1. I am Vice President and Ombudsman of McDonald's Restaurants Limited, which is a wholly owned subsidiary of McDonald's Corporation, which is incorporated in the United States of America.
2. I Joined McDonald's in 1983 as Security Manager. In 1984 I moved to the position of Manager of the Personnel Department and in 1985 was given the additional responsibility for the Franchise Department. In 1987 I was appointed Vice President with responsibilities for the running of Personnel, Franchising and Security Departments which position I held until 1992 when I became the Ombudsman for the Company.
3. Prior to joining McDonald's in 1983 I had worked in the police force and retired after 31 years service holding the rank of Chief Superintendent.
4. A copy of the pamphlet "What's Wrong with McDonald's?", a copy of which is attached to this statement at appendix 1 first came into my possession in 1987 when a demonstration took place outside McDonald's Head Office in East Finchley on 16th October. This was the third year in succession that an anti-McDonald's demonstration organised by Greenpeace (London) had taken place outside the Company's Head Office. According to the leaflet it is produced by Greenpeace (London) giving a postal address for the group of 5 Caledonian Road, N.1. with a meeting place at 6 Endsleigh Street, London, W.C.1.
5. Having regard to the fact that I considered the leaflet to be highly defamatory of the Plaintiffs I considered that it was in the Plaintiffs' interests to discover who was responsible for distributing this leaflet so that proceedings could be taken, if necessary, against those responsible to prevent further repetition. It was and remains my understanding that Greenpeace (London) is an unincorporated association which has no legal status and therefore cannot be sued in its own right. As a result it became necessary to identify members of the group responsible for the distribution of the leaflet who I considered were waging a campaign against the Plaintiffs aimed at destroying their business.
6. I therefore conducted my own enquiries which included visiting 5 Caledonian Road which was, and I believe still is, a bookshop on the ground floor with either offices or flats above. The bookshop in the main supplied books and literature of the protest type with left wing political views. I spoke to the staff of the shop but was unable to discover the identity of any of the distributors of the leaflet.
7. I obtained a further copy of the leaflet entitled "What's Wrong with McDonald's?" on 16th October 1988 when there was a further worldwide anti-McDonald's protest held by Greenpeace (London) outside McDonald's Head Office in East Finchley. On this occasion there were posters advertising the fact that the group was holding an anti-McDonald's Fayre on Saturday 29th October 1988 in Conway Hall, Red Lion Square, London, W.C.1. I visited the Fayre on that day with other members of the Company's Security Department. It was well attended and the leaflet, "What's Wrong with McDonald's?", was arranged in piles on a table at the Greenpeace (London) stall in the hall together with other leaflets. I observed many members of the public take this leaflet complained of and other leaflets on the table.
8. The following year on 16th October 1989 the annual worldwide day of protest against McDonald's was held outside the Company's Head Office in East Finchley by Greenpeace (London) advertising an anti-McDonald's Fayre at Conway Hall on 21st October. I observed the demonstration during the day by visiting it at intervals during the afternoon to observe proceedings for periods of about 10-30 minutes at a time. The demonstration took place outside the Head Office which is and was a busy thoroughfare. I recall that two demonstrators were handing out leaflets to the north of the building and two to the south of the building outside the East Finchley tube station. Two demonstrators stood on the other side of the road handing out leaflets and a further 2-3 persons stood outside Head Office handing out the leaflets. In all about 25 people attended the demonstration. Two or three participants were dressed up in 'Cow' outfits.
9. Wads or piles of the leaflet complained of were placed by the side of the building and those demonstrators who were handing them out picked up a pile of them at a time and distributed them to members of the public. My estimation is that several hundreds of leaflets were distributed that day to passers-by of all ages.
10. Prior to the demonstration I was able to learn the identity of two of the organisers, Paul Gravett and Helen Steel. I observed both Paul Gravett and Helen Steel distribute leaflets during the course of the afternoon.
11. Prior to the demonstration I had instructed the manager of the Company's Security Department to ensure that photographs were taken. From one photo I am able to identify Helen Steel as one of the demonstrators present throughout and who I personally saw distribute leaflets to a number of passersby.
