neutral ground in the sense that it turned out that it was paid into his account, in my view, but he was given the impression that he had not been paid by his incomplete reading of documents which were new to him.
Mr Beech said that one consequences of rushed working was regular burns which were not entered in the accident book. He mentioned one serious burn suffered by a crew member who was made to change the Teflon on the grill without the grill being turned off. Ms Moffatt did not get to hear of this accident although she thought that it would have come to her ears if it happened and she monitored the accident books and knew that they were being used. None of the McDonald's witnesses admitted hearing of the Teflon incident. They said that Teflon can be and is changed safely while the grill is still on, although it is easier to do it when the grill is off. It was accepted that burns do occur. In the light of my doubt about the probity of Mr Beech's evidence save where supported, I am not prepared to accept his version of the frequency or seriousness of accidents including the Teflon accident, although some must have occurred and no doubt some were not recorded.
Mr Beech said that on several occasions he and other crew members suggested that they should investigate starting or joining a union. The suggestions were not particularly serious, but one discussion was overheard by a manager who said: "Don't even say that". Shortly afterwards a large notice in red marker pen capital letters appeared on a noticeboard in the crewroom, saying something to the effect that "McDonald's is a non-union company. Anyone found to be conspiring to start or join a union will be subject to instant dismissal." No McDonald's witness admitted to seeing such a notice although Mr Beech said that it remained in place for a week, in August or perhaps July,1994. Mr Roberts was the store manager by then. He was very positive that no such notice was in the crew room while he was store manager. McDonald's witnesses accepted that there were occasional jokes about going on strike or joining a union, and, as I say elsewhere I believe that there was a widespread antipathy to unions amongst McDonald's managers.
I have not found this an easy issue to decide, but the specific allegation relating to the poster relies entirely upon Mr Beech's evidence. I think that some notice deterring union activity was probably put up, but in the light of my view of Mr Beech's reliability I am not confident of his account of just what it said.
One matter which did not depend on the evidence of Mr Beech was the Defendants' suggestion of late Performance Reviews and resulting late pay rises. Mr Khazna accepted that there was a problem with late reviews, but neither the documents nor the oral evidence enabled me to assess the extent of the problem which no doubt arose from the shortage of managers, which Mr Khazna accepted.
In summary I accept the allegations of pressure on crew under the age of eighteen to work after midnight and of pressure on crew generally to work long shifts, occasionally very long, beyond the hours scheduled and of inadequate breaks from November, 1993, until June, 1994, at least, when Mr Roberts arrived at the Heathrow restaurant. There were some late performance and pay reviews. I consider that crew were driven to work very hard for their money, for certain periods at least. I reject the rest of the allegations, in substance.
Heathrow was a relatively new restaurant. Mr Khazna said that it was a high volume restaurant, which is hardly surprising given its location. The problems which Mr Khazna was brought in to deal with must have arisen because the store was undermanaged and understaffed from an early stage.
I was clear that in addition to the shortage of crew there was a shortage of managers and as a result floor Managers and Assistant Managers worked long hours. The former are paid on an hourly basis, but there is no overtime rate. The latter are on a fixed salary, so they are paid nothing extra for long hours.
The consequence of understaffing, long shifts from time to time, shifts extended without due notice, odd or curtailed breaks or no breaks, under eighteens working late and rushed work were foreseeable in my view in the case of a relatively new restaurant in a potentially busy location and the Second Plaintiff's higher management must have realised what was likely to happen if the restaurant opened before adequate numbers of trained and experienced staff were available. Presumably commercial reasons led to the restaurant being opened and remaining open anyway.
The Second Plaintiff admitted convictions in 1982 and 1984 for employing children and young persons for illegal hours or periods or without legal breaks, but they did not help me to decide whether conditions of employment by the Second Plaintiff were bad. There was also a conviction in 1991 for dangerous working conditions, but they went unspecified.
A number of the defence witnesses to whom I have referred spoke of experiences which they did not enjoy, like working in large freezers without adequate clothing or going on litter patrols in dirty clothing, but even supposing that they were true, I could not infer any general malpractice from them, and I do not propose to rehearse them here.
The evidence of working conditions at the First Plaintiff's own stores in the U.S. was very limited. Most of the Defendants' cross-examination of Mr Stein on the subject was directed at whether the Corporation or, particularly, any of the franchisees whom it was supposed to supervise to some extent, had been guilty of violations of U.S. Federal or State laws relating to child labour. Mr Stein's report to the Congressional Sub-committee said that approximately 1,700 of its own 85,000 hourly crew employed were fourteen or fifteen years old. He did not give a figure for franchisees.
It appeared that there were special restrictions on working hours for fourteen and fifteen year olds and a "curfew" for under eighteens, but the evidence did not disclose the details. For all I know they vary from state to state. Mr Stein's evidence to the sub-committee accepted that there had been "a few violations of State laws by the First Plaintiff in its history and that twenty franchised McDonald's owner-operators had been cited (accused, not necessarily prosecuted, let alone convicted) for violations. Mr Stein's evidence to the sub committee put this at 1% of the First Plaintiff's 2000 owner operators but it appeared that only 200 to 300 had been inspected, so that the 20 were 6.7% to 10% of those who were inspected.
There was evidence that one particular owner-operator in Pennsylvania had been cited for several hundred violations of child labour laws in 1988 or 1989 and that the First Plaintiff had persuaded him to reduce the numbers of his restaurants so that he could achieve better supervision of them.
All this, and such other very limited evidence as there was, fell short of proving that breaches of child or young persons labour laws were a significant feature of work for McDonald's in the U.S. It might be so, but it was not proved. Even then breaches of child labour laws would not in themselves prove that working conditions were bad, although they might not say much generally for the First Plaintiff or its systems.
In April,1988, an eighteen year old High School Senior worked over twelve hours in a seventeen hour period, including an all night close, at a Corporation restaurant in Oregon. He then drove home, got drowsy and fell asleep, killing himself and another driver. Mr Stein said that the facts did concern him. The hours worked were against the First Plaintiff's rules although they were not against the law of Oregon. It was highly unusual to work twelve hours in a seventeen hour period. He had never come across it.
It is convenient to take stock of the evidence of the Plaintiffs' employment practices and conditions which I have so far summarised, before going on to their complaints procedures, their attitudes towards trade unions and the question of safety, all of which to some extent depend on my assessment of the general working practices and conditions.
The evidence from the particular restaurants involved less than twenty U.K. restaurants, and even by the end of 1990 there were 380 McDonald's restaurants in the U.K. Moreover, most of the well-founded allegations related to some only of the particular restaurants.
Of course this may be the result of litigants in person being unable to find further witnesses, rather than lack of general application. On the other hand some of the defence witnesses were available because they had been found by others who have had legal brushes with the Plaintiffs. The Defendants have many supporters and the case has received a lot of publicity. On the other hand again, it would be understandable, or indeed to be expected, if people who may have been badly treated as McDonald's crew did not want to get involved or were just not interested enough to come forward. People do have lives outside this case, fortunately.
I will not speculate on whether more witnesses from more restaurants should have been available if the allegations had general application in McDonald's restaurants. I will just look at the evidence which I have. In my view the number of restaurants at which events or practices complained of have been shown to have occurred, is just too small for me to hold that the events or practices occurred widely in McDonald's restaurants unless the Plaintiffs' evidence provides some support for their wide occurrence or the McDonald's system of operation means that they are likely to be widespread.
I have referred to some of the Plaintiffs' evidence when dealing with specific restaurants, but quite apart from the witnesses whom the Plaintiffs called to answer specific allegations about the sixteen English restaurants to which I have just referred, the Plaintiffs called executives or senior managers to speak of their standards, general practices and policies so far as the employment of restaurant staff was concerned.
It was virtually common ground that the absolute requirement of fast service in the Plaintiffs' restaurants leads to hard, noisy and hectic work for significant parts of some shifts, the whole of the middle of Saturdays in all restaurants, and a lot of every day in some particularly busy restaurants. It is the same on both sides of the Atlantic. Mr Beavers said that the pace of work at McDonald's was fast certainly during parts of the day, and that it put great demands on the management and crew of a restaurant. Mr John Atherton who had been involved in restaurant operations at one level or another since 1982, said: "It is hard work at McDonald's. At rush times it is very intensive. You are occupied all the time." Ms Anteneh said that it was pretty hectic for most of the time at the Strand although that was not an ordinary restaurant.
In addition, in my view, there was sufficient evidence from the sample stores, albeit limited in number, when taken with the Plaintiffs' systems of scheduling and labour cost targets and with the risk of short payrolls, to make it likely that the normal pressures of the work have been intensified on a significant number of occasions in a significant number of stores, although it is impossible to be more precise than that.
I see no reason why things should be any different in the U.S. so far as this additional pressure is concerned. The Second Plaintiff uses the First Plaintiffs' essential systems.
So far as long hours per week were concerned there was evidence that there is and was, in this country and the U.S., a "policy" in the broadest sense of the word that full-time workers should not work more than 39 hours per week in the U.K.or 40 in the U.S.. If this policy was kept to, long weekly hours would not occur and the risk of long shifts for someone who was hoping to work five days a week to a maximum of 39 hours, would be limited. Part-timers would be unlikely to work long shifts because they were not working many hours a week.
However, it was difficult to discover what the reason for the 39 hour policy was in this country.
In the U.S. a time came when a Fair Labor Standards Act provided that employees should be paid for all hours worked and that crew and other hourly paid employees who worked more than 40 hours a week should be paid overtime. Employers were prohibited from working employees "off the clock". So the policy of generally not working crew for more than 40 hours a week made commercial sense, since it was cheaper to work someone else who would not be clocking up overtime.
In this country there was no such reason, by the Second Plaintiff's interpretation of the Wages Councils' orders, and no such reason at all once those orders ceased. But the 39 hour policy still applied, in theory at least. I can only speculate that it was a policy which was inherited from the U.S. company which had been working to U.S.statutory provisions, and that 39 hours was chosen as a maximum number of hours to be scheduled in any week because it left a small amount of slack before passing into the field of overtime rates.
However that may be, since it was not a policy with an obvious reason in this country, it clearly was not observed with any strictness at all in this country, and in my view it meant nothing in the face of practical demands for more hours' labour in the restaurants. In my judgment it has been quite common for full-time workers in the Second Plaintiffs' U.K. restaurants to work more than 39 hours a week, especially if they have wanted to.
Nevertheless, Mr Nicholson thought that it was extremely rare for crew members to work as much as 50 hours per week. Mr Stanton said that if crew were working those hours more people were needed on the payroll. There was nothing in the evidence from individual restaurants to which I have referred, including Colchester where Mr Alimi worked over 90 hours a fortnight on occasions when Mr Stanton was Area Supervisor, to contradict this. Indeed the reliable evidence from the specific restaurants makes it clear that it was unusual for anyone to work more than 45 hours a week. As often as not, weeks up to this length have been worked willingly because crew wanted to earn more money.
I would expect there to be less weeks over 40 hours in the U.S. because of the requirement to pay overtime rates there.
So far as very long shifts are concerned Mr Nicholson said that he had never heard of double shift working, which was not to say that it did not happen. He thought that it would be unproductive as you could not get as good a return on the second shift as you would with fresh crew members. Mr Stanton said much the same. If someone did work double shifts it was generally a student who wanted more money. It was never compulsory. It happened on rare occasions but it had to be avoided if at all possible.
In my view this evidence was a generally fair assessment of the situation. Double shifts would be less productive of efficient work. They have occurred on rare occasions when staff have been short, which should not happen, or someone has made a special plea for extra hours, which should not have been granted. There was evidence of very long shifts at Colchester, Heathrow, Sidcup and in the Midlands, for instance, but I believe that they were rare. Although they have sometimes been imposed on crew, they have often occurred where crew members wanted them because they wanted to earn more than standard shifts would provide at low rates of pay.
So far as long shifts short of double shifts were concerned, it was conceded that it was possible that crew were asked to stay on past the time for which they were scheduled and for which they wished to work, but it was said that any reasonable manager would do that sparingly. However, I am sure that unwarned and unwanted extensions of shifts have occurred on a significant number of occasions. I heard evidence of it happening at some of the particular restaurants, and in my view the scheduling system leads to a tendency for it to occur, quite apart from any shortage of staff on the payroll.
I accept the main thrust of the Plaintiffs' case that there is a real attraction in flexible scheduling so far as both employers and employees are concerned. If it is properly judged and applied it matches the interest of the employer who needs enough but not too many paid crew to meet anticipated custom and it suits the large numbers of the largely part-time work force who want to work limited hours at times which fit into the rest of their lives. This all makes good sense and means effective business management.
I accept, as equally good sense, that it is not in the Plaintiffs' interest for their restaurants to run shortstaffed because service and, therefore, custom is likely to suffer and it is hard on management as well as crew. I do not believe that anyone of any seniority in either Plaintiff company wants it to happen.
However, it was accepted that on occasions a store would not get its scheduling right. In my view, there are a number of risk areas so far as the Plaintiffs' scheduling system is concerned.
Firstly, it demands a skill and experience and unbiased judgment which the scheduling manager may not have. I regard this as the least important factor. There was little or no evidence of incompetence in scheduling. There was some evidence of biased scheduling, either to give preference or to punish, but I do not believe that it came anywhere near proving widespread malpractice.
Secondly, even competent and conscientious scheduling can go wrong because custom is greater than anticipated or crew members fail to show for whatever reason and substitutes cannot be summoned. When either or both of these events occur, there will be additional pressure on those who are on duty to work even harder and it may be necessary to ask crew to stay beyond the scheduled end of their shifts to help cope.
Thirdly, there must be a temptation for some scheduling managers to schedule as few crew as they feel the operation of the restaurant can cope with, and there must be a real risk that the general policy of staffing for good service will take second place to the more immediate pressure of keeping labour costs down to within targets which are seen as important, at least if the restaurant is not a runaway success so far as custom is concerned. This also must lead to an increased risk of finding the restaurant short-staffed and asking crew to stay on to help out. It is not how those who run the Second Plaintiff intend the labour cost targets to work, but it is inevitable that some managers and supervisors will become obsessed with the targets rather than taking the larger view, and there was evidence of this happening.
In addition, it is clear that there have been problems getting enough crew on the payroll in some restaurants, which must make it difficult to schedule enough crew at times.
I reject the evidence and argument that the deterrent to bad scheduling is that crew who are unhappy with it will not turn up. This no doubt happens in some cases, but generally speaking people will put up with quite a lot if they need the money badly enough or they are in a job of limited, anticipated duration.
Despite all this, the evidence was insufficient to satisfy me that crew have regularly been asked to stay on at the end of shifts for significant lengths of time as a matter of general practice. There was evidence that this happened at Colchester, Heathrow and Sutton, but the body of evidence of substantial, unwarned extensions leading to long shifts was too small for me to say that the practice has been widespread, even taking full account of what I see as the potential risks of the scheduling system. My conclusion is that there is a significant risk of it happening from time to time.
I would expect the position to be much the same in the U.S., but moderated by the need to avoid running into overtime if possible.
Mr Nicholson denied knowing of under eighteen year olds being clocked off at 10pm or midnight but then working on and being paid a bonus. I am sure it did happen. I think that it was probably inevitable in a minority of stores where there were not enough over eighteens on the payroll to avoid under eighteens being on the last shift and having to stay on to help clear up. But I do not find that Mr Nicholson knew. I think that his knowledge of everyday events in restaurants was limited because he did not come up from restaurant floor work and when he was at work in restaurants everyone must have known who he was. In my view senior operations managers with more experience of restaurant work than Mr Nicholson must have known what was happening and of the inevitability of it occurring from time to time.
Having said this I do not consider that the practice of under eighteens working after midnight form time to time in itself goes any significant way towards justifying the allegation that working conditions at the Second Plaintiff's restaurants are bad, although it does not reflect well on the Second Plaintiff. Most young people take the odd late night in their stride.
Very late closes, sometimes going on through the night, have occurred from time to time in the U.K. It is possible that they are a general feature of crew work at McDonald's because I was left with the strong feeling that it was important to Restaurant Managers and Area Supervisors to have everything absolutely at its best when there was to be a visit from higher management and I can see that the best way of achieving this in a restaurant which has been in full use the day before is to work through the night. However, I did not really have the evidence to conclude that this is generally so, and the reliable evidence was that very late or all night closes occurred only a few times a year; very few for any one crew member, save for the odd individual.
I would expect the position to be much the same in the U.S., but again moderated by the need to avoid running into overtime if possible.
I do consider that if the work in McDonald's restaurants is to be inevitably fast and furious for extended periods there should be proper breaks including drink breaks at reasonable intervals, yet on the evidence which I have heard about U.K. restaurants, breaks early or late in shifts, leading to long periods without a break, shortened breaks and undue restriction of drink breaks, have all been common to the point of being standard in the Second Plaintiffs' restaurants. There was convincing evidence of eccentric breaks and the whole system of quick service, close scheduling and the need to respond to customers' demands before all else, leads in my view to the risk that regular breaks of adequate length will go by the board. I can well accept that not all crew want their full entitlement to a long break somewhere around the middle of their shift, but crew work at McDonald's is obviously the kind of work where there should be no undue restriction on short breaks, like drink breaks, however great the custom. Enough crew should be scheduled to cope with that.
I would expect the same pressures to lead to the same situation in the U.S.
The complete reverse of all this is that custom may be less than expected in which circumstances the scheduling ethic that numbers of crew should match custom, and the importance of labour cost targets combine to produce the practice of asking people to go home and, on occasions, sending them home with or without some contrived reason, so that they lose the pay which they would otherwise earn. Mr Nicholson thought that it was rare to ask people to go home. He accepted that it was unacceptable and unfair. In my judgment it must have happened on a significant number of occasions, because it has a superficial attraction to managers who are sensitive of labour costs as the Plaintiffs expect them to be, and because it appears to be an acceptable part of the system despite Mr Nicholson's personal view. In my view it is a quite unconscionable practice. It is unrealistic to think that young crew really have any genuine free will in the matter.
There have been late Performance Reviews but the evidence falls short of showing that they have ever been widespread.
Docking pay to save labour costs has only been shown to have occurred at the Colchester restaurant.
I am sure that there have been many instances of autocratic management in such a large operation, with so many young managers having to impress their authority, often when working under the pressure of a need for fast service. There was evidence of a number of particular instances, but in my judgment the evidence falls far short of proving that autocratic management is a general characteristic of work in the Plaintiffs' restaurants.
The risk of autocratic management brings me to the questions of complaints procedures.
I never did understand why the Plaintiffs should want crew to be demoralised, as Mr Morris suggested, and there was a lot of evidence from the Plaintiffs' higher management witnesses to the effect that both companies wanted to know what crew thought in order that crew should be content and working well, and in order to improve its methods of operation, both locally in individual restaurants and on a wider front.
The Plaintiff called a lot of evidence to support their crew complaint and reporting and disciplinary procedures, with Mr Nicholson last in line in this country as the Second Plaintiff's Ombudsman, save that anyone could make his own approach to Mr Preston himself.