12. Since by this time, i.e. October 1989, my attempts to trace and identify members of the group had proved unsuccessful and because it had been impossible to take effective steps to prevent repetition of the defamatory statements I decided and was authorised on behalf of the Plaintiffs to instruct two firms of enquiry agents to seek to identify the members of Greenpeace (London) and in particular the authors, printers and distributors of the leaflets complained of in these proceedings.
13. As a result of the enquiries undertaken on behalf of the Plaintiffs it has been possible to identify for the purpose of these proceedings those individuals involved with Greenpeace (London) who have taken part in the preparation or distribution of leaflets and who in the Plaintiffs' belief have been part of the anti-McDonald's campaign aimed at destroying the Plaintiffs reputation and business.
14. As Chief Personnel Officer at the relevant period I deal now with personnel matters raised in the pleadings which are within my personal knowledge. I adopt the numbering as set out in those pleadings.
15. By way of background in 1989 the second Plaintiffs ran approximately 350 restaurants in the United Kingdom with a work force of about 22,000. Of these some 2,000 are salaried staff, the remainder being hourly paid workers. Of these hourly paid workers about 20% are full time working 39 hours a week. The remainder work between 10 and 39 hours depending on their availability. In order to ensure the correct staffing of our restaurants thereby providing a level of quality, service and cleanliness necessary to attract and retain our customers we have to keep our pay and conditions of service commensurate with other high street traders. Currently we have approximately 480 restaurants with over 31,000 staff.
16. I do not accept the allegation in the Reply to Request for Further and Better Particulars of the Particulars of Justification fair comment (FBP1) that employees of McDonald's have to work extremely hard and yet the rates of pay are low worldwide. The Wages Council for Unlicensed Places of Refreshment set the minimum hourly rate of pay for all employees who are aged 21 years and above. For the period June 1989 - June 1990 this stood at £2.38 per hour for the basic rate and £3.57 per hour for the overtime rate for all hours worked in excess of 39 hours in any week. During the same period McDonald's starting hourly rate for most crew in the provinces aged 18 years was £2.38 for the hours between 7 a.m. and 7 p.m. For the hours between 7 p.m. and 11 p.m. the basic rate started at £2.58 and between 11 p.m. and 7 a.m. it was £2.98. This basic rate lasts for 21 days when their performance is reviewed following which they can earn 5p, 10p or 15p per hour increases. Their performance is then reviewed every two months and every other performance review is also a pay review when a further 5p, 10p or 15p per hour is awarded. In Outer and Inner London the starting rates for the same year i.e. June 89-90 are a) £2.50, b) £2.70 and c) £2.90, and a) £2.70, b) £3.00 and c) £3.20 per hour respectively. These rates are paid in certain provincial centres where there may be difficulty in recruitment. When the Wages Council sets its minimum the increase they set automatically is paid to all of our hourly paid employees irrespective of their current rate.
17. In addition to our pay rates all hourly paid staff receive free uniforms, free food, bonus payments, increased rates for Bank Holidays and they accrue holiday pay. After 1 year's service they benefit from a non-contributory group life insurance scheme and after three years' service are given free private medical care. After a short qualifying period all hourly paid staff, taking a recognised course of education, will receive £50.00 towards the cost of their books. There is also a grant of £150.00 they can win, towards their general education costs - there is at least one such grant awarded to each restaurant. We also provide up to twelve scholarships a year to 2nd and 3rd year students taking a recognised business course with a grant of £1,000 per annum and current employees can apply to be considered.
18. For the year June 1992/1993 the wage rates at McDonalds for crew 18 years and over in the provinces is £3.00 min - £4.50 max between 7.00 a.m. and 7.00 p.m. and £3.15 min and £4.75 max between 7.00 p.m. and 7.00 a.m. In Outer London the rates are £3.05 min - £5.05 max between 7.00 a.m. and 7.00 p.m. and £3.30 min - £5.30 max between 7.00 p.m. and 7.00 a.m. In Inner London the rates are £3.30 min - £5.40 max between 7.00 a.m. and 7.00 p.m. and £3.55 min and £5.65 max between 7.00 p.m. and 7.00 a.m. The current minimum wage for the same period 1992/93 is £2.92 per hour for the basic rate and £4.38 for the overtime rate.
19. In the pleading entitled Further and Better Particulars of the Further and Better Particulars of Justification and Fair Comment pursuant to a Request dated 3rd November 1992 ("FBP2") the Defendants cite specific rates of pay paid by McDonald's in Britain for specific years which rates relate to crew members pay. However there is an inconsistency as the minimum prescribed rates cited for the years 1986 and 1988 relate to management rates of pay which are not applicable to crew members.
20. In the case of salaried staff in 1989 a trainee manager starts on £8,000 per annum and a restaurant manager can earn over £20,000 per annum. Above each store manager, apart from franchisees, we have supervisors, operations managers, market managers and regional managers with salaries going well beyond £50,000. Currently this figure exceeds £75,000. All senior operations posts are filled from within as are many posts in support departments. Salary scales are reviewed annually and additionally a performance review is carried out annually at which increases of up to 15% can be granted.
21. The salaried staff benefit package includes an annual bonus scheme, a stock ownership option programme, a pension scheme, free private medical cover, a telephone account contribution, a fully expensed car for managers and above, 4/5 weeks holiday on full pay, a 90 day Sabbatical after 10 years service, a group life insurance scheme and a meal allowance. Finally there is a President's Award Scheme in which the top 8-12 performers each year are recognised with a prestigious award and a bonus of one third of the member's salary.
22. Promotion in McDonald's is encouraged. A crew person will join with a 'green badge' indicating he or she is a rookie. After 21 days this exchanged for a yellow badge on which each crew member can earn recognition stars. When they are sufficiently competent in all positions they can become a member of the training squad which trains new employees. From among the training squad will be selected floor managers. This is an hourly paid position but is part of the management team and provides a good resource for salaried managers. In 1989 of 245 salaried managers 89 or 34.9% came from crew. Of the 569 2nd assistants 51.7% came from crew; of the 345 1st assistant managers 58.6% came from crew; of 327 managers 51.4% came from crew; of 87 supervisors 33.3.% came from crew and of 21 senior supervisors 33.3% came from crew. The company President, Paul Preston, started work in McDonald's in the United States as a crew person. Promotion is open to every person joining McDonald's.
23. Hourly paid workers in McDonald's have flexible hours chosen by them which are observed as far as possible subject to the requirements of the restaurant. In all restaurants Managers try to accommodate the requests of hourly paid staff with regard to their working hours. Because there is no contractual number of hours which staff are required to work no overtime is appropriate. However, as I have stated enhanced rates are paid for 'anti-social' hours which mean that all staff over 21 years are paid at or above the minimum wage.
24. Wages Inspectors regularly visit the company's payroll department to examine payroll records to ensure that staff are not paid less than a minimum wage and for breaches of regulations. I personally have been interviewed by the Chief Wages Inspector for our area about five years ago in 1988 to discuss our employment practices and procedures. On that occasion he expressed complete satisfaction with what he and his officers had found. He was very supportive and complimentary of the Company's practices and procedures.
25. Nonetheless, staff are discouraged from working in excess of 39 hours per week and the position is carefully monitored. Naturally, in events of sickness or 'no shows' staff may be asked to work in excess of 39 hours when they will be paid at the appropriate rate but these occasions for each individual should be no more than occasional.
26. Salaried staff are on a contractual salary and are expected to work the contractual 39 hour week. Certain secretarial and reception staff volunteer to cover positions outside working hours and are paid overtime.
The statement by Joanna Blackett accurately reflects the Company's position.
27. It is incorrect to say that McDonald's is hostile to Trade Unions as stated in FBP1 and 2.
28. In the 9 years I was Head of Personnel on only 3 occasions have employees questioned me about unions which was at East Ham in about 1986 (as recorded in FBP2 page 7 letter X); in Hackney (FBP2 page 8 letter Y) and in Liverpool in about 1986.
29. The Company's position on Trade Unions is that we will not and indeed cannot prevent anyone from joining a union. However, our principle is that of communicating with staff direct and we have provided them with several means of representing their views.
30. The major means of communication is a rap session. This is where nominated members of the crew meet with a supervisor from another region and not in their chain of authority, or perhaps a field personnel officer, and discuss how the restaurant is run, equipped and organised. They review the management team and make whatever criticism and/or suggestions to improve the restaurant. These comments are recorded and displayed for all staff to see. The management team will then discuss the points raised and agree a plan of action. They then call a crew meeting to which all members can attend and they advise them of their action plan and invite discussion.