The procedures set out in the Second Plaintiff's 1989 Crew handbook of which every crew member should have a copy were as follows, under the heading "Communications":
About once every other month (or more frequently if necessary) your Manager will hold a Crew Meeting. These meetings are held to discuss policy, procedures, products and problems in the restaurant. You are required to attend and will be paid for your time.
Rap sessions are small, informal discussions between crew and a Company representative for the purpose of discussing ideas, suggestions and problems. The Session will be arranged periodically by the Restaurant Manager, or upon request from the crew. They are your opportunity to make your views known to the company and, again, you will be paid for attending.
You may from time to time have business related problems that cannot be solved through crew meetings, rap sessions, or one-to-one discussion with Management.
If you feel you have such a problem and have attempted to get it resolved through rap sessions and one-to-one discussions with your restaurant Management, feel free to discuss it with your Operations Supervisor. Your Restaurant Management team, in the interest of fair play, would want to do that. If, at the end of that discussion, you feel the need to further discuss the business related problem, please contact your Senior Supervisor, then your Operations Manager and then your Market Manager.
If there are any problems that you feel you cannot discuss with your Management you may contact the Personnel Manager, whose address is towards the end of this handbook. If the matter remains unresolved at that stage it can be referred to the Regional Manager/Vice President whose decision will be final.
Notice boards are located in your restaurant. These boards are used to post announcements or notices regarding safety, working conditions and other matters relating to your employment. Please do not put up notices or remove information without your Manager's permission. You should refer to your Notice Board frequently, as it is a very important means of communication.
Occasionally we may ask you to complete a confidential questionnaire relating to your work and the operation of the restaurant. Your answers will help us to improve our Management of the restaurant and conditions of employment.
McNews is a publication with news and views from McDonald's people. As one of those people your contribution to McNews will be welcomed and the Training Department will always be pleased to hear from you.
While doing your work, you may come up with ideas, better ways of doing things or constructive criticism. We welcome criticism and suggestions. They are very important to our success and our future. Please relay your suggestions to your Restaurant Manager or Operations Supervisor."
Mr Nicholson said that the company followed the system of Crew Meetings, Rap Sessions and Grievance Procedure, and it worked.
Managers tried to get people who wanted to represent the crew to attend Rap Sessions. Mr Nicholson did not think that managers decided who could attend.
Field Personnel Officers examined Rap Sessions notes and points raised were dealt with at Crew Meetings. If a matter could not be resolved it was brought to Mr Nicholson's attention.
Ms Meade who particularly impressed me as a candid and honest witness, trying to help, said that she had attended a couple of Rap Sessions as a crew member and a hundred or more in her Human Resources capacity. She thought that they were valuable. The people who conducted them and those who attended felt good afterwards, about the communication. After a Rap Session an action plan was formulated at a Crew Meeting. The plan gave details of what was going to be done in response to what had been said at the Rap Session. Management could be uncomfortable. If criticism involved the Store Manager, the Area Supervisor would need to be involved. Human Resources might get involved and there might be further training of the Manager.
Mr Stanton said that the idea of Rap Sessions was that the company got feed back, constructive criticism on every conceivable aspect of the job within the restaurant, on both the restaurant operations and the restaurant management team. The person taking the Session had pre-set topics to cover. He or she was a Supervisor from another Area, an impartial source who did not have a axe to grind or any feelings that he could not hear a full and frank discussion. In his experience Rap Sessions achieve that purpose. "The Rap Session is posted back up on the Notice board so if I do not record a true reflection of the discussion my credibility is finished and the credibility of the system".
Mr Stanton said that Rap Sessions lasted at least an hour and a half.
Mr Nicholson said that the Second Plaintiff tried not to be a "hire and fire" company.
Crew members were interviewed when they left the company. Attempts were made to compile a data bank of their reasons for leaving. Ms Meade was able to produce figures in relation to reasons for leaving, as a result.
The Rap Session system started in the U.S. The Communication section of the McOpCo (First Plaintiff's own U.S. stores) Crew Members Handbook has and had similar provisions to those which I have set out from the 1989 U.K. handbook. Mr Stein was asked: "Do you think that these provisions actually work in practice, rap sessions, crew meetings, opinion surveys and so on and so forth?"
Mr Stein said: "I do not mean to be flip, but we would not spend all the time and effort if they did not work. This is an organisation that only does things if, in fact, it makes a difference. It absolutely does work."
He said that it there was a dispute or problem it could go all the way up to him and it did. A crew member could pick up the phone and speak to him. "It has happened."
It was suggested to Mr Stein that a crew member who was dissatisfied with pay or conditions might be frightened for the manager. He replied : "I do not think you know American youth very well."
Franchised stores in general have Rap Sessions and Crew Meetings.
Mr Stein said that the First Plaintiff had a formal grievance procedure and a parallel disciplinary procedure.
All in all I was in no doubt that both Plaintiffs wanted Rap Sessions to work. I can see that if they do work they are a real benefit to the employer. I do not believe that they are all "a show" as Mr Morris suggested, although some crew clearly mistrust them. So far as the Plaintiff companies are concerned they are a genuine system for eliciting and dealing with crew grievances. Moreover, Rap Sessions notes which I saw did report forthright criticisms of management practices. There must, however, be McDonald's crew members who are unhappy about something or other, perceive Rap Sessions to be identified with an operational system which they see as being responsible for their problem and, not having any third party to go to within the McDonald's system, prefer leaving to complaining.
The question of crew safety at McDonald's took up a lot of time. It is relevant if it is shown that working for either Plaintiff has carried with it the risk of significant injury, thereby contributing to justification of the allegation of bad working conditions.
McDonald's kitchens, like all kitchens, have hot places so people will get burned from time to time. There will be spills, so people will slip or fall from time to time and if they fall or try to save themselves from falling by instinctively holding on to something hot they may burn themselves badly. The risk of serious cuts for crew in a McDonald's restaurant is limited by the fact that the components of McDonald's food products generally come ready cut, peeled and portioned.
Despite a risk of minor burns or slips in any working kitchen or restaurant I would not see the work as dangerous and carrying a serious risk of significant injury unless there was some particular feature to make it so. Some attack was made on McDonald's flooring, as I have said, and on failure to provide particular footwear, but I thought that this came to nothing. There was certainly evidence of faulty equipment which was not always promptly repaired, but the evidence of injury as a result was sparse. The real thrust of the Defendants' case was that the need for fast, hurried work and worship at the altar of "hustle" led to substantial risk.
As with other topics which were relevant to working conditions there was much more evidence about the U.K. than the U.S., although Mr Stein did say that Health and Safety was a shared responsibility between the First Plaintiff's Insurance Department, outside experts and "the operations people". There was no one with a specific responsibility solely for health and safety.
The Second Plaintiff did not have a Health and Safety Officer until Ms Gill Barnes took that post in July,1990. Until then Health and Safety was an integral part of the Personnel Department. It was part of the training of managers. A Health and Safety Task Force was set up in about 1988. It included people from the Personnel Department and from other departments which had an interest in safety. The role of the Task Force was mainly to look into serious accidents and to see what could be learned and to communicate with restaurants if changes needed to be made.
Just before Ms Barnes was appointed, E.C. driven regulations like the Electricity at Work Regulations, 1990, to which I have already referred, came out. Their basis was risk assessment and they changed the way that safety was managed in the U.K. It was obvious that more regulations were to come. That was the stimulus for Ms Barnes' appointment. Ms Barnes had three regional officers under her in London, the Midlands and the North.
Restaurant Safety Circles, groups of eight or nine hourly paid employees headed by one of the restaurant's management team, were formed in mid to late 1992.
In late 1992, Mr Andrew Taylor, the Second Plaintiff's Chief Operations Officer and a main board member, took responsibility for Health and Safety.
Safety has always been an item on the agenda for Rap Sessions.
Ms Barnes said that there were three reasons why the company should seek to achieve excellence in safety management. Firstly, there was a moral reason in terms of the safety and well being of employees; secondly, there were cost implications; and, thirdly, there were legal requirements. There was no conflict between any of the three. They all worked together.
Ms Barnes said that in the real world you were not going to prevent all accidents completely. McDonald's aim was to prevent the more serious accidents with a knock-on effect of preventing some of the minor ones.
In August,1992, the Accident Prevention Advisory Unit (APAU) of the Health and Safety Executive (HSE) produced a report on "The Management of Occupational Health and Safety in McDonald's Restaurants Limited". It was prepared with the Second Plaintiff's full and voluntary cooperation following site visits and interviews with managers and other employees between December,1991, and April,1992.
The Summary of the report said that:
"McDonald's, a dynamic company with committed and enthusiastic managers, takes health and safety seriously. It sees itself as having a main obligation to make work as safe as it can, accepting that there is an ever changing environment. It sets high standards for buildings and equipment, audits the performance of its restaurants against Company standards and views the development of its people as very important.
The company, through its Health and Safety Officer and Health and Safety Task Force has had some success in developing new procedures and raising the level of awareness of health and safety. However, there is no company health and safety strategy, plan or programme which had been legitimised by agreement at either an executive managers meeting or regional managers meeting. Consequently health and safety goals and objectives had not been set by regions and were not being included with other business objectives in performance appraisals of manages in Operations.
The Company's commitment to achieving good standards of health and safety performance was not as clearly expressed as, for example, its commitment to quality, service, cleanliness and value. These are considered the cornerstones of McDonald's business but the example of how "hustle" was interpreted demonstrates that health and safety were considered as secondary in the provision of a "quality service".
McDonald's is a company which sets standards and has comprehensive systems for monitoring compliance and auditing internally. Some existing standards for controlling require revision and some new ones are needed. Whilst McDonald's has the capacity to develop new standards for health and safety, and the management framework to implement them, it needs to improve the awareness of health and safety standards amongst managers in the restaurants and the accountability of all managers for health and safety performance".
The report noted that: "McDonald's was chosen as a candidate for a central approach because issues identified by Environmental Health Officers during routine visits to local restaurants were perceived as having "national" implications. Examination of the reported injury records for the take-away catering sector showed that a large proportion were reported by McDonald's, though this was undoubtedly due to general under-reporting in the sector".
Crew as well as managers were interviewed during the site visits to establish what actually happened in practice.
The essential criticisms made in the report were as follows.
There was no message to individual managers that achieving good health and safety performance ranked equally with other activities. The key responsibility of Regional Managers for safety in their regions was not mentioned.
No Board director had lead responsibility for safety at the time of the report. It was dealt with in a reactive way at Board level.
Managers' accountability seemed to be questioned only when a serious failure occurred. The emphasis was on negative feedback at all management levels.
There were no safety committees or safety representatives at the time of the report, and no collective trade union membership. The report did say that Rap Sessions referred to health and safety and that crew members appeared to be encouraged to criticise procedures or managers constructively.
Health and safety memos were not always easily recognisable and were generally not filed systematically.
The report devoted a number of paragraphs to "hustle", stating:
""Hustle" is a term used universally in all McDonald's restaurants, being recognised by all but the newest crew members. It provides a good illustration of the culture in the Company and the importance of good communication in the organisation. Its application had resulted in a conflict between operational requirements and safety, where the need to get the product to the customer and to maximise sales in competition with other stores had taken precedence.......
One manager, referring to the need to meet sales targets, commented that he would not be in a job if he "stopped people slipping because of speed". Another, interviewed sitting beneath a display screen of the front counter showing crew running and dodging whilst assembling orders, confidently advised that crew did not run or slide and would be stopped. A "licence to be dangerous if not controlled" was how another manager described it. The application of McDonald's hustle policy in many restaurants was in effect putting the service of the customer before the safety of employees".
The report referred to the re-defining of hustle, since the programme of visits and interviews for the report, as "efficiency gained from the safe and proper use of the three Cs, i.e. communication, co-operation and co-ordination", and counsel for the Plaintiffs relied on this to argue that "hustle" no longer led to any risk from speedy working, if it ever had done so.
I have already indicated that in my view, whatever the definition, if someone said "lets have more hustle" to a crew member, and especially if it was shouted, I would still expect him to interpret it as "get a move on", however much he had been taught its new, artificial definition. McDonald's is clearly unable to let go of "hustle" as part of its ethos.
The report was complimentary about training but it said that there was a need to improve health and safety awareness at all levels of management and that this could be done by specific training sessions.
It said that the company had made considerable improvement in its organisation of health and safety in the last two or three years which would, of course, be mostly since Ms Barnes' appointment and mostly since the relevant publication of the leaflet.
The report referred to the need for adequate breaks between shifts and maximum hours of work for crew and to the fact that some of the audit reports highlighted inadequate breaks.
There were areas where written performance standards did not exist or were not expressed as performance standards. There was no written health and safety checklist, with associated guidance for Restaurant Managers.
The report concluded by making a number of recommendations, and after the investigation and report Ms Barnes prepared her own report and list of recommendations which were put into effect.
Counsel for the Plaintiffs rightly pointed out that the report was not in itself admissible to prove the truth of its contents, but Ms Barnes thought that the report was a fair and well-balanced report and she said that senior management did as well, so I can treat it as adopted by the Second Plaintiff, in my view. Ms Barnes said that the report was "warts and all". If it had not pointed out some of the weaknesses it would not have been as much use as it turned out to be. In every case it was comparing the company against the new, and what seem to me to be rightly high, standards of the HSE report on "Successful Health and Safety Management" which had only been published at the end of 1991.
The Defendants took the APAU report to be a damning comment on the Second Plaintiffs' attitude to crew safety, but I did not read it in that way. Although its main purpose was to look at the management of occupational health and safety, and it found fault there by the high standards which it set, the reporting team did investigate practices in the restaurants and it is difficult to believe that it would not have pointed out those which might lead to some special risk. The only two matters which the report specifically drew attention to were that protective workwear was not always worn for filtering and disposing of hot shortening and that "hustle" tended to involve running, dodging and sliding when assembling orders behind the front counter.
I take into account the fact that the Second Plaintiff had made a number of advances in the field of health and safety between the time of relevant publication of the leaflet and the APAU report, for example, only, Ms Barnes' appointment, the more intensive instruction of an independent Safety Consultant, Mr Christopher Purslow whom they had first gone to in 1986, restructuring of the Task Force, improved training on safety matters, collecting of statistics and improvement of investigation systems, and a generally more proactive attitude by management to safety in restaurants. But even taking account of all the recent improvements when turning the clock back from the APAU report to the date of relevant publication of the leaflet, I certainly cannot say that the Second Plaintiff had little regard for safety. In any event giving full weight to all the ways in which there was room for improvement in the Second Plaintiff's management and supervisory systems so far as crew safety is concerned, I still have to ask whether there was any significant risk in fact.
I have referred to some accidents when summarising some of the evidence in relation to particular stores. Slight burns were fairly common, cuts seemed less common. Serious injuries, including falls leading to serious injury, were rare.
A number of witnesses spoke of the limited number of burns, even, which they suffered. Ms Meade thought that in her seven years working part-time during term and thirty-five or so hours a week during holidays and a gap year, working in all parts of restaurants, she had one or two minor burns. Mr Sexton said that the accidents which he witnessed were mainly just minor cuts, bruises or burns. He did not recall an accident serious enough to be notifiable by statute in any of the restaurants he worked in. Mr Stanton said that he may have burned a finger removing buns from a toaster when he first started work. Once it happened you did not do it again. He did not feel at all at risk when working as crew.
The Colchester Accident Book revealed 176 recorded accidents over the period from September,1984, to December,1992; 64 burns including one from an electric shock, 57 cuts, 34 bruises, 19 sprains mostly to wrist or back, and 2 more electric shocks. That worked out at less than two recorded accidents a month, but Ms Barnes whom I thought to be a very fair and conscientious woman said that she would expect about two accidents a week, 8 a month or 100 per annum, to be recorded in a restaurant with 50 to 80 crew, if managers were being really diligent about recording. Mr Atherton agreed. That would mean two accidents or less per crew member per year.
Accidents which are notifiable under the Reporting of Injuries, Diseases and Dangerous Occurrences Regulations, 1985, are known as RIDDOR accidents. They include certain fractures, amputations, eye injuries, certain injuries from electric shocks, injuries which involve hospital in-patient treatment for more than twenty-four hours or more than three consecutive days off sick, and fatal accidents.
Information gathered by Ms Barnes after her appointment showed 335 Riddor Accidents to McDonald's crew in the U.K. in 1991, 344 in 1992, 400 in 1993 which rise Ms Barnes attributed to her improving the reporting rate, and 386 in 1994. The estimated reporting rate was 80 to 90%. 40% of the accidents took place in the kitchen. The figures meant that there was about one RIDDOR accident per year per store and about one for every 100 recorded in the Accident Book.
Mr Purslow thought that a ratio of one notifiable accident to one hundred minor ones was comparatively low.
The numbers of reported accidents for 1991 to 1994 did not give Mr Purslow any anxiety for a business the size of the Second Plaintiff's business with the numbers of people whom it employed.
Mr Purslow gave evidence that in his view the Second Plaintiff's training was very effective. It was task-based and the fact that so much of the work followed a standard procedure was in itself a safety measure. He thought that the level of higher supervision was about right. If there were more frequent checks, restaurant management might leave safety to the supervisors rather than accepting responsibility for it themselves.
HSE and Health and Safety Commission statistics tended to show that the risk of significant injury in the fast food, hotel and catering industry was small although there was a difficulty with the figures because of the poor reporting level.
There was little or no evidence of actual injuries from running or "hustle" and this was probably because there was little or no evidence of running or skipping in the kitchens as opposed to running or skipping on the front counter, in my view.
There were no satisfactory statistics of numbers of accidents in U.S. stores. The figures which were produced were numbers of compensation claims rather than numbers of accidents. However, the work is the same, done in essentially the same way, and safety and risk levels are likely to be much the same in the U.K. and the U.S.
I take into account the pressure of work at some times at least, and most of the time in some restaurants, and the occasional long hours which must lead to tired crew at times, but in my judgment none of the evidence put before me comes anywhere near proving that crew work in the Plaintiffs' restaurants is unsafe or dangerous. It is not. The risk of significant injury is negligible.
McDonald's attitude to unionisation had a direct relevance to the allegation in the leaflet that the Plaintiffs have a policy of getting rid of pro-union workers. It also had some indirect relevance in that the Defendants suggested that pay and conditions would be better if all McDonald's crew members had collective representation by a union, and that they were bad because they did not.
The Defendants' case was that both Plaintiffs were opposed to unionisation of any part of McDonald's workforce at any cost, legal or otherwise; that by sacking or discrimination of one kind or another they got rid of pro-union workers, and that pay and working conditions suffered as a result.
In an attempt to establish their case, they called evidence of events at or relating to nine of the Second Plaintiffs stores in this country and of events in the U.S.A., Canada and Ireland and a number of other countries all of which fell under the ultimate influence of the First Plaintiff. They also cross-examined Mr Stein at great length about alleged events of which they did not have admissible evidence. This generally proved unproductive. In so far as it proved counterproductive, they argued that Mr Stein's answers elicited in cross-examination were inadmissible as hearsay.
I had written evidence from Mr Dan Gallin who is the General Secretary of the International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers Association (IUF). The IUF is a world-wide federation of trade unions which represents workers employed in hotels and employed in the tobacco industry. One of its functions is the co-ordination and representation of its national, affiliated unions when they are engaged in disputes with multi-national corporations.
The IUF publishes news bulletins and reports of labour disputes around the world and many of the Defendants' allegations in relation to McDonald's employment practices, particularly with regard to unions or union activities were based on these. The bulletins and reports were not admissible as evidence and I cannot rely on them for proof of the matters alleged in them so far as the Plaintiffs are concerned.
However, there was no reason to doubt Mr Gallin's statement that over the years a number of the IUF's member unions were involved in disputes with the First Plaintiff or its national subsidiaries and that as a result the IUF Hotel, Restaurant and Catering Trade Group convened an international McDonald's Trade Union Working Group of national delegates in November,1984, in order to further the recruitment and representation of McDonald's employees.
The Plaintiffs' case was that so far as McOpCo restaurants in the U.S. and restaurants in this country were concerned, they would rather do without unions because they would rather run their businesses themselves and their employees did not need union representation anyway. There had been little crew interest in unions. Any crew member was entitled to join a union although neither company would negotiate with that union unless compelled by law to do so. But they would always observe the law and neither company would countenance the sacking or constructive dismissal of crew members for union activities. With regard to franchised restaurants around the world the First Plaintiff's position it was said, was essentially one of neutrality in an advisory role. Operators were largely autonomous and attitudes varied from country to country according to local conditions, both legal and cultural, which the First Plaintiff was happy to abide with.
I will take the evidence in relation to the U.K. first.
Mr Whittle said that when he was interviewed for his job at Sutton in 1983, he was told that McDonald's did not recognise trade unions because they were not needed.
A number of crew including Mr Whittle felt that the pay was so low and the conditions were so bad that they should join a union. Although they tried to keep their discussions about joining a union quiet, management became aware of them because of the atmosphere in the restaurant and within a few weeks all of those concerned save Mr Whittle had been sacked for trivial reasons. He did not give any reason why he should not be dismissed, since it appeared that management knew that he was involved, and I am not satisfied that the others were dismissed for union activities. In any event there was no evidence that anyone in higher management knew what was going on.
Mr Cranna who worked at West Ealing said that any crew member who tried to recruit others to a union would most likely find his employment short-lived, but he did not have actual experience of that happening. It was just a feeling that McDonald's and unions were not natural bedfellows.
Mr Gibney said that soon after the Colchester restaurant opened, the crew room was locked by management because they thought that it was too untidy. A number of crew members light-heatedly formed the "McDonald's Freedom Fighters" to protest. The only thing which he said about unionisation was that he heard a rumour from various managers that McDonald's did not like unions and that when an unidentified restaurant tried to start a union the restaurant was closed and staff were brought in from another restaurant to open it.
Mr Alimi was told by Mr Gibney that anyone who joined a union would be sacked. He said that one employee at Colchester, Mr Paul Jackson, was sacked because he was known to want to form a union amongst the crew members but his information appeared to come from Mr Gibney who referred to Mr Jackson being a member of the McDonald's Freedom Fighters, which had nothing to do with unions at all according to Mr Gibney. Later he said that he did not himself know much about Paul Jackson's dismissal. He was picked on and sent home because of his dirty or greasy uniform and long hair.
Mr Alimi said that he spoke of joining a union to see what would happen and the First Assistant Manager Ms Trudy Jones said: "We don't want anyone talking about unions in this place." On one occasion he asked Mr Harney why people at McDonald's could not join a union, and he was told that it was because people at McDonald's "had flexible skills" and were required to work at whatever duties managers gave.
He brought the question of a union up in the crew room but people were afraid.
Mr Alami said that he heard a rumour about McDonald's closing a store and dismissing the staff because they formed a union. He heard it from his sister who worked in the Woolwich McDonald's.
I heard about this rumour from other witnesses. It is false but the Defendants suggested that the Second Plaintiff was happy for it to spread around to keep crew quiet. That was a long shot by the Defendants in my view. I have no basis for finding that anyone of any authority in the company encouraged it.
Mr Coton said that it was an unwritten rule that the company did not want any union activity. The McDonald's Freedom Fighters started as a joke but the company took it very seriously and Mr Coton was told to sack some of those involved under the pretext that they were a disruptive influence. He sacked Paul Jackson but later rehired him. It was Frank Stanton who took it seriously.
Mr Shafibeik said that he was one of the crew who formed the McDonald's Freedom Fighters. Mark Davis who was then Assistant Manager said that it must stop. If Mr Davis was Assistant Manager it was before Mr Coton became even Trainee Manager and before Mr Stanton arrived on the scene. Although Mr Shafibeik was involved with the McDonald's Freedom Fighters he left of his own accord but was taken back when he wanted to return later.
Mr Davis said that the McDonald's Freedom Fighters grew as a joke after some skinheads attacked the restaurant one night. The irony was that the leaders of the McDonald's Freedom Fighters had run off into the kitchen at the time.
The McDonald's Freedom Fighters did not seem to have anything to do with unionisation to me, whatever their true origins, and I do not believe that Mr Jackson was sacked or forced out for union activity.
Mr Magill's statement said that no one ever mentioned a trade union while he was at Marble Arch. "The foreign employees were not interested in anything like unions. They just wanted to work. Other employees were not interested either. Unions were just not an issue which seemed at all relevant to anybody at McDonald's."
Lynval at Kentish Town said that the Second Plaintiff was "totally anti-union", and that "if you wanted to start a union, they'll hear about it and they'll sack you". However, there can be no sensible suggestion that Lynval was speaking for the company when he said that, so it could not be an admission by the company. It was an expression of his own opinion which appears to have been based on the false rumour to which I have referred.
The only evidence of real interest in union organisation at McDonald's restaurants in this country related to Hackney in 1985, East Ham in 1987 and Liverpool in 1988, all of which merited Mr Nicholson attending crew meetings as Head of Personnel, and Seven Sisters Road in 1987. Mr Nicholson also had an approach from a union about Warren Street. Mr Nicholson said that he went to three meetings at Hackney, East Ham and Liverpool because he wanted to, because he happened to take calls from the restaurant about them, and because he took every opportunity to visit individual stores. Hackney and East Ham were near Mr Nicholson's office but Liverpool required "an excursion".
No one else attended crew meetings to do with union membership so far as he was aware and he thought that he would have known if there had been widespread interest in union membership although he would not know if the issue came up in individual stores.
Mr Nicholson said that he visited Hackney because the manager telephoned him to say that some of the crew people wanted to talk to him about union representation. He went to Hackney accompanied by Mr Ron Lorrie who was the security manager for the area. He had asked Mr Lorrie where he should park and Mr Lorrie said that he would show him as he was going there on business himself. He did not think that Mr Lorrie had attended the crew meeting. Mr Lorrie had been in his job some time and he would have been known to the crew. He was responsible for the physical security of the stores in his area, fire prevention, and the elimination of any criminal activity by staff.
At the time of the meeting Mr Nicholson thought that the crew at Hackney was 80 to 100 strong although only eight or nine attended the meeting. He told those at the meeting that the company's position was that they were welcome to join a union if they wanted to and that McDonald's could not stop them from joining a union. It was their right to join one. But the company would not be prepared to negotiate wages or conditions of service with that union. It preferred to deal with the crew direct. According to Mr Nicholson: "The meeting was very light-hearted. Of the eight or nine people there I think perhaps two were really serious in their intention and the rest laughed it off eventually. The meeting lasted about forty-five minutes, hardly that."
Mr Nicholson said that he visited restaurants regularly and attended crew meetings and rap sessions and he hoped that no one was intimidated by his meetings at Hackney, East Ham and Liverpool. It never occurred to him that arriving at the Hackney store with the area security manager who was responsible of the elimination of criminal activity might create the wrong impression. I am prepared to accept that this was Mr Nicholson's view, but the joint arrival of Mr Nicholson and Mr Lorrie must have left the crew in no doubt that the company did not welcome the idea of unionisation. To be fair to Mr Nicholson, he told them that anyway.
Mr Nicholson said that no one at Hackney was sacked over any question of union membership. He said that he knew nothing about any request for a union official to meet staff at Hackney. Mr Philip Pearson of the T.G.W.U. said that he was refused leave to meet staff there in their break times but it appears that he only asked local management.
The union interest at East Ham started with Mr Sutcliffe, to whom I have already referred.
Mr Sutcliffe told me that because of what he saw as unfair practices relating to promotions, pay rises and some managers' treatment of staff, he and some other crew members talked about joining the TGWU. About six to ten were interested but some left soon after the discussion and only Mr Sutcliffe actually joined the union.
They kept matters quiet because they feared for their jobs if membership of a union became known. This was partly because a Floor Manager told them that McDonald's did not like unions, and they did not know whether this was friendly advice or a warning of the company's position.
Mr Sutcliffe said that the crew members who were interested in joining a union were people who had particular problems with management and they left McDonald's soon after the problems arose. The tendency of people to leave was a difficulty in the way of forming a branch of the union at McDonald's in East Ham. In my view Mr Sutcliffe's comment hit the nail on the head. Many people who work as crew at McDonald's are young with ambitions elsewhere or at least without any ambition to stay and work their way up at McDonald's. If they run into difficulties at work the easiest solution is to leave.
Mr Dave Sexton was a Floor Manager or Second Assistant Manager at East Ham at the time. He remembered Peter Sutcliffe as someone who was always talking about trades unions but who attracted little support for them that Mr Sexton could recollect. There were about 60 to 70 crew in 1986, and Mr Sexton could not recall any significant move for unionisation. As far as Mr Sexton was concerned East Ham was a happy place although Mr Sutcliffe complained about conditions. He was not aware of any antipathy to trade unions on McDonald's part. Mr Sexton had no interest in trade unions himself.
Mr Sutcliffe doubted that he spoke to Mr Sexton or in his presence about trades unions, but Mr Sexton seemed an honest witness too. I think the difference of recollection between them arises from the passage of time and their different perceptions; one a young man who did not really like the McDonald's system; the other a young man who was making a career with the company.
I think that Mr Sutcliffe must have spoken about unions less guardedly than he recalls because Mr Nicholson told me that he received a telephone call from the East Ham Manager or one of his assistant managers who said that he had been approached by some members of crew who wanted to join a trade union. He said that Mr Sutcliffe was one of the crew concerned and that his father was an official in the TGWU. In fact I accept Peter Sutcliffe's evidence that his father was not a member of the TGWU and that he has never been a union official although he has belonged to unions appropriate to his work.
Mr Nicholson told me that he went to the East Ham restaurant. His account of matters was that he had a meeting with between ten and twelve crew. He told them that the company's position was that they were welcome to join a union if they wished. It was their right to do so and the company could not stop them doing so. But the company would not be prepared to negotiate wages or conditions of service with a union even if everyone in a particular store joined one, as it preferred to deal with crew direct.
Again, as with Hackney, Mr Nicholson said that the meeting was quite light hearted. It lasted about an hour. Mr Nicholson at first said that he did not get the feeling that anyone there was really seriously considering joining a trade union. Later, however he said that there were one or two persistent questioners who asked why McDonald's would not take union membership seriously and let them have a union representative. Nevertheless it was a very easy meeting for him.
I accept Mr Sutcliffe's evidence that he knew and was told nothing of the visit by Mr Nicholson. He seemed to doubt that a meeting with Head of Personnel about unions could have taken place without him knowing. I do not think that Mr Nicholson has invented a meeting at East Ham. The only inference I can draw from Mr Sutcliffe's absence is that the restaurant management, not including Mr Sexton who could not recall the meeting either but had to think back many years when he was first asked about it, thought it better that the person stirring union interest, namely Mr Sutcliffe, should not be present to question what Mr Nicholson said. It was probably held on a day when he was off duty.
The idea of unionisation at East Ham went no further.
Mr Nicholson's account of the Liverpool meeting was that he was called by the Regional Manager who said that he had been told by the Store Manager that crew had asked to be allowed to join a union. The Regional Manager was going to address a meeting of crew on Grand National Saturday afternoon when the store would be quiet. He asked Mr Nicholson if he would go up to Liverpool in case he wanted some support from him. Mr Nicholson went north, visited four or five stores while he was up there and attended the meeting. About 25 to 30 crew attended the meeting. Mr Nicholson took no active part in it apart from explaining at the start what the company's attitude was and why it preferred to deal direct with crew, in the same way as he had at Hackney and East Ham. The Store Manager and Supervisor addressed the meeting.
At the end of the meeting the Store Manager asked how many wanted to consider joining a union now that they had heard what the company's policy was. About three crew members put their hands up.
Mr Nicholson said that there did not seem to be a lot of interest in joining a union. Crew did not speak up or participate actively.
Mr Nicholson did not think that crew at the meeting might feel intimidated by the presence of the Head of Personnel, Regional Manager, Supervisor and Store Manager. Whether they were intimidated or not, I am sure that it helped them to get the message that union membership was not welcome.
Mr McGee who was a union member, gave evidence that union leaflets were taken from his locker by management at Seven Sisters in an attempt to prevent unionisation.
Mr McGee got involved with the Transport and General workers Union (TGWU) after he had been working for McDonald's for about six months which must have been only two months before he left and left the Seven Sisters Road restaurant.
He became involved after meeting Mr Philip Pearson, a union officer. He approached 30 to 40 fellow crew members, most of whom were interested in joining the union. However, according to Mr McGee they feared the sack if management got to know.
Mr McGee's thesis was that management were "trained to sack union members in a way which made it impossible for the employee to accuse them of doing it for union reasons". The sole basis for this evidence appeared to be that there were rumours to that effect which management knew of but did not seek to dispel. Such rumours are a completely inadequate basis for the inference which he drew, in my judgment.
Mr McGee alleged that his efforts to recruit other crew members to the union came to an end when he returned to the store after a week's absence to discover that someone had removed the padlock with which he had secured his locker in the crew room and removed from it all his union membership forms and literature. Mr McGee's account of matters was that Mr Giardina, the Store Manager, said that he had removed the padlock from Mr McGee's locker because the company rule was that lockers were only meant to be used by crew members for the duration of their shifts. They were meant to empty their lockers at the end of their shifts. No crew member was to keep a locker after he left the store. Mr McGee accepted that this was so, but he says that everyone had their own padlocked locker. Mr Giardina denied knowing what might have been inside the Mr McGee's locker. Later he told Mr McGee that he presumed that his locker had been broken into by another crew member. This did not make sense to Mr McGee because the only items of value in his locker, a pair of shoes, had been left undisturbed. Mr Giardina asked Mr McGee: "What of any interest to me would be in your locker"? I take it that the inference was that Mr Giardina well knew the answer to the question. Mr McGee informed the police and Mr Pearson but nothing happened. He said that Mr Pearson was very ineffectual. Later when Mr McGee accused Mr Giardina of lying, he was told, "if you don't like it, you can get out". Mr McGee resigned a few days later because of the locker incident. Also his college course was about to finish, and he was unhappy with the way in which the managers generally were treating him.
Mr Pearson confirmed that in about June,1987, Mr McGee joined the union and Mr Pearson provided him with TGWU recruiting leaflets; but Mr Pearson's evidence did not help me about the events and conditions at the Seven Sister's store, helpful although I found him in some respects on general issues relating to the union and McDonald's. He accepted Mr McGee's account of events uncritically and was rather over-emotional about what he saw as unfair treatment of Mr McGee by McDonald's and his own inability to help him.
I do not find the factual issue between Mr Mcgee and Mr Giardina easy to resolve. On mere balance I believe that Mr Gardina did take union literature from Mr Mcgee's locker because he thought that his employer would not like anyone drumming up interest.
Mr Nicholson told me that he remembered a telephone call from someone at the TGWU about Warren Street. In my view it was probably a call from Mr Pearson and it may have been in 1987 or 1988. He wanted to distribute literature to crew members at Warren Street. Mr Nicholson told him that he could not stop him distributing literature outside the store as long as he did not obstruct the entrance, but he would not allow him to go into the store to distribute literature. The caller asked Mr Nicholson if he could address the crew during their breaks. Mr Nicholson said that he could not, because the breaks were given for rest and refreshment. The caller accepted the situation.
The call about Warren Street was the only approach he had from a Trade Union in all his years in personnel department. There might have been approaches at local level, which he did not know about, but he thought that any serious approach would come to him.
All in all I think that there has been very little interest shown by McDonald's crew in union membership and representation in the U.K. Mr Dave Turnbull, a TGWU officer, said that his union often got enquiries from McDonald's staff, but he could not say how many were members of the union.
In my judgment there are various reasons why few McDonald's crew are interested in union representation.
Any union trying to stimulate interest in membership faces formidable difficulties. As Mr Turnbull said, only 10% of the catering industry workforce are union members, and there is difficulty in gaining access to the rest because employers in the industry often refuse. In addition, as Mr Pearson said, the high proportion of part-time staff at McDonald's makes it difficult to maintain regular contact with crew who are interested in joining a union. Mr Pearson estimated that only 10% of fast food staff had worked in the same place for as long as two years. He said that the high turnover of labour at the Second Plaintiff's restaurants made it difficult to recruit and retain and represent union members. In addition, as Mr Pearson said, McDonald's has a high percentage of workers under twenty-one, including large numbers of students, who do not expect to stay long and who are unlikely to have a trade union background.
Quite apart from this, I am satisfied that in one way or another crew members have came to appreciate that unions are not welcome at McDonald's and that there is little chance of persuading the Second Plaintiff, powerful and determined as it is and with its workforce spread around so many restaurants, to enter into discussions with the representatives of any union which they may join.
I am satisfied that in December,1986, Mr Nicholson told Mr Terry Pattinson, then the Industrial Editor of the Daily Mirror: "We do not have an anti-union policy. But we will never negotiate wages and conditions with a union and we discourage our staff from joining".
Mr Nicholson said that he had never said that to anybody although he had once told a radio reporter that the Second Plaintiff's position regarding unions was that "we prefer to negotiate with our people direct and we dislike the idea of third party intervention". Mr Pattinson told me that he telephoned Mr Nicholson at his home. They had a short, friendly conversation. He would have taken a note at the time and he put the words which I have related above in his subsequent, short article because they were Mr Nicholson's exact words. Both Mr Nicholson and Mr Pattinson are honest men, but I prefer Mr Pattinson's positive account in this instance. I see no reason to doubt that he followed his usual practice of taking a note. I do not think that the conversation held any particular significance for Mr Nicholson. He has forgotten that it ever took place. What he said to Mr Pattinson is not a lot different to what he told me.
When giving evidence Mr Preston said that there was no policy of preventing unionisation by getting rid of pro-union workers. He repeatedly said that McDonald's employees had the right if they wanted to join a union they should go on and do so, but that did not mean that McDonald's would recognise the union. "They can join anything they wish. My negotiation with a third party is quite another question. I think we should separate the two." But Mr Preston did not know if McDonald's employees were members of unions and it might be thought that there was little point in a crew member joining a union if the company would not then have anything to do with the union which he had chosen.