31. Each crew member is given a copy of the crew handbook and amongst the information the company's grievance procedure is explained. We have an 'open door' policy and any member of the staff can ask to see any senior member of the company.
32. We have no policy of preventing unionisation by getting rid of pro-union workers as alleged. In my time with McDonald's no person has ever been dismissed for being pro-union or being a union member.
33. Turning to the specific allegations in FBP2, the first is at page 7, (X). At East Ham I recall that I was informed by the Store Manager that there was an attempt to get together a number of crew members to Join the Transport & General Workers Union (TGWU). It was my view that if the staff were considering joining the union there may be a problem with communication at the store and I therefore invited all interested crew to a meeting with me to discuss this issue, which meeting was to be held at the store. I attended the store for the meeting and on arrival there were about twelve crew members present in the crew room. I addressed the meeting by saying that the company would not and could not stop any member of staff joining a union although it reserved its right not to negotiate wages or conditions of service direct with any outside organisation. I explained that the company had provided a means of expressing any discontent or suggestions for improvements through the crew meetings and rap sessions and advised them that if they wished to join the union that was a matter for them. I recall the meeting was friendly and lighthearted and I recall that one of the twelve participants was Peter Sutcliffe who I believe was the son of a Transport and General Workers Official. No one was threatened with dismissal nor did I say anything which remotely gave the impression that staff would be dismissed if they joined a union. The meeting ended on a pleasant note and I recall that nothing further happened after that meeting.
34. At FBP2 page 8(Y), it is suggested that at our Hackney restaurant active members of the union were sacked following an attempt to organise the union in or around 1985. Again, I have a specific recollection of this event. At Hackney a very similar set of circumstances arose as at East Ham, namely a number of crew members considered joining a union. Again, I invited those crew who were interested to talk to me at a meeting at the store giving them advance notice of it and I attended with Ron Laurie of the Security Department as this was a store for which he has responsibility and he had other tasks to fulfil that day.
35. I recall eight or nine crew persons were present and I again addressed the crew saying that they had every right to join a union and McDonald's would not and could not attempt to stop them but that we preferred to negotiate direct with staff. Nothing further happened after this meeting.
36. No crew members were sacked after this meeting and in my view it is ridiculous to suggest it. If staff had been dismissed I would have expected an application to have been made by them to the Industrial Tribunal on grounds they were unfairly dismissed for Trade Union activities. No claim wan made following that meeting and no claim has ever been made in the United Kingdom on these grounds to my recollection, let alone succeeded. As Head of Personnel I would have been told if anyone had been dismissed following that meeting.
37. In FBP1 on page 7 paragraph E it is suggested that McDonald's refused to allow the Transport Workers Union to negotiate on behalf of its workers. I have no recollection of the TGWU being refused to negotiate and I consider the allegation is too unspecific to be able to trace any incident, if it occurred. I have no recollection of talking to a journalist from the Daily Mirror and certainly I did not and would not say that the company discouraged staff from joining a union as this is not and has not been my or the company's position. The only occasion on which I recall speaking to a reporter with regard to the company's position on Trade Unions was to a journalist from the Radio 4 programme "Today" and the conversation was on the telephone. On that occasion I explained the company's position which I have set out above.
38. In FBP2 at page 7 letter V, it is alleged that McDonald's refused access to a TGWU official. I have a very clear recollection of the nature of this incident.
39. In about 1987/88, the exact date I do not recall, I was approached by a TGWU official, whose name I do not recall, who rang the office and asked for permission to distribute literature to our staff. I explained to him that I had no right nor did I wish to refuse permission for him to stand outside the store and distribute literature but I would not give permission for him to enter our premises and address the crew on the premises while they were working. Neither was I happy for him to address them in the crew room during their break times as their breaks were meant to give the crew a rest and allow them to have refreshments. However, I said he had a perfect right to distribute literature outside the store. The Union Official appeared to accept the position. I recall that after the conversation he did attend the Warren Street store and distributed literature outside it. He did not remain there very long and did not cause any disruption nor did he attempt to come into the store as I had explained.
40. I have no recollection about the incidents set out on page 7 of FBP2 at letters S, T, U, W.
41. In FBP2 page 4 (A), the Defendants rely on examples of Industrial Tribunals cases as evidence of bad employment practice within McDonald 's. Like any large organisation claims will be brought by employees who have been dismissed but the number of these are comparatively few.
42. In Industrial Tribunals no costs are recoverable by either party, win or lose. Therefore it becomes very expensive to defend every claim even when we consider the merits on our side to be very strong. Consequently in cases where the damages claimed are minimal or where there is no particular point of principle a small settlement may be made on commercial grounds as a nuisance value because it would be uneconomic to incur the costs of a full trial. Such settlements do not necessarily mean that the Company's behaviour is improper or unfair.
Breaches of the Shops Act 1950
43. It is alleged in FBP1 that McDonald's has broken the law relating to the employment of young persons including committing criminal offences under the Shops Act 1950. Two examples of these are set out in FBP1 on pages 5 and 6 relating to the Guildford and Slough restaurants and the third example is set out in FBP2 on page 3 relating to the Luton restaurant. It is correct that McDonald's on those occasions were found guilty of those offences but these are the only three occasions McDonald's have ever been prosecuted for such violations, two of which were in 1982 and the other in 1984. These were isolated cases and since that time the company has ensured that these untypical breaches have never reoccurred.
44. I took over the personnel department in 1984 by which time the offences had taken place. The company in the United Kingdom was young at that time and improved training practices and procedures were introduced to ensure that managers were made even more aware of their responsibilities to ensure there was no reoccurrence.
45. As I have stated in paragraph 24 Wages Inspectors regularly monitor the company's payroll and any breaches of the regulations would be identified and brought to the company's attention.
Newcastle bomb hoax
46. At page 5 (C) of FPB2 the Defendants make an allegation regarding a bomb hoax made by a Manager and another crew member in Newcastle in April 1992. It is untrue that any of the three persons involved were pressurised by the Company to make this bomb hoax or face the sack. So seriously did the Company treat this episode that all three were summarily dismissed.
47. The background details are as follows. Patima Heron joined the Company in January 1990 and held the position of Store Manager at Newcastle I Store. Lance Green was the Second Assistant Manager. Helen Calderwood was a Lobby Hostess.
48. In December 1991 without any direction or influence from the Company Patima Heron in conjunction with Lance Green encouraged Helen Calderwood to make a bomb hoax call to Burger King. This resulted in a letter of complaint from Burger King on 30th December 1991. By that time the matter was already under investigation in the Manchester region.
49. Because of the severity of the act of misconduct by Patima Heron she was summarily dismissed on 13th January 1992 after her behaviour was investigated by the Personnel Department. Whilst Miss Heron denied her involvement I understand that she received a sentence of six months' imprisonment imposed on 21st December 1992.
50. Lance Green was also involved in the incident as a result of which his behaviour was investigated by the Personnel Department. During those investigations he admitted discussing the bomb hoax with Patima Heron and with Helen Calderwood and was consequently summarily dismissed for gross misconduct. Mr. Green subsequently brought a claim against the Company before the Industrial Tribunal on grounds of unfair dismissal which application was withdrawn by him on 7th July 1992. Mr. Green was found not guilty following the prosecution of his case.
51. Miss Calderwood was also summarily dismissed on 13th January 1992 after she admitted making the bomb hoax call on the instructions of Patima Heron and Lance Green. In view of the fact that she admitted making this call on the Manager's instructions she was sentenced to do 120 hours community service.
52. The action taken by the three persons was completely contrary to any instructions and without the authority of McDonald's and indeed if the Company had encouraged such behaviour I would have expected that criminal proceedings would also have been brought against McDonald 's.
53. It is alleged in FBP2 on page 6 (0) that McDonald's are and were in breach of the provisions of the Disabled /, Persons Employment Act 1944. Although the allegation is unspecific I take it to mean that the Defendants are saying that McDonalds do not comply with the requirement under that Act and employ a quota (*currently 3%) of registered disabled workers.
54. If this assumption is correct then the allegation is untrue. Each year McDonald's has been granted a permit under the above Acts by the Department of Employment to engage people not registered as disabled. Nonetheless, the Company endeavours where appropriate, to consider sympathetically the engagement of suitable disabled persons.