In May,1990, Mr Pattinson was one of a number of journalists who were invited to go to Moscow as the guests of McDonald's who had just opened a store there. He gave evidence that during the trip he had a conversation with Mr Preston. He told him that he could not see why he was keeping unions out of his company. Mr Preston said that they had no need of them. That was their culture and always had been. Mr Pattinson also told Mr Preston that he was amazed that crew working for McDonald's could be so happy when they were so lowly paid. Mr Preston said that McDonald's practice worldwide was to pay whatever the going rate was. He said words to the effect that young people were an inexhaustible supply of labour worldwide. McDonald's gave a lot of people their first step on the road to employment and Mr Preston thought that they were doing a public service.
In my view that conversation which I accept, reflected Mr Preston's view of the matter. The inexhaustible supply of young people has enabled McDonald's to stand firm against those few who have been interested in union representation, at least in the U.S. and U.K. I believe that those U.K. crew who were interested in unions knew what the culture was.
Nevertheless there was no reliable evidence that any employee of the Second Plaintiff has been dismissed or forced out of his job for union membership, interest or activities, and certainly no evidence that it was the Second Plaintiff's policy to achieve this.
Moreover there was little evidence from which I could conclude that rates of pay or working conditions would be any better for the Second Plaintiff's hourly paid crew who had union representation save, perhaps, in respect of someone to intercede in disciplinary proceedings or real difficulties with management in a particular restaurant.
Mr Nicholson said that conditions in this country were roughly the same as in other countries some of which had trade union agreements with the national McDonald's operator. Mr Turnbull said that from his experience with hotels which did recognise his union, McDonald's crew would benefit from union representation. He could not necessarily claim that wages would be higher but turnover would be lower because they could sit down and work through difficulties and changes. Mr Pattinson thought that crew would gain from union representation. Mr Morris argued that crew would gain from union representation in a number of ways.
I do not accept this when so many crew only go to McDonald's for temporary and part-time work and the Second Plaintiff is so clearly resolute in its determination not to negotiate terms of employment with any union. It was TGWU policy to establish local bargaining in various different hotels owned by companies with whom the union has an agreement. I cannot really see local agreements being achievable within the McDonald's system with its insistence on nationwide uniformity. The fragmentation would only put the Second Plaintiff in a stronger position to resist union attempts to negotiate.
Mr Morris laid considerable stress on the contents of the Second Plaintiff's Crew Handbook which gave as an example of "gross misconduct resulting in dismissal:
Mr Nicholson said that the provision would include making statements to trade unions but it was not geared to trade union. It would certainly cover speaking to newspapers about conditions at McDonald's.
Some "Basic Guidelines and Responsibilities" in the Handbook provided, among other matters, that crew were not to post may notice on the Company section of the notice board, could not seek subscriptions or distribute literature in the restaurant, and could not use the restaurant for outside interests.
Mr Nicholson agreed that all this meant that if a crew member was a member of a union, or wanted to be, he or she would not be allowed to collect subscriptions in the store, or put up notices on the notice board, or organise meetings in the store without management being present.
Mr Morris argued that all this showed not just that the Second Plaintiff was resistant to union activity but that it would sack anyone who spoke to a union about conditions in a store.
However, there was absolutely no evidence that the Second Plaintiff had ever used the provisions of the Handbook in that way. The provisions have a number of purposes, useful to the Second Plaintiff, which have nothing to do with unions and they do not mean to me that the Second Plaintiff has a policy of preventing unionisation by getting rid of pro-union workers.
In my view the Second Plaintiff has never had a policy of preventing unionisation by getting rid of pro-union workers. It is a law-abiding company, but in any event it has never needed such a policy to avoid unionisation and set its own terms. With its inexhaustible supply of mostly young, mostly temporary and mostly part-time labour it has held all the aces.
The evidence of union disputes involving McDonald's restaurants around the world generally involved franchised restaurants run by independent owner operators, but it is clear that the First Plaintiff took a close interest in them. Time and again Mr Stan Stein who joined the corporation in 1974 as a Labour Relations Attorney and rose, as I have already said to be its Senior Vice President of Personnel and Labour Relations, went to the scene of disputes and spent time there advising the owner operator and ensuring proper, local, legal representation.
Mr Stein spent nine days in the witness box, nearly seven days of it under cross-examination. He is a committed servant of McDonald's Corporation, but he has a clear view of what is legal and what is illegal in labour relations on the part of employer, employee and interested union. He was a very direct witness and I accept that his evidence of fact was his honest recall and generally reliable. I accept his evidence as generally accurate unless I indicate otherwise.
Mr Stein said that none of the First Plaintiff's own, McOpCo, stores had been unionised in his time with McDonald's. There had been a handful of unionised owner-operator stores in the U.S., but the unions withdrew from those stores in the mid 1970s when employees petitioned the National Labor Relations Board (NLRB) for decertification. No owner operator stores had been unionised since then. "It is an employee choice thing, the employees have not chosen to be represented by a union and are satisfied with their relationship with McDonald's." Rap Sessions, Crew Meetings, Opinion Surveys and so on did the work. Unions had made charges of unfair labour or unionisation election practices against the First Plaintiff during Mr Stein's time, but not that many, and the NLRB had never found any of the charges proved after a contested adjudication.
So McDonald's was "a non-union employer" in the U.S., but only 13% of the labour force in the U.S. was represented by unions and that was mostly in particular industries.
Mr Stein said that it was wrong to suggest that pay or conditions would improve with union representation. He had seen labour agreements in the industry, which were less than those which McDonald's employees enjoyed. Pay for performance was, generally speaking, alien to union contracts which would generally involve across the board increases according to seniority.
Mr Stein said that McDonald's recognised unions and had labour agreements in many countries outside the U.S. Some are direct agreements with the local McDonald's company. Others were with employers' associations which the McDonald's operator had joined. That did not concern the First Plaintiff if it was in accordance with the law or custom of the country. McDonald's would live up to local obligations.
Local McDonald's companies or operators around the world had a great deal of autonomy. They were mostly run by local nationals and it was their obligation and duty to run the McDonald's operation in their countries properly and in accordance with the law.
If local operators sought the First Plaintiff's or Mr Stein's advice, they would be told to comply with all the laws and customs of the country. Mr Stein had no problem with unionisation in accordance with the law or the wishes of the workforce, although McDonald's would definitely prefer to negotiate with employees, given the choice. Mr Stein said that it was rubbish and totally untrue that McDonald's had a policy of getting rid of pro-union workers. "That would not only be illegal but probably one of the dumbest things a company can do. You would create a martyr situation. Your employers would never stand for that and they would rise up against you. Either you have integrity as a company or you will go out of business".
The specific restaurants or countries which Mr Stein and other witnesses dealt with, as in the U.K., were picked by the Defendants. There was no question of the Plaintiffs picking restaurants or countries where they might show themselves in a good light. On the other side of the Atlantic, I particularly heard about Puerto Rico, Chicago, Detroit, Arkansas, Salinas in California, Philadelphia, Portage in Indiana, Mexico City and Orangeville in Ontario, Canada.
Mr Stein was the only witness of events in Puerto Rico. His account of the background was hearsay. When he joined the First Plaintiff the McDonald's operator in San Juan was Mr Dan Miller who lived in Washington, D.C. According to Mr Stein there was a clash between the local union which had strong nationalist feeling and the employees at Mr Miller's store, who petitioned the NLRB. The First Plaintiff had a policy that all franchisers should live in or near the community in which they operated but Mr Miller refused to move to San Juan. The corporation had taken steps to take default action against his predecessor, a Mr Gibson, for poor standards. He had sold his rights to Mr Gibson, subject to the default proceedings, and when Mr Miller refused to move it was decided to continue the default proceedings and Mr Stein was instructed by the Corporation's Chief Executive Officer not to give Mr Miller any further assistance with employment problems.
In fact Mr Miller became reconciled with the union in 1974 or 1975 in the course of the NLRB proceedings but he closed down his operation after a few months for financial reasons. There was no truth in the Defendants' allegation that the Corporation closed its store in Puerto Rico to avoid unionisation. An unrelated store in another part of Puerto Rico remained open. In 1980 new stores opened in Puerto Rico run by local franchisees. They were non-union.
The Defendants also relied upon events relating to McDonald's store at 115 North Wabash, Chicago, Illinois, in 1978, to support their contention that the first Plaintiff is and always has been aggressively anti-union. They called Mr Michael Sorriano to give evidence, and they read a deposition made by Mr Bryant Cunningham, which was admitted in evidence under the Civil Evidence Act.
The McDonald's restaurant at 115 North Wabash in central Chicago was operated by Lyon-Webber Management Co., a partnership between Joseph Lyon and Thomas Webber under a licence or franchise agreement with the First Plaintiff. Lyon-Webber operated a total of eleven McDonald's restaurants in the greater metropolitan Chicago area. Each was the subject of a separate licence agreement.
Mr Sorriano worked as a crew member at the 115 North Wabash restaurant from its opening on 29 April, 1977, until July, 1978. He was in his early twenties. He then went on to other jobs and he is now a senior manager with a copier sales and service company. He took a vacation to come to London to give evidence and he still feels strongly about what happened in 1978 when, by his account, the First Plaintiff and Lyon-Webber did everything that they could to stop the union representation which he and Mr Cunningham tried to organise in order to redress the grievances of crew. Mr Cunningham's evidence relied on statements which he made at the time for National Labour Relations hearings. Mr Sorriano was an impressive witness. His evidence on matters of fact was neither contradicted nor challenged by the First Plaintiff and I accept it. From time to time Mr Sorriano drew conclusions from the events of which he spoke. It is for me to judge whether the conclusions are correct, where they matter. Where Mr Cunningham's statement added to Mr Sorriano's evidence it was consistent with the general nature of that evidence and I accept his statements of fact also.
The evidence of events was as follows.
Wages at 115 North Wabash were low. Mr Sorriano was paid $2.80 per hour when he started. It was the policy of the McDonald's system not to pay overtime and by Illinois State Law work over eight hours in any one day had to be paid at "time and a half", so he was scheduled seven hours a day from 11am to 6pm and he worked six days a week, including Saturdays, to make as much money as he could. Performance reviews leading to pay rises were held late.
There were a lack of benefits and unfair and arbitrary management practices.
Mr Sorriano and Mr Cunningham and others therefore contacted the Hotel Motel Service Workers, Drug Store, Sports Events and Industrial Catering Employers Union, and circulated union authorisation cards among crew members at the restaurant. There were about 130 crew and in a matter of two days they obtained in excess of 70 signatures. The union then petitioned the National Labour Relations Board for representation at the restaurant, arguing that production and maintenance employees at the single restaurant at 115 North Wabash constituted an appropriate unit for representation. Lyon-Webber contended that the scope of any appropriate unit must include all eleven restaurants which operated in the metropolitan Chicago area. On 12th April,1978, the Board found in favour of Lyon-Webber on this issue, and that was the end of the petition. Mr Sorriano had gone to two other Lyon-Webber restaurants to have union cards signed but he had been escorted off both premises by a manager, so there was no hope of obtaining the requisite proportion of signed cards from the total crew of all eleven restaurants.
Any employer is entitled to resist a union's petition to the Board, if it has grounds for doing so, and it is not for me to "second guess" the Board's decision. I can see it is easier for a union to get the requisite proportion of cards signed in one restaurant alone, yet an employer who has several restaurants will want to avoid fragmented union representation. The real thrust of the Defendants' case depended upon the employer's conduct during the representation dispute between January and March,1978.
I accept from Mr Sorriano and Mr Cunningham that as soon as the move for unionisation became clear, management stopped them doing anything which amounted to solicitation at the restaurant, although other employees were allowed to push other causes as had happened in the past; that with one exception when the area supervisor kept Mr Sorriano late talking so that he missed a union meeting they were made to leave the restaurant no longer than twenty minutes after the end of their shifts, in accordance with a rule which had not been enforced before; that they were closely observed and followed by managers; and that the supervisor told Mr Sorriano, in a way which he found intimidating, that he was making a great mistake and that he did not know what he was getting into.
I also accept that once the union drive was known, Lyon-Webber introduced "perks" like basket ball and volley ball teams and a Christmas Party, held in February, and other treats and benefits and improved conditions which had not been provided before.
I accept that a Field Consultant, Mr James Smith, and a Personnel Officer, Mr James Morgan, from the First Plaintiff, had meetings at the store. To Mr Sorriano's mind this was important because it demonstrated the First Plaintiff's involvement in what was happening. Mr Morgan said that there were no unions at McDonald's and that unions had tried over 500 times but each time the union lost out. He said they had over 4400 stores in the U.S. and none had unions. Mr Morgan stressed that if there was unionisation, dues would be taken from their pay cheques to pay for it and even if the union won the election the company (I assumed he meant Lyon-Webber) would come hard-nosed and crew would only get what McDonald's gave them. Again Mr Sorriano thought that this showed the First Plaintiff's influence. The McDonald's representatives passed out an opinion survey and more concern was shown for crew's grievances, all as a result of the union drive and in an attempt to sway crews against the union. A lot of "big shots from all over came down to Wabash store" and "started being real nice" to crew, according to Mr Cunningham.
Notices were posted with an anti-union slant.
Some existing employees were "terminated" and new people hired, which weakened the union base.
Mr Sorriano was offered a better job at higher pay, while Mr Cunningham was treated less well. I have no doubt that the offer to Mr Sorriano was a "sweetener", but I am unconvinced that there was an attempt to divide the two.
However, there was no suggestion that anyone was fired for union activities.
From time to time during his evidence Mr Sorriano expressed the view that various of the above matters were unfair labour practices and contrary to labour law, but he was not a lawyer qualified to give expert evidence on that point.
He and Mr Cunningham made depositions and Lyon-Webber consented to an order not to indulge in unfair labour practices although Mr Sorriano, very fairly I thought, accepted that this might have occurred without any admission of actual impropriety.
In my judgment events relating to 115 North Wabash, Chicago, which is very near to the First Plaintiff's head office in Oakbrook, demonstrated a very strong desire by the First Plaintiff to keep all "McDonald's" restaurants, whether its own or franchisees', union free. In particular I consider that this was demonstrated by the meetings attended by McDonald's Corporation officers and the improvement in conditions which must, I feel, have been orchestrated by the First Plaintiff. No one, however, was dismissed for union activities.
The Defendants alleged that a union recruitment drive in Detroit in 1980 was systematically undermined in the lead up to a recognition vote.
The Civil Evidence Act statement of Mr Daniel Cantor, then the organising director for the Detroit Fast Food Workers Union, said that there were several dozen McDonald's franchises in the Detroit area and when the union began talking to employees at about fifteen of them there was great interest because the basic wage in the fastfood industry was minimum wage and McDonald's was no different. 65% of the workers at three McDonald's restaurants owned by Mr Ralph Kelly signed authorization cards enabling the union to file with the NURB for an election. Nearly all the employees were young, black and from strong union backgrounds; often the children of autoworkers.
"McDonald's" challenged the right to an election, tried to isolate those leading the union drive, and sacked two of them, McDonald's was instructed to post official election guidelines but it put pressure on the workers by holding parties and a disco, saying that they would lose benefits if they voted for the union. It called in a famous football star, Mr Earl Campbell, to give a pep talk on why it was unnecessary to have a union.
The union support dropped from two-thirds to one-third at the election.
Mr Stein's account was that there was an NLRB election which was decided about 104 to 34 in favour of Kelly and against the union, the Detroit Fast Food Workers Union whose officials and leaders were interchangeable with those of ACORN an organisation involved in civic issues.
After the election there were claims that Mr Kelly had interfered with the election but they were dismissed, the results certified and that was the end of it. The sweeteners alleged during the campaign were the store visit by Earl Campbell. Mr Stein said that was a simple charity visit. There were also McBingo benefits and staff disco. In addition Mr Kelly prepared two pay cheques for each employee. One was for the amount of union dues and one for pay less those dues the two amounting to total pay. It was a graphic way of showing how much would be lost from a pay cheque each period, in union dues.
Mr Stein said that all those matters were raised by the union and dismissed by the NLRB. Pay rates did not became an issue in the campaign.
Mr Stein was taken through the statement of Daniel Cantor. He refuted the parts of it which were put to him, particularly the alleged firing of pro-union workers, and the allegation or that other charges against McDonald's were upheld, or that Earl Campbell lectured employees about not joining a union. He did not say anything about unions.
Mr Stein said that he spent a total of about two weeks at the Ralph Kelly store from start to finish.
It is always difficult to evaluate written evidence contradicted by live evidence. I believe that Mr Kelly did treat his employees particularly well with a view to the honey pot outweighing the union in votes. I believe that it was very important to the First Plaintiff that Mr Kelly should win the election in a strong union city. But I am not satisfied that he sacked any of the campaigners.
The Defendants alleged that in 1983 the First Plaintiff sided with one of its main suppliers, Tysons, in Arkansas, against the United Farmworkers and Commercial Union (UFCU). In fact Mr Stein said that the union involved was the United Food and Commercial Workers Union which was not to be confused with Mr Cesar Chavez' Farm Workers union.
Tysons supplied Chicken McNuggetts which were a relatively new product at the time. They built a new processing facility in Nashville, Arkansas. Mr Stein said that Tysons recognised the UFCU as the representative of their people in that facility. Collective bargaining ensued but the parties could not reach agreement and the union decided to put pressure on Tysons by picketing both McOpCo and franchised stores with leaflets on the streets of three cities, and mass mailing in seven states.
The leaflets alleged insanitary conditions at the Tysons plant, which were alleged to affect the lives of Tysons' workers and the health of the consuming public.
Mr Stein inspected Tysons' plant. "The plant was state of the art stainless steel. I would eat off the floor". So secondary boycott charges were filed with the NLRB by McDonald's against the union, but the NLRB would not look into the truth of the leaflets or intervene. Any action for damages would take time, so McDonald's told Tysons they would have to cease doing business with them, hoping that Tysons would resolve its differences with the union. The employees took the view that the union was acting in its own interests rather than theirs. They instructed their own attorney independently of Tysons and McDonald's and unfunded by either and successfully sought an interlocutory injunction to restrain the union from issuing the leaflets. I have the Court's judgment delivered on 10th June,1983. The Court found "that the purported insanitary conditions [were] false, misleading, deceptive and fraudulent". The union did not take the suit to a full hearing and the leafleting stopped. Owner operators in the three cities took libel proceedings against the union. A union officer, Mr Murphy asked Mr Stein to intervene to help resolve the matter. A settlement was reached which involved the union paying $1.1 millions damages to the franchisees. Mr Stein and Mr Murphy had remained friends since that time.
Mr Stein said that he came across Mr Gallin of I.U.F. during the Tysons matter. He called Mr Stein and asked whether McDonald's were going to continue to buy Chicken McNuggetts from Tysons. Mr Stein said they were and Mr Gallin said he would sponsor a worldwide boycott of McDonald's. Mr Stein asked for a meeting with him and told him he should find the facts before calling a boycott. Mr Gallin said that it was political and he had to support his members. Mr Stein said that he should conduct labour relations on a higher level. Several months later Mr Gallin wrote Mr Stein a letter saying that he had cancelled the boycott and the Tysons matter was not a reflection on McDonald's policies concerning labour relations.
The Defendants alleged that the First Plaintiff sided with Bruce Church in a dispute with the United Farm Workers in 1983 or 1984.
Mr Stein said that Bruce Church, trading as Freshco in the Salinas Valley, California, supplied McDonald's stores with lettuce.
The United Farm Workers led by Mr Cesar Chavez had a long-standing dispute with Bruce Church over an attempt to organise its farm workers.
Mr Stein received a call from Mr Chavez whom he had known for many years. Mr Chavez said that he was going to start picketing some of McDonald's restaurants. Mr Stein looked into the matter. He advised Bruce Church that the matter should go before the NLRB as there was a good chance that the NLRB would enjoin the union from picketing and leafleting McDonald's stores. But Bruce Church refused to file charges. They wanted McDonald's involved in the dispute because its good name would give Bruce Church credibility. Mr Stein told Bruce Church that that attitude misunderstood its responsibility to McDonald's as customers and when Bruce Church persisted in its attitude McDonald's stopped purchasing from Bruce Church. Mr Stein said that there was no element of anti-union thinking in McDonald's attitude to Bruce Church. McDonald's itself could have taken a case to the NLRB in respect of the threat of picketing but it did not do so because it considered the primary dispute to be Bruce Church's.
Mr Chavez's union did not have designs on McDonald's stores. Mr Stein got involved because he had NLRB background and the NLRB dealt with secondary boycotts, and because he was determined that no union sympathies should be communicated to McDonald's workers.
I have already referred to the dispute in Philadelphia in 1989 and 1990, which involved the First Plaintiff, represented by Mr Stein, and the Philadelphia Unemployment Project (PUP). The dispute did not appear to me to involve any anti-union strategy on the First Plaintiff's part. I had no reason to doubt Mr Stein's evidence that PUP did not represent any national union and that he did not go to Philadelphia because he thought that it was a union organising drive. He spent eight days in all in Philadelphia and that was, in my view, merited by PUP's charge that McDonald's operators were paying black crew less than white. Finally, with regard to U.S. stores, the written statement of Mr David Dudley-Boyden said that he was employed by McDonald's (whether the First Plaintiff or an owner operator was not clear) in Portage, Indiana, from September,1984, to July,1989. During that time he spoke to fellow employees about organising and forming a union. He was overheard by a manager who warned him very sternly that such talk would lead to the termination of his employment. The manager made it very clear that someone had been fired in the past for enunciating union sympathies but that was only what Mr Dudley-Boyden said that he was told and there were no details.
Although that was the last U.S. restaurant to feature in the trade union part of the case, I heard some evidence about Mexico City and a lot about Orangeville, Canada.
The Defendants alleged that in 1985, McDonald's was hostile to a union recognition campaign in Mexico City, which was resolved in the union's favour.
Again Mr Stein was involved. His account was that in 1985 a young joint venture partner, Mr Sahul Kahan planned to open a restaurant in Mexico City. He received demands for unionisation from unions, one of which was called CROC. The Mexican system in those circumstances is that the union files a petition with the Labour Board, calls a strike day and attends at the workplace on the strike day. If the employees stop work the employer is obliged to negotiate a labour agreement with the union. Mr Stein spent a total of about three weeks in Mexico City over a four month period. CROC called a strike day. On the strike day all employees attended the store. There were 150 to 200 employees in all because a large number had been engaged in anticipation of further stores opening. Union officials came to the store with 200 or 300 union members from other establishments, armed with sticks and baseball bats. They circled the store, the union officials were allowed into the store to address the employees who refused, however, to strike.
For three hours the union members refused to leave. Some tried to force their way into the restaurant. There were scuffles. Mr Kahan and Mr Stein called the police who failed to attend, so they got the militia to come. They came with guns and an armoured vehicle and other vehicles and they carried the employees and customers away. The union took over and occupied the premises for three weeks. McDonald's pursued a petition to the Labour Board which arranged an election. The employees demonstrated against union attempts to delay the election. A meeting was held at the Department of Labour, attended by employer, employees' leaders, CROC and another union. Agreement was reached by all parties that Mr Kahan would recognise a second union. It has been recognised within his operations since and there have been successive agreements. He has twelve or fifteen. There are altogether over 100 McDonald's restaurants in Mexico and they are all unionised. There have been a good labour relations. The corporation has no problem whatsoever with that.
A professional video film was taken of the strike day troubles on McDonald's behalf. The Defendants saw it, but I did not because I did not understand them to challenge Mr Stein's events once they had seen it themselves.
The Defendants contended that a recent illustration of McDonald's hostility to trade unions was its reaction to a trade union recognition campaign in the McDonald's store at Orangeville, Ontario, in 1993 and 1994. Orangeville is a town of about 18,000 inhabitants, about an hour's drive north of Toronto. Since the Defendants relied so heavily upon their version of events in Orangeville, I will take the matter quite fully.
The bare facts are that the McDonald's Store in Orangeville was and still is owned and operated by a franchisee under a licence agreement with McDonald's Restaurants of Canada Limited which is, directly or indirectly, the wholly owned Canadian subsidiary of the First Plaintiff.
The original franchisee was Tingle Foods Inc., the company of Mr John Tingle. At the turn of 1991/1992 Mr Cameron Ballantyne took over Tingle Foods Inc., and thereafter ran the store under the franchise, changing the company name to Ballantyne Foods Ltd. He brought in Mr Rob Pinkney whom he already employed, to manage the store.
The Orangeville Store was very largely crewed by young people, many of whom attended the local high school. They were employed by the franchisee, not by any McDonald's Company.
A crew member called Sarah Inglis who was a student at the local high school joined the Service Employees International Union (SEIU), and in August,1993, when she was still only sixteen years of age, she began to sign up crew at the store as members of the SEIU. She was assisted by a small number of like-minded friends and a Union Officer, Mr Rui Amorim.
The law under the Canadian Labour Relations Act was that if 55% of eligible employees in the restaurant signed union membership cards the Union could gain automatic certification with consequent collective bargaining rights. By the beginning of October,1993, Miss Inglis and others had obtained the signatures of about 67 of the 100 or so eligible employees at the restaurant, and on lst October,1993, the Union filed an application for certification, with McDonald's Restaurants of Canada Ltd and Ballantyne Foods Ltd named as Responding Parties, although the McDonald's company later disputed its alleged status of employer.
Ballantyne Foods Ltd opposed the union's application for certification on the grounds that a number of crew who had signed applications for union membership were under eighteen and that in any event many had signed as the result of intimidation and as the result of misrepresentations about the benefits of union membership and misrepresentations to the effect that their union cards would be returned if requested. In fact, it was said, requests for the return of cards were refused.
Thirty-nine crew members intervened in the application complaining that they had been misled before signing. Lawyers were instructed on their behalf. The evidence did not reveal just who instructed and paid those lawyers. It was not the comparatively impecunious crew members. In my view it must have been Ballantyne Foods Ltd or McDonald's Restaurants of Canada Ltd or some parents who were unhappy that their children had joined the union, or a combination of those.
In any event the union denied the allegations and hearings began before the Ontario Labour Relations Board at the beginning of November,1993. By February,1994, about twenty of the intervening crew had been called to give evidence and had been cross-examined by the union lawyers. There were many more witnesses to come. The union had not even started to call its own evidence and no end to the hearing was in sight, so at the instigation of and with the approval of the Board the proceedings were settled on detailed terms, the most important of which was that there should be a secret ballot to take place on 24th February,1994. If the ballot went in favour of the union its application would be restored. If it went against the union its application would be withdrawn without prejudice to its right to make a further application in the future.
Both union and employer agreed not to discuss the rights and wrongs of the past before the vote and they agreed that the best way to ensure that employees were able freely to choose whether they did or did not want a union to represent them was to put the past behind them. When the vote came, about 20% voted for the union and 80% against, and there, so far as I am aware, the matter has rested with no further claim for union recognition at the Orangeville store.
Nevertheless the Defendants called detailed evidence designed to establish that Mr Ballantyne treated his company's employees badly in a number of respects; that as a result the unionisation attempt took off with about two thirds of crew willingly signing union cards within about five weeks; that when he got to hear of the attempt to organise, Mr Ballantyne put undue pressure on crew to change their minds and to turn against the union; that Mr Ballantyne improved conditions, only to return to his old ways after the secret ballot; that Mr Ballantyne used unfair tactics in the run up to the ballot; and that the First Plaintiff and its Canadian subsidiary supported Mr Ballantyne to the hilt in what amounted to a fight for unionisation of one store.
All this, it was contended, went to demonstrate "McDonald's" antipathy to those who were trying to improve their working conditions by union representation.
The Plaintiffs' called equally detailed evidence designed to refute the Defendants' allegations.
Despite the effort put into the contest by both sides, I have two important difficulties with the part played by the Orangeville issue in this case.
Firstly, there were limitations in the evidence itself. Although I was presented with a number of contemporaneous documents, they were not in my view decisive of any the important issues. A large number of witness statements were adduced in evidence under the provisions of the Civil Evidence Act, since their makers live in Canada, so I could get no live impression of those witnesses' reliability and obviously they were not tested by cross-examination. A very limited number of witnesses with first-hand knowledge of events were called into the witness box. I heard Ms Inglis, and Ms Sabina Iurillo and Ms Michelle Wetli, both of whom signed union cards but then actively supported Mr Ballantyne against the union. There were direct conflicts between Ms Iurillo and Ms Wetli on the one hand and Ms Inglis on the other, in relation to a large number of allegations made by Ms Inglis, and although all three witnesses seemed to be thoroughly decent young people, no one of them seemed to me to be an entirely dependable witness, if only because they had clearly taken firm sides in a small community which was to some extent divided by the dispute. Ms Iurillo made the most favourable impression of the three upon me, although I believe that she felt that she had something to gain from loyalty to Mr Ballantyne. I believe that things said to her by Mr Ballantyne after the union campaign came into the open led her to hope for promotion, and she was in fact promoted to Swing (Floor) Manager five months after the dispute ended. Ms Wetli was promoted to Swing Manager six months after the dispute ended. She seemed to have some long standing personal animosity towards Ms Inglis. Both were still working for Mr Ballantyne's company at the time when they gave evidence. Ms Inglis clearly enjoyed the temporary prominence which the dispute brought her. The wording of her witness statement and of an article which she wrote about the dispute show clear signs of that. She was identified with the dispute and a lot of personal pride was invested in its expected success.
I did not see or hear Mr Ballantyne, the central figure, but I do not hold this against the First Plaintiff. Mr Ballantyne may well have thought that he had better things to do with his time than to come to England to give evidence in this case, and there is no reason to believe that the First Plaintiff had any ability to force him to do so. I did hear some evidence from Mr Stan Stein who yet again had some involvement with the dispute, but much of Mr Stein's evidence depended upon information from others.
Secondly, and in any event, the dispute most directly involved a franchisee who was and is an independent businessman, treating his employees as he saw appropriate, and no doubt with his own views about union representation of his workforce.
In these circumstances I propose to make findings only on the main points as I see them, and I stress that I do so on the balance of probabilities only.
I do not believe that Mr Ballantyne treated his crew badly after his arrival at the store. I accept Ms Iurillo's evidence that he ran things on a tighter rein than Mr Tingle had done and I believe that this may have upset some of his young crew who were used to a more laid-back atmosphere and who were apprehensive of change. But I also accept Ms Iurillo's evidence of an occasion when she corrected some crew members for serving food which was not fresh. They said "Who cares?". Mr Ballantyne who was present said "I care". Mr Ballantyne's changes were probably for the good.
I accept that Mr Pinkney could be moody and that crew were apprehensive of this. There was evidence from both sides' witnesses to this affect, and since Mr Pinkney was seen by crew as Mr Ballantyne's man, this no doubt reflected on Mr Ballantyne in the minds of some crew members.
However, I consider that Ms Inglis's statement that about six months after Mr Ballantyne bought the store "it became miserable for everyone" was untrue. At the very least it was an exaggeration which left me unable to rely upon Ms Inglis's more detailed allegations about the way Mr Ballantyne ran the store. One of those allegations, made in her witness statement, was of "threats of firings", but she explained that by this she meant merely that crew were afraid of losing their jobs because of the moods of management and because there was a high turnover rate. It was disputed that the turnover rate was high and Ms Iurillo said that the atmosphere in the store was happy because so many of the crew were or had been at school together and were good friends. This seems to me to be a more likely scenario.
You have to be strongly motivated to start a union drive at the age of sixteen, keeping it away from the notice of your employer, which is what Ms Inglis did. Young people are to be admired for their ideals, but having observed Ms Inglis in the witness box and heard her repeated references to the loss of and need for "respect, dignity and job security" I am convinced that her attempts to unionise the Orangeville Store had much more to do with her political views than with Mr Ballantyne's treatment of crew members. I have no reason to doubt Ms Inglis' evidence that on one occasion Mr Pinkney made a thoroughly distasteful and sexist remark to her, which distressed her, as did the fact that when she complained to Mr Ballantyne he merely asked her what she wanted him to do. Ms Inglis appeared to be a very serious young woman and I can accept her evidence that she was taken off the Drive Thru in July,1993, because she did not smile enough. She was upset by this too, and both incidents may have been part of her motivation to start a union drive the following month, because she thought that unionisation would mean that she had someone to represent her when such incidents occurred.
I believe and find that a significant number of those who signed union cards did so because they had been told that unionisation would guarantee a wage increase and job security and would lead to other improvements, rather than merely leading to negotiations towards those ends. I also find that a number of people who hesitated to sign were reassured that if they changed their minds later they could have their cards back on request, which was in fact denied them.
These matters were strongly denied by Ms Inglis. The allegations and denials of misrepresentation about union benefits and about entitlement to have one's card back went together. Ms Iurillo's evidence was to the effect that at a meeting at Sarah Inglis's house, Mr Rui Amorim told those present that unionisation would guarantee a wage increase and job security and that there would be other benefits. Ms Inglis asked her to sign on a number of occasions. She was eventually persuaded to sign by Mr Chris Morrison who had been her boyfriend. He told her that he had been told by Sarah that her membership card could be returned at any time upon request. On two occasions she asked Ms Inglis for her card back without success. On the second occasion which was only two days before the union filed its application for certification, Ms Inglis asked Ms Iurillo how she could leave her "to hang and dry". Those words had the ring of truth to me, but Ms Inglis denied being asked by Ms Iurillo for her card back, so she also denied using those words. She looked very uncomfortable in the witness box when denying the use of those words, and it does seem inherently likely to me that she was anxious not to lose face by having to return cards. I did not believe her denial that she used those words, and likewise I do not believe her denial of guarantees of benefits and of promises that cards would be returned. I believe that Ms Inglis and her aides were very persistent and badgered some people to sign, although I do not find that there was any intimidation by her or the union officer, Mr Amorim. Many of those who signed, including Ms Iurillo and Ms Wetli, were in fact older than Ms Inglis.
I believe and find that when he heard of the unionisation drive, Mr Ballantyne put pressure on crew who had signed or who might be thinking of signing to think again. Some of this pressure was proper. Some of it was dubious to say the least. I find that Mr Ballantyne did ask crew members to see him one by one for a talk, but I see nothing wrong with that. On the other hand I accept and find that he made statements to the effect that union representation would mean possible loss, subject to renegotiation, of benefits already held, including McDonald's Gold Cards which gave discounts at McDonald's and at partnering retail stores, and in my judgment no reasonable employer could honourably have used union representation as a ground for withdrawing those benefits unless, at least, they were replaced by some equivalent.
I am not satisfied that Ms Iurillo and Ms Wetli were acting with Mr Ballantyne's encouragement when, together with a Swing Manager, Mr Chris Broom, they first organised a reaction against Ms Inglis' union drive and the making of a petition against unionisation. There was evidence that Mr Ballantyne was away from Orangeville on the weekend when that happened, and I prefer the evidence that he did not know of the union drive until the Monday. Ms Wetli spent Saturday 2nd October,1993, at the store, talking to crew on shift and telephoning others, although she was not on shift herself. However, I believe that she could have been allowed to do this by someone in a management position, without Mr Ballantyne's knowledge. Mr Ballantyne held a crew meeting on 5th October,1993, after he had heard of the union drive, and I have no doubt that thereafter crew who sought to encourage resistance to the union drive, including Ms Iurillo who organised the making of many statements by crew members to the Labour Relations Board, were acting with his direct encouragement.
Both Ms Iurillo and Ms Wetli gave evidence to the effect that Chris Broom played a large part in organising feeling against unionisation. Ms Iurillo said that Chris Broom approached lawyers for the intervening crew members, but I do not believe that the lawyers could have been instructed without Mr Ballantyne's active participation, if only because it does not appear that any of the intervening crew were called upon to contribute to the lawyer's fees. I do accept that some crew member's parents, including Chris Broom's father it seems to me, were strongly anti-union and it is impossible for me to estimate with any certainty how much of the motivation for the anti-union reaction came from crew themselves, parents and Mr Ballantyne. I do think that a lot of young crew probably had spontaneous cold feet about having signed union cards, without I believe really thinking, when they realised that Mr Ballantyne who had provided them with work for which they were grateful, was upset at the prospect of unionisation of his business. Such a reaction would only be human nature, especially if some parents were upset too, as they clearly were. I thought that Ms Iurillo's evidence to the effect that at the age of sixteen, seventeen or eighteen you just wanted some money from your part-time work, in order to go to the movies or out to dinner and that you were not too concerned about the benefits of union membership, was probably true for a lot of the crew at Orangeville, although clearly not for Ms Inglis. I believe that a lot of the young crew were content with what they were getting and had no wish to stir things.
I do not think that Mr Ballantyne was being two-faced, as the Defendants suggested, in at first telling crew at a meeting that it was up to them whether they joined the union, and then later taking the legal point before the board that many were under eighteen. No doubt he did what his lawyers advised, and it was clear from Miss Inglis' evidence that some of those who had signed were as young as fifteen.
The sheet produced by "Intervening Employees Against the Union", and entitled "Who Needs a Union. Vote No", made some statements for which there appears to be no justification. There is no direct evidence that Mr Ballantyne had a hand in producing it, but I believe that some of the dubious information in it may have come from him in part at least. For instance, Ms Iurillo told me that at the crew meeting on the 5th October,1993, Mr Ballantyne said that from what he understood unions wanted promotion to depend on how long you worked in the company rather than on ability, although he was not sure about it. The suggestion to this effect appeared in the intervening employees' campaign leaflet. There was no evidence that this was the SEIU's attitude to promotion, and I have no reason to believe that it is true. It was what Mr Stein told me generally happened as a result of union agreements, but no one suggested that the suggestion in the campaign leaflet came from him. It may be a common assumption in North America. I do not know.
I think that discipline may have relaxed and crew may have been treated particularly gently once the union drive was in the open. I do not think that this was sinister. It was an understandable attempt to ensure that crew felt happy with things as they were.
I believe that there was campaigning by Mr Ballantyne between the compromise and the secret ballot, but I do not consider that there was undue pressure. The union campaign continued too, and its literature was posted in the restaurant in accordance with the terms of settlement.
I believe that Ms Inglis' evidence of undue pressure arises largely because she is unwilling to believe that many crew were genuinely unsympathetic to her union drive, or changed their minds about it, and I do not accept it. She was clearly inclined to see the worst in Mr Ballantyne. In her witness statement which she adopted as part of her evidence she said that at the time of the Board hearings, the younger crew sat in the crew room saying they should just make up stories so that they would have to go down to the Labour Board, and that Mr Ballantine paid his witnesses $102 a day. "The longer story the longer you testified the more you got paid." The clear inference of that statement was that young crew were rewarded, even bribed, by Mr Ballantyne for giving protracted evidence. I do not accept that it appeared in Ms Inglis' statement as a mere statement of fact as she said when she was in the witness box. The reality is that the board's procedures involved the payment of $102 per day attendance fee to any witness who was subpoenaed to attend them and that it was also normal procedure to subpoena witnesses whether they were willing or unwilling to attend. Ms Inglis was subpoenaed by the union's lawyers even though she was willing to attend. I am satisfied that if the evidence of young crew members called by Mr Ballantyne's lawyers was lengthy, this was due to the thoroughness of their cross-examination by the union's lawyers. I can understand that those advising Mr Ballantyne might feel it necessary to call all crew who had said that they regretted signing union cards.
In any event I do not consider that any criticism of Mr Ballantyne invalidated the overwhelming vote in favour of what he wanted, namely rejection of the union. From what Ms Inglis said, the union accepted as much, although she found it difficult to take. I do not accept the First Plaintiff's argument that the union only agreed to a secret ballot because the evidence that crew had been misled into signing union cards was convincing, and the board hearing was going against the union. I do not have the evidence to justify any such finding, and I prefer the view that both Mr Ballantyne and the union reached a genuine compromise for very sensible, practicable reasons.
There was no reliable evidence that any crew members were victimised by the franchisee as a result of the dispute while it continued or once it was over, and I reject any such suggestion. Ms Inglis said that a member of her union committee was physically pushed by a manager a week after the vote. But this turned out to be hearsay. Ms Inglis said that management ignored her after the vote, but I doubt whether this was more than a lack of warmth which one might expect after the dispute. She said that one of her shifts was taken away after the vote, but her evidence of this was imprecise, the limited documentary evidence was inconclusive, and Ms Inglis herself said that she was only available for a very limited number of shifts. I do not accept this allegation.
Most important of all, there was no evidence that anyone was sacked for union activity at the Orangeville store. Ms Inglis herself worked on for about four months after the vote. Mr Joel C. Henderson's written statements said that he was accused of stealing. He had been an active pro-union participant in the dispute. In fact his statement went on to say that Mr Pinkney and Mr Ballantyne appeared to be convinced that he had stolen $40 which Mr Pinkney said was missing from a till and that he (Mr Henderson) resigned on the same day "due to management's incompetence". I can see no sound basis for a finding of victimisation there.
I do find that the First Plaintiff and its Canadian subsidiary were very concerned that the attempt at unionisation should fail. Mr Stein went to Toronto "on a couple of occasions" during the dispute. He spent a day or a little more at the Board hearings, and he had lunch with Mr Ballantyne. Although the dispute concerned one restaurant in one modestly-sized town it drew a lot of media attention and I believe that both the First Plaintiff and union activists saw it as a test case to some extent. There was evidence of Mr Ballantyne advising others on how to deal with attempts to organise a trade union at a McDonald's store in Ottawa in September,1995, but this did not take the Defendants' case any further.
I believe that Orangeville demonstrates the First Plaintiff's attitude to unionisation of franchisees' stores. It encouraged and helped Mr Ballantyne to do everything legal to avoid unionisation, but neither it nor the franchisee did anything to get rid of pro-union workers.
Before leaving North america I should say that there was evidence of "Flying Squads" organised by Mr Stein's predecessor Mr John Cooke, which went out to help solve personnel problems in the Corporation's early years. Mr Stein said that there was nothing sinister about the term "Flying Squad". The people who went were advisers who went by air which was unusual in those days. They were not a special squad to fight attempts at unionisation. However, Mr Beavers appeared to accept that one of the reasons why McDonald's stores in the U.S. were not unionised was that the First Plaintiff, through Mr Cooke, took steps to oppose union recognition in the 1960s and 1970s when it might have been a problem.
A written statement by Mr Cooke accepted that polygraph (lie detector) tests had been used on some employees in the early 1970s but he said that these were to detect dishonesty, not to detect union sympathisers. They were quite common at the time, but he did not like them and he stopped them.
I heard evidence from Australia and New Zealand.
A written statement from Mr Michael Boland said that he is the General Secretary of the Australian Liquor, Hospitality and Miscellaneous Workers Union (LHMU) and General Secretary of its Liquor and Hospitality Division. He has worked for the union or a predecessor since 1978. He said that "McDonald's" operated two restaurants in Australian Capital Territory, which were covered by a 1979 industrial award. McDonald's closed the restaurants saying it would be too costly to abide by the awards. Twelve months later they were reopened by a franchisee with whom the union had a issue over interpretation of the award. The issue was never resolved partly because of lack of a union member at the restaurants for the union to pursue a claim for.
Other matters in Mr Boland's statement did not bite on the question of unionisation.
The Civil Evidence Act statement of Ms Nancy Leahy who was Personnel and Labour Relations Manager for Australia between 1977 and 1985 explained that labour relations awards which already existed in Australia when McDonald's opened restaurants there governed the proportion of full-time to part-time to casual (less than 20 hours a week) employees and restricted the number of young "juniors" who could be employed. The awards were difficult for the McDonald's system of operation to cope with, but there was a dispute about their application and construction. Two stores were closed down for economic reasons. They were losing money. When they reopened they operated under an existing award.
The evidence falls short of closing restaurants to avoid unionisation, in my view.
A written statement from Mr Alastair Duncan, Industrial Organiser of the Service Workers Union in New Zealand said that prior to the Employment Contracts Act,1991, New Zealand's industrial relations laws effectively served to bind McDonald's into a process of collective negotiation, but the Act changed that. In January,1995, McDonald's told the union that it no longer wished to negotiate a collective contract with its staff. "Consultative committees" of staff were formed but union organisers could not attend their meetings and they were soon disbanded anyway. Key provisions beneficial to crew had been removed from employment contracts and pay rises had failed to keep pace with inflation. Starting rates for some workers had effectively been reduced. Staff commencing work at McDonald's in New Zealand were now presented with an employer-controlled agreement that had no reference to unions and Mr Duncan knew of no case where employees had successfully negotiated more than company policy.
The written statement of Ms Grainne Troute, Human Resources Manager of McDonald's System of New Zealand refuted Mr Duncan's statement. Ms Troute said that the union only held bargaining authority for 100 out of 5000 McDonald's staff. Yet union organisers were welcome to attend restaurant consultation meetings and some did so. There was a collective process of consultation where by employment packages are agreed and pay and terms of employment have been enhanced.
I cannot decide those issues on two, quite short written statements.
Returning to Europe, events at the restaurants of McDonald's franchisee in Dublin in 1979 and 1985 before publication of the leaflet were as hard fought as those in Orangeville, Ontario years later.
The Defendants relied upon events in Dublin in 1979 and 1985 to support their contentions that the Plaintiffs are hostile to trade unions; that they sack or discriminate against crew who are involved in union activities, and that their rates of pay are low and other conditions of employment are poor. There was a suggestion that in about 1979 McDonald's in Dublin committed breaches of the Young Persons Employment Act. Dublin is expressly mentioned in the leaflet. Since the Defendants relied so heavily upon their version of events in Dublin, I will take the matter quite fully.
McDonald's restaurants in Dublin are operated by Pantry Franchise Ireland Ltd under a licence agreement with the First Plaintiff, which gave the company exclusive rights to develop hamburger restaurants in the City of Dublin under the name "McDonald's". The company was the creature of Mr Michael Mehigan who still runs it. It now has twelve McDonald's restaurants in the Dublin area. Mr Mehigan is Irish but he worked for a McDonald's franchisee in Canadian and then for McDonald's Canada subsidiary for many years before returning to Ireland to set up Pantry Franchise in 1976. He had no experience of unions in Canadian. In May,1977, Pantry Franchise opened its first restaurant in Grafton Street, Dublin. On the 23rd January,1979, it opened a second restaurant in O'Connell Street.
I will refer to "Pantry Franchise" rather than "McDonald's" in what follows because Pantry Franchise, and not either Plaintiff, ran the Dublin restaurants and employed the crew members and it still does.
Shortly after Pantry Franchise opened the Grafton Street restaurant, a number of employees joined the Irish Transport and General Workers Union (ITGWU) and Mr Mehigan received a letter from the union which wished to discuss terms and conditions of employment with him. He did not respond and nothing seems to have happened at that stage. On the 14th February,1979, soon after the O'Connell Street restaurant opened, Mr John Burke, a branch secretary of the ITGWU, wrote to Mr Mehigan at the O'Connell Street restaurant saying that the ITGWU had been instructed by its members employed in the restaurant to seek an early meeting in relation to their wages and conditions.
Mr Mehigan did not reply to that letter either. He told me that there was no impetus for negotiations from employees. He also said that he did not want to lose control of his business and I have no doubt that he associated union involvement with such loss of control. He agreed with my suggestion that he was keeping his head down.
On 18th February,1979, a crew meeting was held at the O'Connell Street restaurant. Comments were made about matters relating to pay and conditions in the crew room.
A crew Rap Session was held on the 22nd February,1979. Mr Sean Mrozek complained about low rates of pay and limited opportunities for overtime. Other complaints included management methods and breaks given too early in morning shifts; all very familiar.
On the 7th March,1979, Mr Burke, not having received a reply to his earlier letter, wrote to tell Mr Mehigan that the ITGWU's members at O'Connell Street would strike from 15th March,1979, but that the union was agreeable to meet Mr Mehigan.
On the 14th March,1979, Mr Mehigan wrote back to say that none of his employees had come to him and expressed a desire to be represented by the union nor had they expressed any dissatisfaction with their wages and conditions. I cannot accept the latter assertion in the light of notes of complaints of low pay made shortly before the date of the letter. Mr Mehigan hoped that his letter would avoid industrial action until he had heard further from Mr Burke, but he did not offer to meet him or any representative of the union.
Picketing began at the O'Connell Street store on the morning of the 16th March,1979. About a week later pickets appeared at Grafton Street. There was some debate about how many Pantry Franchise employees were interested in union representation, but Mr Mehigan estimated that about eighteen full time crew members were interested. There were about 150 crew members at both stores together to start with, and about 30% of them worked full time. So by Mr Mehigan's estimates a fair proportion of full time crew were interested in union representation. Crew members may have risen to about 200 in the course of the summer. Witnesses called by the Defendants said that as many as two-thirds to 80% of full time crew joined the union and the strike.
On the 21st March,1979, Mr Burke again wrote to Mr Mehigan repeating his union's willingness to meet Mr Mehigan. Mr Mehigan did not reply but solicitors wrote to Mr Burke accusing the pickets of violence, threats of violence, verbal abuse, use of excessive numbers and interference with access to the O'Connell Street store. They asked for appropriate undertakings in default of which injunctions would be sought.
Injunctions were granted in April,1979, but without the court needing to decide the final merits of the allegations made by Pantry Franchise against the pickets named in the proceedings. Nevertheless, Mr Mehigan said, the pickets continued to be violent. An employee called James Macken was particularly violent and openly advocated defiance of the injunctions.
Mr Stein came over from the U.S.A. at Mr Mehigan's invitation, according to Mr Mehigan, and spent seven or eight days in Dublin. He found a lawyer for Pantry Franchise. Mr Stein told me that he was threatened by Mr Macken. Mr Steve Copeland who worked for the First Plaintiff in a personnel capacity also came over from the U.S.A. to advise Mr Mehigan. Mr Mehigan said that Mr Stein and Mr Copeland came over because he had no experience of labour disputes. It seems clear from the documentation that Mr Copeland, if not Mr Stein, came to Dublin at the very beginning of the dispute and I have no doubt that this was because of the First Plaintiff's concern about possible unionisation of the Dublin store.
The dispute continued. It was eventually referred to the Labour Court. The union sought recognition by management in order to negotiate wages and conditions of employment on behalf of its members who, it accepted, represented a minority of Pantry Franchise's complete workforce. The company took the stand which it had taken from the beginning of the dispute, that it would negotiate with a union only if the union represented a majority of its employees. According to Mr Mehigan only fourteen employees altogether had joined the union. It was willing to discuss any problems or grievances which a worker might have on an individual level or with one of that worker's fellow employees as a representative. The company also asked the court to conduct a secret ballot of the entire workforce to ascertain the exact number of workers who wished to join a trade union. It contended that it would be unfair if a very small minority of employees represented by a union could determine conditions of employment for the majority who had not wished to join the union.
In my view the Irish company's attitude reflected a common attitude that McDonald's will only consider recognising a union if the majority of its employees vote for union recognition in secret ballet. The unions' stand is that they should be able to represent any member.
The court considered the various arguments of the parties. On the 5th September,1979, it concluded that a survey or ballot would serve no useful purpose as it was clear to the union, the management and the Court that only a minority of present employees were in fact members of a trade union. A survey would simply confirm this. It took the view that it was an important principle of natural justice that each employee should have the right to be represented by a person of his or her choice and it was therefore unfair of the company to limit this choice to fellow employees only. On matters of serious concern to employees they had the right to be represented by a trade union official if they so wished. The court therefore recommended that on individual issues the Company should agree to recognise the ITGWU and discuss any matter with it when a member of the union so wished. Moreover there was no reason to believe that in granting recognition to the ITGWU, the company would be antagonising other members of the staff who did not join the Union. Indeed the contrary would be the more likely result in that necessary improvements in wages or conditions which the ITGWU might negotiate for its members were likely to improve relations not just between ITGWU members and the company, but between the company and non-members assuming that the improvements were extended to non-union members.
The Court recognised that negotiating with a trade union which did not have majority support could cause problems for any management, because in addition to giving consideration to whatever agreements were put forward by the union they had the responsibility to be fair to all others concerned whose points of view might not be so clearly articulated. The Court appreciated that monitoring techniques and consultative arrangements (Rap Sessions) within the Company were an integral part of the management philosophy, but considered that recognition of the union would not be incompatible with this management policy. There was no reason why it could not co-exist with trade union representation for either a majority or minority of employees.
The Court therefore recommended that the Company should agree to recognise the ITGWU for negotiating purposes both individually and collectively on behalf of its members.
The company accepted the Court's recommendation. Mr Mehigan's account was that he agreed with the union that if it stopped picketing and other action he would take back picketing employees who wished to return to work. But he would not take back Mr Macken who had been poor at his work and who had proved himself totally irresponsible by his activities on the picket line, in Mr Mehigan's view.
It was suggested by the Defendants that Pantry Franchise discriminated against four employees who had been active in the strike, James Macken, Ann Holmes later Casey, Sean Mrozek and Tom Caulfield.
Mr Macken complained that he had been dismissed because of his trade union membership and activities but the Employment Appeal Tribunal rejected this claim. It held that he had been dismissed without notice and that he was entitled to one week's pay. The company had always been prepared to pay this.
Until her participation in the strike Mrs Casey had been employed by Pantry Franchise as a Lobby Hostess at Grafton Street. She joined the union, became a shop steward and took part in picketing. She had already been a member of the union when employed elsewhere but she had let her membership lapse. After the strike Mrs Casey was told that Pantry Franchise had done away with the position of Lobby Hostess. She was told this by the union which had been informed of the position by Pantry Franchise. Although Mr Mehigan's case was that alternative work was available to Mrs Casey if she chose to return, I accept Mrs Casey's evidence that she was never told that and that she was never offered another job and as far as she was concerned she had lost all employment with Pantry Franchise.
Pantry Franchise restored the position of Lobby Hostess about two years later.
Mr Mehigan denied that the post of Lobby Hostess was abolished so that Mrs Casey would have no job to return to after the strike. He said that Lobby Hostesses were paid more than ordinary crew and the post was abolished because there was a slow down in business during the strike and the post was not proving to be of any value. The post of Lobby Hostess at O'Connell Street, held by another woman, was abolished at the same time in the summer of 1979.
Mrs Casey told me that with the help of the union she put the question of what she saw as her dismissal before the Rights Commissioner who is part of the Labour Court's conciliation service. He held that she had been victimised for her trade union activities. I do not have the Rights Commissioner's ruling. It is common ground that Mrs Casey received compensation after the Rights Commissioner made a ruling in her favour. Although Mr Mehigan described her complaint as one of unlawful dismissal without conceding victimisation for union activities, I accept Mrs Casey as an honest witness on this point.
Mr Sean Mrozek joined the union and joined the picket line. He denied any violence in his presence although he said that there was shouting sometimes. Mr Mrozek had joined the union before the strike but he and others who had joined did not tell the management because they feared they might get sacked. When union membership became clear, Steve Copeland suggested that members form an 'in house' staff association instead.
When the strike ended Mr Mrozek and other strikers went back to work. Two or three weeks later he was waiting for a fellow worker outside the crew room when one of the management team told him that there had been a lot of thefts from the crew room, insinuating that he was there to steal. About two weeks later again he was suspended for drinking before arriving at work. Mr Mrozek said that he had drunk half a pint of lager and others drank before working without exception being taken. After a visit to the Rights Commissioner he was reinstated but he thought that the attitude of managers towards him had changed and he eventually left.
Mr Mehigan could not really remember how Mr Mrozek came to leave.
Mr Mehigan remembered that Tom Caulfield came back to work after the strike. He did maintenance work and Mr Mehigan could not remember any controversy about his job status being reduced. He did not go to the Rights Commissioner so far as Mr Mehigan recalled.
After the Labour Court ruling and the end of the strike, there was some correspondence between the Labour Court, the Federated Union of Employers, the union and Mr Mehigan concerning a National Understanding which was to be put into effect. This correspondence petered out after some months and there was no evidence before me of unions intervening on behalf of members thereafter, or of improving the terms or conditions of employment of Pantry Franchise employees, save for the union's intervention on behalf of Anthony Brien and Mr Coner McCann in 1985. If the union has been active in Pantry Franchise stores save in 1979 and 1985, I have not been told so.
Moving on to 1985, Mr Anthony Brien and Mr Coner McCann both went to work in a Pantry Franchise branch of McDonald's in the Nutgrove Shopping Centre in Dublin on 7th January of that year. They were dismissed within a few days of each other, five months later, Mr Brien on the 19th June and Mr McCann on 29th June.
The written evidence of Mr Brien was that he worked at the Nutgrove Centre restaurant in Dublin from the 7th January to the 19th June,1985. He felt that he was unfairly dismissed on the 19th June. He was late for work that day and the manager called into the office and told him that he was being sacked for being late and sick. He was not given a verbal or written warning or any notice. His written statement which is in fact his form of claim for unfair dismissal to the Rights Commissioner in Dublin concludes: "This was used as a pretext to dismiss me because of my trade union activities".
The Right Commissioner investigated Mr Brien's claim at a hearing where Mr Brien was represented by an officer of the ITGWU and Pantry Franchise was represented by an officer of the Federal Union of Employers, who claimed that Mr Brien had been dismissed because despite warnings he did not conform to the company's standards so far as personal hygiene and timekeeping were concerned. It appears that at the hearing Mr Brien claimed that he was dismissed because he had encouraged other employees to join the union. The Rights Commissioner's Recommendation was: "(Mr Brien's) timekeeping record gave the company substantial grounds for dismissing him but they were unable to define the arguments on union activities for want of a key witness. For that reason I have to find that the dismissal was unfair but because of his own contribution to it I am recommending £250 in compensation".
Mr McCann's statement, adduced in evidence under the Civil Evidence Act, said that he was promoted to the Crew Training Squad but then joined the ITGWU because there was a need to improve conditions for workers in the store. Thereafter he was demoted and given menial tasks. Eventually he was dismissed, allegedly for changing his work schedule although the manager had agreed to him arranging for another crew member to work a day when he was unable to work.
Mr McCann considered that the grounds given for his dismissal were a pretext and he made a complaint to the Rights Commissioner, represented by the union. His case was heard immediately after Mr Brien's and again the Rights Commissioner recorded that his claim that he had been dismissed because he had encouraged other employees to join the union was not refuted because the company could not bring a key witness to the investigation. The Rights Commissioner recommended compensation of £600.
The recommended compensation was paid to both men.
The missing witness was the manager of the store, Mr David Trimble. It was he who dismissed both men. He had left his employment unexpectedly according to Mr Mehigan, before the hearings. It was suggested to Mr Mehigan that he had cause to be pleased that Mr Trimble could not be called to give evidence, but I do not accept this allegation.
I see no reason to doubt Mr Mehigan's evidence that Mr Trimble did not inform him of the dismissals and that he did not tell Mr Mehigan of the first letter from the ITGWU, written on behalf of the dismissed men. I thought that Mr Mehigan made a candid concession when he said that it crossed his mind that Mr Trimble was not coming clean with him about the true reasons for the dismissals because he did not tell Mr Mehigan of the first letter from the union, and that it was possible that Mr Trimble had dismissed the men for union activity.
My finding on the allegation of sacking or victimisation for union activity in Dublin are that Mr Macken was dismissed because he had been violent and threatening in the course of union activity, not simply because of involvement in union activity.
Ms Casey's lobby hostess post was abolished because it was not justified in the low period of the strike. But Mr Mehigan did nothing to encourage Mrs Casey back. He was content that she should not return in the light of her union activities, and I have no doubt that she lost her employment with Pantry Franchise because of her union activities. Happily the experience has not done Mrs Casey any harm. She has gone on to much better things.
I consider that Mr Mrozek was an honest witness but ready to believe the worst of McDonald's. I believe that he was picked on over the crew room and drink before work incidents, and I believe that was because of his part in the strike. There must have been a "them " and "us" feeling between those who had been on strike and those who had worked on. That would only be human nature. Feelings had clearly run high during the strike. But I do not believe that Mr Mrozek was driven out for his union activities after his reinstatement. By then he was at college and working part-time, and I believe that he left of his own accord. He too went on to better things.
However, I do not consider that it was Mr Mehigan's general policy, let alone that of the First Plaintiff, to sack or victimise strikers.
There were other strikers who went back to work in September,1979, about whom no complaint of victimisation was made.
I consider that Mr Brien and Mr McCann were dismissed, in part at least because of union activities. But I do not consider that Mr Mehigan played any part in their dismissal or knew of them until after the event. He told me that he would have reprimanded the manager if he had known. On the other hand he did not offer the men their jobs back when the union took up their cause, and I think that he preferred to pay them compensation.
I was told that the 1979 strike fell in a time of troublesome labour relations in Ireland and I believe that "McDonald's" were even more wary than usual of the possible consequences of unionisation of Dublin stores.
Mrs Casey described the two people who came over from the U.S.A. in 1979 (Mr Stein and Mr Copeland in fact) as "trouble shooters" and I have no doubt that was an accurate description.
I believe that Mr Mehigan wanted nothing to do with the ITGWU if he could avoid it, and that Mr Trimble among others had got the message.
I am unable to say whether the apparent lack of involvement of the ITGWU after 1979, save for a slight interlude in 1985, was caused by employees of Pantry Franchise becoming demoralised or losing interest in the union or by the union losing interest in them, possibly believing that any productive relationship with Mr Mehigan was unlikely, or because Pantry Franchise's pay and working conditions were as good as the union could expect in the catering industry, or for some other reason.
The fact is that there was no evidence before me that union membership or representation improved the lot of crew working for Pantry Franchise save that it provided support for Mrs Casey, Mr Brien and Mr McCann when they claimed that they had been unfairly dismissed.
Mrs Casey told me that her next workplace after leaving McDonald's was a unionised hotel and that pay and conditions were much better than at McDonald's. But she disclosed a clear antipathy to the McDonald's culture as she saw it; her evidence on this point came without notice. I have no details of pay and conditions at the hotel and I am quite unable to draw the conclusion that conditions, if they were superior to McDonald's, were due to union intervention.
When the 1979 strike began, the starting rate for Pantry Franchise crew was 85p (Irish) per hour, which was the minimum legal rate for areas outside Dublin. There was no minimum rate for Dublin itself because the problem of low pay was seen by the government to relate to areas outside the city. Performance rises of up to 12p were given from time to time, and Mr Mehigan said that the average rate of pay for McDonald's hourly paid workers was £1.04 per hour. Overtime of one and a half times the normal rate was paid for hours worked over 40 and there was a night work premium. Mr Mehigan said that these rates of pay were equal to or better than those paid by similar establishments. It was suggested to Mr Mehigan that he gave crew, including pickets, rises in order to dissuade them from supporting the union and there was evidence that some pickets were given rises in February or March,1979, but in my judgment there is no reason to believe that these were other than normal periodic reviews.
Mr Sean Mrozek told me that he thought that the wages he received at O'Connell Street were "pitifully low". After forty hour week including late hours, he took home £26 in 1979, when he was nearly twenty one. Pay, however, was Mr Mehigan's responsibility, not that of the First Plaintiff.
A suggestion of breaches of the Young Persons Employment Act came from a newspaper cutting but no evidence was adduced to support it and Mr Mehigan's evidence was that he recalled some complaint and that Ministry of Labour inspectors visited in about July,1979, but no violations were found.
There are collective agreements involving McDonald's companies or franchisees in a number of European countries and the written statement of Mr Stephen Copeland, Vice President of Personnel for McDonald's Development Company (MDC) who has worked for the First Plaintiff since 1974, rising to Director of Domestic and International Field Personnel until he went to MDC, said that it was the First Plaintiff's philosophy to adopt the laws and practices in each country in which it operated, so it would negotiate with trade unions in each country where it was obligatory or customary to do so.
The Defendants sought to cast doubt on this by calling evidence or cross-examining Mr Stein on events in a number of countries, and the Plaintiff produced same evidence, mostly under the Civil Evidence Act, in rebuttal.
The Defendants suggested that there was trouble in Denmark during the 1980s with McDonald's trying to resist any collective agreement and providing, in the staff handbook, that making a statement to a trade union was grounds for dismissal. The only evidence came from the Plaintiffs, to the effect that there was no statement in any handbook as suggested; that the union in Denmark originally wanted no one to work less than fifteen hours a week which would have involved the franchisee sacking a lot of his student workers who did not want to join the union anyway; that some agreement was eventually reached and that McDonald's Restaurants S/A is now part of an employers' association which has a collective agreement with a union.
There was evidence that before 1986 the relationship between McDonald's Deutschlande Inc and the relevant German union was not good. A number of conflicts were fought out in the media. Things have improved and the evidence was that by 1993 relationships were satisfactory.
It was common ground that in 1979 an individual in the Personnel Department of the German company sent out a memo to Store Managers advising them not to hire trade union members. The best evidence, however, from Mr Copeland, was that he did this without the company's authority. He was removed from his position in the Personnel Department and transferred to Operations. He left McDonald's two years later.
Mr Stein was cross-examined about the sacking of four men who worked at McDonald's restaurant in the Gran Via in Madrid in 1986. He said that the restaurant was one of eight owned by a joint venture partnership between the First Plaintiff and Senor Camillo Mira. The First Plaintiff had a financial stake and provided consulting services. Sr Mira was responsible for the day to day running of the restaurant.
Sr Mira sacked four employees who wanted to have a union election. He did not consult the First Plaintiff before he did so. Mr Stein learned of it through the media and he telephoned Sr Mira who said that the employees had caused a disturbance in the restaurant and that his local lawyers had advised him that he had a legal right to sack them. Mr Stein thought that Sr Mira should not sack them because the disturbance had arisen out of shouting that there should be a union vote among the crew. Mr Stein thought that the sacking could be construed as sacking over union activity. He thought the men should be reinstated and the vote taken. But Sr Mira followed his local advice.
Mr Stein flew to Madrid. By the time he got there, the Madrid Labour Court had decided that the men should be reinstated and that there should be union elections. Mr Stein advised Sr Mira to reinstate the employees and change his lawyers. The men were reinstated and union committees were elected. They are still in existence there and at other McDonald's restaurants in Spain.
As far as Mr Stein, speaking for the First Plaintiff, was concerned, that was a satisfactory conclusion to the affair. I accept Mr Stein's expressed view as genuine. He made no bones about what he clearly saw as the error of Sr Mira's ways. Mr Morris complained that the First Plaintiff took no action against Sr Mira. Mr Stein saw no need for that; nor do I. Sr Mira agreed with Mr Stein's advice in the end, and a number of witnesses speaking in different contexts said that is the way that the First Plaintiff goes forward after mistakes by owner operators; by acquiescence to new practices rather than by disciplinary action.
There was some live evidence from Norway.
Mr Thomas Jensen said that he started working at a McDonald's store in Norway, in Oslo, in 1988 when he was sixteen. He became a Swing Manager two years later. He was still working there when he gave evidence in November,1995. He had been head union representative at the store since December,1993.
Mr Jensen said that there was resistance from McDonald's to a collective agreement with the hotel and restaurant workers union. It attracted press attention because most Norwegians consider an agreement between workers and management uncontroversial and essential to secure workers' rights.
Eventually agreement was reached between McDonald's and the union in December,1993, under threat of a strike and pickets which suppliers would not cross.
Thereafter Mr Jensen was banned from the restaurant outside working hours. The Plaintiffs' written evidence was that he was found behind the counter when not working. Mr Jensen said that the collective agreement improved pay and conditions in various ways. The extent of this was disputed.
Mr Jensen made various other allegations, as did two other defence witnesses whose statements were read. They were mostly denied and do not advance the case.
The Defendants' pleaded particulars of justification alleged that in 1984/5 the three main union activists in what was then the only McDonald's store in Norway were obliged to leave, and told to keep away, and new staff were told not to join the union. This was the most serious and relevant allegation in relation to Norway.
No evidence was called to support it and one of the written statements of Mr Theo Holm, Managing Director of McDonald's Norge S.A. said that he was in charge of the store at the time and as far as he was aware no such incident occurred. He said that all employees were entitled to join unions.
The most serious allegations related to France.
M. Hassen Lamti came from Lyon to give evidence. He said that he went to work as a crew member at a franchised restaurant there in 1989. He was made Manager de Zone (Floor or Swing Manager) in 1990, which post he still holds.
He received various awards for his work until 1992 when he was made staff representative. This surprised him until he was told that it was to convince the official inspectors that a staff rep existed and to give them statements written in advance by the manager.
Nevertheless M. Lamti complained about various malpractices and when the management took no notice he started a petition. A supervisor told him to stop circulating the petition or he would be sacked. He decided that he had nothing to lose by setting up a section of the CFDT union at the restaurant and in October,1992, he was designated its representative/steward for McDonald's, Lyon.
Some time after that the McDonald's Lyon Region franchisee, M. Michel Antolinos, told M. Lamti to attend a meeting where he was asked why he wanted to be a union rep. He said that he wished to allow the employees to be represented and to have their voices heard.
M. Lamti said that M. Antolinos then proposed that he be moved to another restaurant or be sacked but with generous financial rewards. M. Lamti refused and by his account his working conditions were changed for the worse in a number of respects. He was falsely accused of taking sick leave and working elsewhere, of making bomb threats and of being involved in a hold-up at the restaurant.
Nevertheless he was voted top in the election of staff representatives.
Various legal proceedings followed and managers were prosecuted for hindrance of union rights although the prosecution has been shelved due to a Presidential election amnesty. Inspectors came from the Department of Employment to supervise the companies running the Lyon stores and to make sure that they were applying the law, and working conditions have improved as a result.
M. Lamti said that "McDonald's France" was aware of what happened. Indeed M. Antolinos gave up his various franchise companies, one for each franchised store, and became Managing Director of McDonald's France on the 1st January,1994.
M. Lamti said that he wrote to Mr George Brown who was Executive Vice President of McDonald's France S.A., in charge of Human Resources, on 22nd October,1992, and received a reply dated 3rd November,1992, as follows: "I have received your letter dated 22nd October,1992. Following this letter, I have contacted Michael Antolinos, who has informed me about the current situation. Within the framework of our normal relations between ourselves, McDonald's France, and our franchisees, we do not wish to involve ourselves in the affairs which only concern the franchisees and their employees. Our only concern is to make sure that the law is perfectly applied throughout our restaurants. I am sure that this is the case in the restaurant of Vilpaix. I can but recommend that you re-approach Mr. Antolinos to re-discuss your problem ......". Vilpaix was the franchisee company for the restaurant where Mr Lamti worked.
M. Lamti said that he knew that McDonald's France had not taken any steps to ensure that the employment laws were applied in Lyon, because he knew from meetings of union delegates that the same problems occurred elsewhere in France.
The written statements of Mlle Chantal Villeneuve-Gallez who has been a Zone Manager at another McDonald's in Lyon since 1991, said that after standing as a CFDT candidate in the election of staff representatives in May,1993, she was assigned to duties incompatible with her position of responsibility and discriminated against in other ways. Nevertheless, various conditions of employment had improved since the arrival of the CFDT, and dialogue between employer and unionised members of staff had been reinstated so that all requests and problems were discussed and rapidly resolved.
I find it particularly difficult to assess the Lyon evidence. Counsel for the Plaintiffs accused M. Lamti of a tissue of lies about M. Antolinos, and of theft and the threatening and intimidation of witnesses in France. M. Lamti denied all this and said that such allegations were just an attempt to discredit him. Counsel for the Plaintiffs presumably had instructions to entitle him properly to put the allegations to M. Lamti, but he did not call any evidence to support them. He gave an explanation for not calling evidence, to do with an embargo on calling French witnesses imposed under French law by the existence of French legal proceedings, but I cannot speculate about any of that. The only Plaintiffs' evidence on France was a 1993 statement by Mr Brown dealing with allegations about Montpelier and Marseilles, which were pleaded but did not ultimately feature in the case. His statement, taken early, did not deal with Lyon which was not pleaded but did feature.
M. Lamti made a reasonable impression as a witness and he had some very general support from limited documentation and Ms Villeneuve-Gallez, and I really must put the allegations in cross-examination to one side when they were denied by M. Lamti and there was no evidence to support them.
Experience time and time again teaches one that one must hear both sides before reaching a confident decision, especially on serious allegations. There is seldom one side to a story. But I have to make a decision on the balance of probabilities on the evidence which I have heard. On that basis I find that at least one franchisee in France, anyway, discriminated against M. Lamti and M. Villeneuve-Gallez in the course of their employment, because of union activities, and that McDonald's France S.A. did not make any real effort to clear this up.
Where that takes me, if anywhere, is another matter.
It was accepted that in Iceland McDonald's licensee refused to negotiate directly with trade unions over pay and conditions and refused to deduct union dues direct from employees' wages but it was denied that this was illegal. In due course the licensee joined a confederation of employers and thus became bound by a minor agreement to withhold union dues. It has done so.
Some of the Defendants allegations served only to elicit evidence favourable to the Plaintiffs.
Allegations concerning McDonald's in the Netherlands for instance were denied. The evidence was that McDonald's relations with the relevant union there are extremely good.
Other countries were touched on but the evidence was too secondhand to help or fell on neutral ground.
My conclusion so far as the Plaintiffs' attitude to unionisation of crew in their restaurants are concerned is that they are strongly antipathetic to the whole idea.
The First Plaintiff has always had a very real fear that union representation of any part of its workforce will detract from its control of its business. Its system of operation depends upon carefully planned uniform practices in all its restaurants.
The Second Plaintiff, its wholly-owned subsidiary, has inherited this attitude and shares it. The position is the same so far as franchisees and owner operators or subsidiaries are concerned in countries where union employer contracts are not compulsory or customary in the catering industry. That is the picture built up convincingly in my mind by the specimen case histories put before me and the attendance of Mr Stein the First Plaintiff's principal labour relations executive at focal points and occasions of union activity in the U.S. and around the world, and the attendance of Mr Nicholson, the Second Plaintiff's principal labour relations executive at similar sites and occasions in the U.K. It was confirmed by what Mr Preston who started with his career in McDonald's in the U.S., said to Mr Pattinson in May,1990, and by what Mr Nicholson had said to Mr Pattinson in December,1986, and by Mr Stein's perception that union contracts were alien to what McDonald's sees as its pay for performance ethos.
Having said this I am equally sure that there has been no real or general interest in unionisation from McDonald's crew in the U.S. for many years. There has been no real or general interest in the U.K. at all.
Moreover, I accept that it is the real policy of the First Plaintiff, its partners, franchisees and subsidiaries to observe labour relations laws and conventions in the countries where they involve union representation of McDonald's crew.
There have been occasions where McDonald's crew have lost their jobs or been victimised for union activity. Dublin and Lyon are examples. But the examples are minimal in comparison with the very large number of McDonald's operators.
Neither Plaintiff has a policy of preventing unionisation by getting rid of pro-union workers as the leaflet alleges. The Defendants have not produced any evidence which comes anywhere near proving such a policy. I accept the Plaintiffs' evidence that there is no such policy. The allegation is untrue.
Nor does either Plaintiff have a policy of victimising pro-union workers in any way short of loss of employment.
The leaflet specifically refers to workers from ethnic minority groups "who, with little chance of getting work elsewhere, are wary of being sacked - as many have been - for attempting union organisation". Although the leaflet refers to this as a difficulty in the 'kitchen trade' it is clearly meant to and does smear McDonald's because they are part of that trade and the leaflet immediately goes on to say make the allegations that McDonald's have a policy of preventing unionisation by getting rid of pro-union workers. The Plaintiffs cannot rely on this charge specifically because they did not plead it specifically, but it is as untrue of McDonald's crew from ethnic minority groups as it is of crew generally.
The Defendants made no attempt to prove that McDonald's companies have sacked many or any workers from ethnic minority groups, for union activities. Mr Stein was very upset by it and I accept that it is totally untrue.
Although the leaflet does not charge McDonald's with discriminating against women on the grounds of sex or against black people on the grounds that they are black, I should say that there was hardly any evidence of discrimination.
Mr Whittle said that the Sutton restaurant was blatantly racist when he was there between 1983 and 1986 despite the presence of Asian, black and oriental managers. The demonstration of this was that Asian and black male staff were nearly always cleaning the toilets or on litter patrol. He also said that the Store Manager wanted women, the prettier the better, to operate the tills, especially on Saturdays, to encourage male custom.
Mr Bhanulal Patel complained to an Industrial Tribunal that he had been discriminated against on grounds of race by being transferred to a restaurant where he did not want to work and then being dismissed when he refused to go there. The manager concerned provided a Civil Evidence Act statement denying any racial motive.
Lynval from Kentish Town was apparently of Afro-Caribbean ethnic origin and he said "no one has ever held my colour against me. As far as I can see McDonald's says it is an equal opportunities employer and I think it really is".
No doubt there are individual manifestations of racial prejudice from time to time in McDonald's restaurants but the totality of the evidence overwhelmingly supported the Plaintiffs' contentions that they are equal opportunities employers
There was some attempt by the Defendants to show that only a small proportion of the highest management of the First Plaintiff came from ethnic minorities, but the evidence as completely inconclusive.
The Defendants relied upon crew "turnover" figures in both the U.K. and the U.S. to support their contention that pay was poor and working conditions were bad. They set out to show that many crew leave their jobs at McDonald's after only a few weeks, or even earlier and they argued that the obvious reason for this was the bad pay and conditions because conditions are so bad.
The Plaintiffs accepted that turnover was high but they contended that this was because some crew took work with McDonald's as a temporary measure and that the figures were distorted by so many students and mothers with family obligations leaving and returning according to term and vacation time.
Mr Beavers put the McDonald's case succinctly when he said: "The composition of our employee base is we have part-time students, college high school students, we have housewives ...... We have full-time employees [of other companies] that want to moonlight or put another way wish to take an additional job to earn more money for their kids' education or what have you and when you look at people that are in transition they want to work at McDonald's while waiting for some other employment; and when you extract those numbers from the full-time base you dramatically lower the turnover percentage".
Mr Beavers said that in each of their restaurants they had a core of full-time workers who stayed a considerable time. Both Mr Beavers and Mr Nicholson said that very few crew left after only four, five or six weeks as was suggested. That was very unusual.
Mr Morris contended that the Plaintiff wanted a high turnover so that a larger proportion of crew would be on the basic, starting rate thereby, he said, reducing labour costs. But purposely keeping turnover high would require a significant number of patently unjust sackings or the contriving of bad conditions to drive crew away, with inevitable loss of morale, all of which is implausible in my view. Eventually Miss Steel argued that McDonald's were quite happy for crew to leave because it kept wage levels down and it made it harder for crew to unionise. But even this ignored the cost of more senior members of crew having to train newcomers in the various tasks to which they might at any time be put in a restaurant and it ignored the fact that newcomers are bound to work more slowly.
Witnesses for the Plaintiff stressed that they were trying to get turnover figures down with a view to saving cost and increasing crew efficiency, and I accept the evidence to this effect since in my view it is commercially sound.
The First Plaintiff's Operations and Training Manual for 1990/91, which I took to be a model for this country as well as the U.S., had a section on "Retention of Crew" which read:
"Staffing and retention are closely related issues. Many problems are the by-products of understaffing. Understaffing puts additional pressure on everyone and results in frustration for management and crew.
Causes of Turnover
It is crucial to understand the reasons why people leave McDonald's. Some of the most significant reasons people give for leaving are:
The keys to retention and successful staffing are motivation and good communications. These skills are detailed in the Crew Communications section later in this chapter".
In my view this did not mean that the Plaintiffs accepted that the matters set out were the most common reasons for crew leaving, as the Defendants contended. They were significant so far as the retention of crew was concerned, because they were matters which management could do something about. What the section does demonstrate is the Plaintiffs' wish to retain crew if possible.
Mr Pearson understood from one leading, national hotel company that it cost 400 times the hourly rate to replace an employee. McDonald's is probably not as much, in my view, but it must be costly.
So what have the turnover figures been and have are they been high and substantially attributable to poor pay and conditions, despite McDonald's efforts to get them down?
In both Plaintiff companies turnover is calculated on an annualized, averaged basis and expressed in percentages. So if a particular restaurant has a payroll of 60 people and 120 names appear on the payroll in the course of the year the turnover is 100%, as if each of the 60 has left and been replaced once. A turnover of 200% is the equivalent of the whole payroll leaving and being replaced twice. In fact some of the 60 will have stayed for the whole year. Other members of the original 60 will have left and been replaced and their replacements will have left and been replaced and so on. Each time a person goes and a person comes it contributes to the figure which remains in calculation throughout the year, annualized as the year proceeds but giving a figure for each month or quarter of the whole year.
If a crew member who is a student, for instance, leaves a vacation job at McDonald's to go back to college, his name is removed from the payroll after a short time. If he then returns to the payroll later in the year, his name scores again towards turnover. In Ms Meade's words, if someone leaves and comes back, he counts as two, not one. Turnover does not reflect the number of different people on the payroll unless no one leaves and then comes back. It reflects the number of movements on and off the payroll compared with the bare number of people on the payroll.
Figures for each restaurant are entered into computers which are programmed to produce figures for individual stores and for the whole country on either a monthly or quarterly basis.
I was given a summary of the First Plaintiff's U.S. Monthly Crew Turnover figures for the years 1986 to 1993 (monthly but annualized). I will not set then out in full. The lows and highs for the years 1986 to 1993 were as follows:
The lowest figures were in the first two or three months of the year and the highest were in September and October. This would appear to reflect the fact of low turnover in the depths of winter and high turnover at the end of the summer vacation although I am not sure that there was specific evidence on the point.
A summary of the Second Plaintiff's Quarterly Crew Turnover Figures in the U.K. gave the following annualized figures:
So generally speaking the highs for each year came down as the years passed.
Ms Meade said that there were a number of factors in the fall including the economic climate which made people more reluctant to leave the job they were in and the presence of more experienced, trained managers in the company's restaurants.
Notwithstanding the reductions the turnover remained high, in my judgment, throughout the years in question.
In the U.S. the figures are the equivalent of every crew member being replaced between about once a year and about twice a year at the time of relevant publication and rather less than once a year and about one and a half times a year between 1991 and 1993. Accepting Mr Beaver's evidence that each restaurant had a core of full-time workers who stayed a considerable time means that the turnover figures for the remainder of mostly part-time workers must have been even higher than those which I have set out.
In the U.K. the figures are the equivalent of every crew member leaving and being replaced nearly twice in the year in 1989 and 1990, coming down to still being replaced once a year, of just over, in 1992.
Counsel for the Plaintiffs stressed figures which showed that at the end of the first quarters of 1994 and 1995 (the figures for earlier years were not available) the percentages of current U.K. crew members, who had worked for McDonald's for three months or more were 86% and 84% respectively. The percentages who had worked for six months or more were 64% and 61%, and the percentages who had worked for a year or more were 47% and 44%. The figures for those who had worked less than two months were 11% and 13%. There were no comparable figures for the U.S.
Counsel submitted that "those figures do not suggest that thousands are fleeing in repugnance at the low wages and bad conditions".
I accept that, put as it is in graphic language, and I accept that the figures tend to support Mr Nicholson's evidence that very few crew stopped for less than five or six weeks. But if just under half of crew stay for a year or more, the other half must turn over quite often to produce a turnover figure over 100% (in 1993, the nearest available year to 1994 and 1995).
Mr Pearson said that the hotel and catering industry was bedevilled by high turnover. He referred to the report of an employee sample survey in U.K. restaurants in 1992 to 1994, which showed an annualized turnover rate of 35.4%, whereas turnover in the industrial catering sector, for example factory canteens, was 13.6%. I note that the figure for pubs and bars was 33.6% and hotels 33.1%.
Mr Pearson said that the fast-food industry was included within the restaurant percentage, yet McDonald's turnover was much higher than the restaurant sector average.
With a view to showing that factors which had nothing to do with pay or bad working conditions caused crew to leave the Second Plaintiff's employment, an abstract of the information obtained from crew when leaving was produced. It covered the period from April to December,1992. It carried thirty-four reasons for leaving, numbered according to the code used by managers for crew members' files when they left. About 6% only had said that they were dissatisfied with something or other, but a total of 22% left without notice or just did not return, which might mean dissatisfaction. 23% left to return to school or college, and 5% left at the end of temporary employment, and 2% were transferred out of the U.K., which makes it look as if at least 30% left for reasons which probably had nothing to do with pay or conditions, in my view. 23% left for personal reasons and the leaving of 7% was "mutually agreed". That 30% could cover both leaving because of changes in circumstances beyond McDonald's control, and leaving because of dissatisfaction which the crew member was reluctant to express.
All the figures are, of course, dependant on the crew member giving an honest answer and in my view it is only too easy to imagine a crew member who has not liked the work, but who has nothing against the questioning manager, giving an inoffensive reason for leaving.
The figures do support the Plaintiff's case that the fact of returns to school and college particularly, and the fact that some crew only come to McDonald's on a temporary basis to fill gaps, have a significant influence on turnover, and there will always be some people who will leave a job because they are dissatisfied with the pay and conditions, even if the pay and conditions are perfectly reasonable by any objective standard.
However, I do not believe that these matters can completely explain the large turnover and the relatively brief stays of a few months by something like half of all crew members.
Mr Pearson said that any reasonable commentator would agree that the fact that McDonald's has a labour turnover which was much higher than the industry average was in part due to the age profile and the career profile of the workforce, but there was a tendency towards the employment of younger workers in the catering industry generally. One in three school leavers would find their first job in catering.
Even with the high proportion of young crew which McDonald's has (but with just 23% of them leaving in the April to December,1992, period which included the end of the long summer holiday, and possibly the Easter holiday too) and even allowing a considerable extra loading for mothers and people in transition, McDonald's turnover is high by comparison with the industry of which it is part, in my view.
My conclusion is that a significant proportion of McDonald's crew do not judge the pay and conditions good enough to make them want to stay for long. They either come to McDonald's with that view and retain it, or they form it while they are there.
Such a view is no doubt partly the result of the pay being low rather than the other conditions of employment being bad, although from the figures I was given pay is pretty low in the industry generally. The high turnover does not prove that working conditions are positively bad, in my view.
I appreciate that if the high turnover in the U.K. is at least partly the result of low pay, the high turnover in the U.S. might well be attributable to low pay there also. But there may be factors which affect turnover in the U.S. which do not apply here. Mr Beavers mentioned moonlighters for instance. They were not mentioned in the U.K. There may be even more student workers and leavers. I still feel that the picture of U.S. pay is too unclear for me to find that the First Plaintiff's pay in the U.S. is low. I had no equivalent of Mr Pearson or of the New Earnings Survey for the U.S. It may well be that the First Plaintiff's pay is low, but the Defendants have not proved it to be so.
Having considered the question of turnover I can give my conclusions on all the main issues raided on the Plaintiffs' employment practices, some of which I have already indicated as they relate to the defamatory statements in the leaflet.
My conclusions are as follows.
The Second Plaintiff does pay its workers low wages, thereby helping to depress wages for workers in the catering trade in Britain. To this extent the defamatory charge in the leaflet is partly justified.
It may be that the First Plaintiff also pays its workers low wages, but the evidence is insufficient to prove that this is so.
Despite the Second Plaintiff's low wages it is not true to say that it is only interested in recruiting cheap labour and that it exploits disadvantaged groups, women and black people especially as a result. Nor is this true of the First Plaintiff. Both Plaintiffs are interested in inexpensive labour, but they are also keen to have people who will work well and appear cheerful to please the customers. They treat women and black crew members the same as the rest so far as pay and other conditions of employment are concerned. They do not target them as cheap labour. They are genuinely equal opportunity employers.
So far as working conditions apart from pay are concerned the Plaintiffs' crew do work in the evenings and at weekends as alleged in the leaflet, but there is nothing bad about this; indeed it suits many employees.
While the statistical chances of significant promotion for the Plaintiffs' crew members are small, it is not true to say that chances of promotion are minimal. There is a real chance of anyone who is really interested moving to some level of responsibility but most people who work in McDonald's restaurants are not interested in significant promotion in their part-time jobs with McDonald's.
The work of a McDonald's crew member is hard and sometimes noisy, and it is hectic for significant parts of some shifts, for the whole of the middle of Saturdays in all restaurants and for a lot of every day in some particular busy restaurants. There are occasions of particularly intense pressure on some occasions when some restaurants find themselves short-staffed. All this appears to be the same in both the U.S. and the U.K.
It has been common for full-time workers at the Second Plaintiff's U.K. restaurants to work more than the so-called maximum 39 hours a week, but it has been unusual for crew to work more than 45 hours a week. As often as not, weeks over 39 hours have been worked willingly because crew have wanted to earn more money. 45 hours is not an unduly long week for McDonald's crew to work from time to time, in my view, even for someone in his or her late teens working hard for a lot of the time.
The significance of such weekly hours relates to pay (absence of an increased overtime rate in U.K. McDonald's and the need to work those hours to collect something like a decent wage) rather than to bad working conditions.
Weeks over 40 hours are less likely in the U.S. because of the requirement to pay overtime rates.
Double shifts or unduly long shifts have been comparatively rare in the U.K. I had no real evidence of them being common in the U.S., and they are less likely there because of the risk of running into overtime with its extra expense.
On the other hand it is not unusual to be asked to stay on after the end of a shift for a while, and there is a significant risk of substantial, unwarned extensions from time to time. I would expect the position to be much the same in the U.S., but modified by the need to avoid overtime costs.
Very late cleaning up "closes", sometimes going on through the night, have occurred from time to time in the U.K., but generally speaking they only occur on very few occasions each year for any one crew member. I would expect the position to be the same in the U.S., but yet again moderated by the need to avoid overtime if possible.
Proper breaks are subject to the demands of custom in the Second Plaintiff's restaurants. This means that they are often taken early or late in a shift, or cut short. Adequate drink breaks are not always easy to come by. The result is that crew can work hard for long periods without adequate breaks. I would expect the position to be the same in the U.S. because the pressures are the same.
There was evidence of young people working unlawful hours, but this did not in itself help me to decide whether conditions were generally bad.
The complete reverse of the practices to which I have just referred, is that from time to time U.K. crew are invited to go home early if a restaurant is quiet. Some crew agree to go but the very act of asking puts pressure on young crew to agree and there have been occasions when direct and unfair pressure has been put on crew to agree. Sometimes crew have been sent home for reasons, like an untidy uniform, which would not have bitten if the restaurant had been busy. If a crew member agrees to go home, he or she is not paid for the balance of the shift. This practice is most unfair as it deprives crew, mostly young, of pay for time which they have set aside to earn money at McDonald's. On the evidence before me I cannot say that it happens often but it should not happen at all, and in my judgment it shows where the ultimate balance lies in the Second Plaintiff's judgment, between saving a few pounds and the interest of the individual, often young employee. I had no direct evidence of the extent to which it happens, if it happens at all, in the U.S. However, it is the kind of systemic practice which is passed from an international holding company to its national offshoot, and on that basis I find that it probably happens in the U.S. too.
This must bear on job satisfaction, as must the fact that there are no contractually guaranteed hours from week to week, but both are primarily relevant to pay.
There have been instances of autocratic management in individual stores in the U.K. Although this does not surprise me with so many young managers working under pressure to provide fast service according to regimented procedures, the evidence fell short of showing that it was a standard characteristic of work in U.K. stores. The Defendants' case to this effect assumed a policy of breaking crew morale, which I found totally implausible. There was little evidence of the U.S. in this respect.
Because of the lack of union representation, there is no third party for any member of crew to go to in the event of a serious grievance relating to his or her employment by either Plaintiff, but generally speaking the Plaintiffs' system of Rap Sessions and Crew Meetings at which criticisms can be voiced and paid heed to, works, although some crew are suspicious of it. The Plaintiffs intend it to work.
Although one might expect that the pace of work at McDonald's, and the long hours on occasions, might lead to an element of risk, and although it has been thought necessary to improve the Second Plaintiff's safety management systems since the company appointed a Safety Officer in 1990 and voluntarily subjected itself to a Health and Safety Executive inspection and report in 1992, crew work in the Plaintiffs' restaurants is not unsafe or dangerous. People suffer minor burns as one would expect in any work involving kitchens and they suffer other injuries from time to time. But even the number of burns has not been extravagant and the number of serious injuries, including serious burns, has been modest. I was told of only one fatal injury to a crew member employed by the Second Plaintiff. Although that was one too many it occurred after eighteen years of operation in the U.K. There is no reason to believe that the safety picture is different in the U.S.
The Defendants made much during the evidence, although not in final submissions, of the Plaintiffs' insistence that crew should smile at customers. I could not understand their criticism. Many normal people greet strangers as well as friends with a smile anyway, and I do not see why a retail company should not expect its staff to welcome customers in that way. It costs the employee nothing, and the evidence that crew found it difficult was negligible. The Plaintiffs' keenness that crew should smile, which was common ground, to my mind shows that both companies want crew to appear cheerful to please the customer, and they are unlikely to achieve that if working conditions are bad.
Despite the hard and sometimes noisy and hectic nature of the work, occasional long, extended shifts including late closes, inadequate and unreliable breaks during busy shifts, instances of autocratic management, lack of third party representation in cases of grievance and occasional requests to go home early without pay for the balance of the shift, if business is slack, I do not judge the Plaintiffs' conditions of work, other than pay, to be generally "bad", for its restaurant workforce.
Although a number of the witnesses disliked the work, even some of those who came to Court with strong criticisms stayed in their jobs for quite a while. There was evidence that young crew liked the buzz of being busy together. One of the Second Plaintiff's big store managers, now a franchisee, agreed with responses to a crew questionnaire, which said that crew most liked the atmosphere and least liked the money. One of the Second Plaintiff's severest critics said that the satisfaction which he gained from the work was quite high, but the satisfaction from pay was non-existent. So there was the same picture from both ends of the spectrum of evidence.
The success of the restaurants of both Plaintiff companies has relied on smart, cheerful staff providing brisk service and it seems to me that it is inherently difficult to achieve this unless crew are reasonably happy at their work. I take full account of the indomitability of the human spirit in the face of adversity, but I find it difficult to see how either Plaintiff could have grown so fast in countries where there is a high expectation of living and working conditions if McDonald's working conditions had been truly and generally bad.
The First and Second Plaintiffs are strongly antipathetic to any idea of unionisation of crew in their restaurants but they do not have a policy of preventing unionisation by getting rid of pro-union workers as the leaflet alleges. That allegation is untrue.
The result of all this is that the message of this part of the leaflet to the effect that the Second Plaintiff pays its workers low wages, helping to depress wages for workers in the catering trade in Britain has been proved to be true. It is justified.
The message that the Second Plaintiff pays its workers low wages has not been proved to be true.
The charge that the Plaintiffs are only interested in recruiting cheap labour and that they exploit disadvantaged groups, women and black people especially, as a result, has not been proved to be true. It is not justified.
It has not been proved that the Plaintiffs provide bad working conditions. That charge has not been justified.
The charge that the Plaintiffs have a policy of preventing unionisation by getting rid of pro-union workers is not true.
The evidence has disclosed unsatisfactory aspects of the Plaintiffs' working conditions, and these are to be taken into account in assessing damages, but the real, general sting of low pay for bad conditions has not been shown to be true. It has not been justified.