55. Further, since 1991 McDonalds is also a member of the Employers Forum on disability.
56. At page 6,(R) of FBP2 the Defendants contend that McDonalds put pressure on branch management to keep labour costs below 15% of takings thus resulting in low staffing levels which puts undue pressure on employees to work at speed. This allegation is untrue in that no restaurant is pressurised into reducing labour costs to below 15%. Only in the highest volume stores could labour coats of 15% be achieved. The average labour costs are 18% for crew and 5%-6% for management, giving a total average labour cost of about 22%. If National Insurance and holiday charges are added the average would exceed 26%.
57. It is denied that there is any policy or pressure on management to understaff their restaurants and understaffing will only occur on those occasions where staff fail to show up or do not attend because of holiday or sickness.
58. If a restaurant is consistently understaffed the management would be unable to deliver the quality service, cleanliness and value expected by the Company of them and by the public and would be subject to underperformance.
1. This statement is supplementary to my first statement served in June 1993.
2. Following the Court of Appeal's Decision in April 1994 in this action, paragraph 31 of Tab 7 of the abstracted pleadings has been reinstated.
3. Whilst I have no direct knowledge of the female employee referred to in this allegation who allegedly developed varicose veins during 10 years employment by McDonald's and who was "refused retirement", although I am not sure precisely what those words are intended to mean, I can offer the following comments which may be relevant.
4. If the female employee had been an hourly paid member of staff she would not have been eligible to be a member of the Company's Pension Fund. If she had wished to leave the company she would have been entitled to hand in her notice which would have been for a maximum period of 3 months, depending on her length of service. Working on the assumption that she had worked for the company for 10 years she would have been entitled to 10 weeks notice. Consequently, the company would not have been in a position to "refuse retirement".
5. If the employee had been a salaried member of staff she would have been eligible to be a member of the Company's Pension Fund and could have applied, if circumstances permitted, for early retirement or retirement on grounds of ill health.
6. Since about 1986, in addition to my other responsibilities within the company, I have been a Trustee of the Company's Pension Fund. I have therefore been aware of all applications for early retirement and retirement on grounds of ill health. There have been three members of staff who have applied for early retirement and no applications have been refused.
7. There are no members of staff who have retired on grounds of ill health and no applications have been refused.
8. If a salaried employee suffers serious ill health during their employment for whatever reason they may be entitled to receive benefits under the company's long term disability plan. If this disability persists retirement on grounds of ill health may follow. There are currently three members who are receiving permanent ill health benefits, all of whom have serious problems of ill health resulting from a car crash, osteo arthritis etc. There is no member of staff who has ever applied for permanent ill health disability benefit or for retirement on grounds of ill health because of varicose veins.
9. It is part of the Defendants' allegations that McDonald's exploit young employees as well as black people and women.
10. McDonald's policy in the employment of young persons is to ensure that there is full compliance with all relevant legislation.
11. Further we provide an opportunity of first employment for many young people who are given training and the chance to advance within the company if they choose to continue working for it. The flexibility of our working hours allows them to choose when they are available to work to accommodate their study, exams, school holidays, vacations etc. Further, a significant number of people who leave later come back on a full or part-time basis, particularly if they are continuing with their education.
12. In their Re-Amended Defence served in April 1994, the Defendants allege at paragraph 10 on page 3 that in Kendall in or around 1993 a case of food poisoning of a McDonald's customer led to legal action for compensation. Part of my overall responsibilities within the company includes overseeing litigious matters in conjunction with outside solicitors. I have no knowledge of this case of alleged food poisoning, nor has the company any record of it. Had legal action been taken for compensation in respect of food poisoning as alleged I would have known of it.
13. With regard to the allegation at paragraph 9 of page 8 under Employee Rights it is alleged that in the United Kingdom in 1991/92 Local Authorities successfully prosecuted the company on six occasions in 1991 and five times in 1992. I take this allegation to mean prosecutions under the Health and Safety at Work Act 1974 resulting from accidents/injuries to employees. In 1991 the company were prosecuted on four occasions; it was convicted on one occasion (this is the allegation at paragraph 8 of page 8 which has been admitted) and acquitted on the other two by the Boston Magistrates Court and on appeal by the Gravesham Crown Court. There were no prosecutions in relation to safety of employees in 1992.
Appeared in court|
exhibits: Not applicable/ available
transcripts of court appearances: