All quotes are taken directly from the court transcripts.
Sid Nicholson, McDonald's UK Vice President, gave evidence regarding the company's employment practices. Mr Nicholson joined McDonald's in 1983 as Head of Security. He was Head of Personnel from 1984 - 1991, and combined the two jobs for most of that period. Prior to joining McDonald's, Mr Nicholson had been a Chief Superintendent in the Metropolitan Police, following 31 years in the police force, firstly in South Africa, and then in the Met.
Low Pay and No Guaranteed Hours
Mr Nicholson admitted that McDonald's set their starting rates for crew employees for most of the country "consistently either exactly the same as the minimum rates of pay set by the Wages Council or just a few pence over them". He agreed that for crew aged 21 or over the company "couldn't actually pay any lower wages without falling foul of the law". He stated that when the Wages Council abolished the legal protection of a minimum wage for under-21s (in 1986) "I was quite content..because it simplified things". However, he said "I do not accept that McDonald's crew are low paid" and he denied that wages in the catering industry were low compared to other industries. Mr Nicholson said he thought the London Greenpeace leaflet was "highly defamatory in its entirety", including the statement 'Workers in catering do badly in terms of pay and conditions', but admitted that he had not made any enquiries about wages in other industries before reaching his point of view.
Pay, he admitted "would be one of the things that is often mentioned" when staff were asked what improvements they would like at McDonald's, but, he said "you show me any working man who feels he is getting enough pay"..."I do not feel I am getting enough pay". He admitted that in 1993 McDonald's senior management levels had salaries over £75,000 p.a. plus benefits and perks. At that time the starting rate for crew members outside London was £3 per hour for over 18's and £2.65 per hour for 16 & 17 year olds.
Mr Nicholson said that these were the basic rates and that crew could increase their pay rates by passing 'Performance Reviews'. Company documents revealed that in order to obtain a 5p per hour rise the crew member would have to score at least 76%, for a 10p per hour rise 87%, and for a 15p per hour rise 93.5%. The guideline for attaining 87% or over was that employee "performance consistently exceeds job requirements and expectations".
McDonald's employees, Mr Nicholson agreed, "cannot supplement their wages by keeping tips", unlike in other sit-down meal restaurants. He said that it was "gross misconduct" (a sackable offence) for staff to receive tips.
About 80% of crew people are 'part-time', averaging about 20 hours per week. Mr Nicholson admitted that employees do not have any guaranteed hours or pay at McDonald's He agreed that managers have the power, while any crew person is working their scheduled shift, to compulsorily cut or extend the hours being worked (the crew handbook states: "On occasions you may be asked to continue working past your normal finishing time. You will be released as soon as the need for your service has passed"). Even breaks could be cut. In any event, crew are not paid for meal breaks.
Exploiting Young Workers
Approximately two thirds of McDonald's crew are under 21. Mr Nicholson accepted that nearly a third of employees at McDonald's were under 18, but he denied McDonald's "chose to employ a high percentage of young workers so that they could exploit them for lower wages and make greater profits". McDonald's UK has admitted that it was convicted of 73 offences in relation to the employment of young people in Guildford and Luton in 1982 and Slough in 1984. Mr Nicholson said that "since that time I have no knowledge of any infringements of the regulations". He was quizzed by the Defendants about the statement of a forthcoming company witness who admitted that under-18s had worked illegal hours at Swindon McDonald's, but 'only' on 'one or two' occasions. Additionally, time sheets obtained by the Defendants revealed five breaches of the law in one week in relation to the employment of young employees at Orpington in 1987.
A memo dated 26th January 1989 from Mr Nicholson to all McDonald's licensees revealed that "We know of at least one borough council who has specifically prohibited the employment of children in McDonald's restaurants". Mr Nicholson said he could not remember the reason for the ban. Other documents revealed that as recently as 1993, on average 2-3 under 18's were showing up on company records as working in excess of 96 hours in a fortnight (48 hours a week) which until 1990 was illegal, and was still, according to Mr Nicholson, against company policy.
No Overtime Pay
McDonald's, he admitted, has never paid overtime rates, despite the Wages Council setting overtime rates for all hours worked over 39 hours in a week. Mr Nicholson claimed that this law did not apply to McDonald's because the company paid enhanced rates for certain shifts. However, he admitted that the higher rates of pay were for antisocial hours (7pm-7am) and if, for example, a crew member worked 40 hours or more, but if it was between 7am & 7pm "they would never get any extra pay at all by this route". He said overtime pay was unnecessary because of company policy setting a maximum of 39 hours a week for all crew. But the Defendants showed from disclosed Payroll reports that at least 5% of hourly-paid staff in London & the South worked over 39 hours each week. This, Mr Nicholson claimed, showed it was a 'rare' occurrence. Payroll records for one store indicated that 9 out of 53 employees worked over 78 hours in a fortnight (39 hrs p.w.). When asked if it would concern him if 17% of employees were working more than 39 hours a week, in breach of policy, he said "It would not concern me", he said he would want to know why, but that he would not necessarily expect to hear about it, and then went on to say ".... It is only policy".
Despite being Head of Personnel for 7 years Mr Nicholson claimed "I do not know why [the company] set the policy of not working overtime". Mr Nicholson stated that the company would fight any Industrial Tribunal where "an important principle was being challenged" but when an ex-crew person had challenged McDonald's refusal to pay overtime, McDonald's settled out of court.
Pressure to Boost Profits
The Defendants showed a documentary 'One Every Mile', filmed with McDonald's permission inside two London stores, which portrayed the reality of the high-pressure working conditions for employees. Mr Nicholson agreed the conditions shown were 'typical' of high volume stores. Crew were filmed complaining about pay, of pay rises being delayed, about 'hours worked being under-recorded' and that the pressure of the work 'does your brain in'. The documentary, made for Channel 4, was never broadcast. Commenting on the fact that there was a preponderance in the film of managers with an ex-military background, the witness said that such people bring a 'sense of discipline' to McDonald's.
Mr Nicholson admitted that store managers were under pressure from higher up to keep labour costs down, but he denied that the company determines 'acceptable labour costs' for each store. However, company documents revealed that a former manager in Newcastle (and witness for the Defendants) had been ordered amongst other things to get his labour costs down "within targeted labour guidelines" (of between 14-16% of sales) or face dismissal. Internal company documents showing profit and loss projections for 1992 revealed that the company had planned to reduce the overall crew labour costs as a percentage of turnover (at about 15% of sales) whilst increasing the management percentage.
Meanwhile, in 1992, the manager of another Newcastle store was jailed for 6 months for inducing a crew member to phone through a hoax bomb threat to nearby Burger King in order to boost sales at McDonald's.
Each year a McDonald's 'Store of the Year' is chosen by the company because of its "consistently high standards" in all areas, including personnel matters. It is used as an example to others. In 1987 Colchester was chosen. The Defendants are calling 5 witnesses who worked there in the mid to late 1980s, including a floor Manager. A statement of the company's own witness - an Operations Manager at McDonald's with responsibility for 20 stores - revealed that special clean-ups were ordered at the Colchester store when senior management were due to visit, some employees having to work through the night to complete the clean-up. Further, breaks were sometimes shortened and hours could be compulsorily cut or extended. The manager admitted that crew sometimes worked up to 50 hours a week (which Mr Nicholson said indicated the store was under-crewed), or did double shifts (about which he commented 'they would be exhausted'). When challenged over these practices at their so-called 'exemplary' store, Mr Nicholson stated that if they were happening in all McDonald's stores in the country "it would not concern me".
Management Manipulation
McDonald's produces a bi-monthly magazine -'McNews'- which, Mr Nicholson said, is "targeted at restaurant crew" "to portray a kind of corporate identity to the crew". On their first day, all new crew people are shown an official McDonald's 'orientation' video to, he said, "inject" a "family feeling". He denied this was 'brainwashing' and said "If they do not like it they do not need to stay". As part of the performance reviews (needed to obtain a pay rise) crew were marked on their "attitude" "towards store success" and their "desire to progress"; crew people failing to have the right attitude "could probably be terminated" he stated.
Despite working in a fast moving and hot environment, workers had to get permission to have a drink. Whilst management can change crew hours of work at will, and the Crew Handbook lists dozens of examples where management can direct, restrict or ban employees activity and behaviour (under threat of disciplinary action and summary dismissal) Mr Nicholson couldn't, when asked, think of a single right that workers had except where there was statutory protection.
In March 1990 annualised crew turnover at McDonald's was 196.5%.
Anti-Union Practices
Mr Nicholson said the company was not anti-union and all staff had a right to join one. However, he said that the company was "very, very much in support of performance related pay. Those who work well are paid well. For that reason we would rather not deal with Trade Unions". Under questioning he admitted that any McDonald's workers interested in union membership "would not be allowed to collect subscriptions...put up notices...pass out any leaflets...to organise a meeting for staff to discuss conditions at the store on the premises...or to inform the union about conditions inside the stores" (which would be deemed 'Gross Misconduct' and as such a 'summary sackable offence'). In fact, Mr Nicholson agreed, "they would not be allowed to carry out any overt union activity on McDonald's premises".
Mr Nicholson appeared confused as to the what the company would do if a majority of crew demanded union recognition, first stating "If a majority of the staff of a restaurant had an election and voted to be represented by a trade union, then they would be represented by a trade union" but later agreed that "if every single member of crew in a particular restaurant joined a union [McDonald's] would still not negotiate with the union". However, he did recognise that "if of course there was a massive national drive" and a "very large proportion of McDonald's employees joined a union" and took industrial action, McDonald's "might be left with no short alternative but to negotiate".
On 3 occasions, in Hackney 1985, East Ham 1986 and Liverpool 1988, Mr Nicholson was informed by store management that employees were interested in union representation. Mr Nicholson said he then visited the stores accompanied by other management or Security officials to talk to the crew. Mr Nicholson claimed this was to tell the crew "it was their right if they wished to join a union" and talk to them about union representation. Asked why he had gone to talk to workers about union representation when by his own admission he knew nothing of how unions organise, Mr Nicholson replied "Because I do know how we prefer to deal with our work force" and that he had gone "to explain our point of view to them".
He claimed that the atmosphere at these meetings was "light-hearted", and said that few spoke up about wanting to join a union, and that at the Liverpool meeting only a few people had put up their hands when the manager asked "Now that you have heard what the company's policy is, how many people really want to consider joining a union?". From this, he concluded there was not a lot of interest in joining a trade union. He denied that people could have felt intimidated by his presence or that of management/security. (He said that he took an Area Security Manager to Hackney only to help him find a place to park his car). Mr Nicholson denied that the company's refusal to negotiate with Trade Unions was because "they would be more effective at arguing for better wages and conditions than individual workers". The Defendants referred to a successful strike for Union recognition at McDonald's in Ireland, 1979, and to a ruling by the Rights Commissioner there in 1985 that two union members were unfairly sacked for union activity.
The company has admitted that in 1979, the Personnel Department in Germany sent out a memo emphatically advising Managers not to hire trade union members.
Mr Nicholson claimed that company 'rap sessions' (meetings for workers to give their views to a manager or supervisor) meant there was no need for unions, and he denied any crew felt 'exploited', 'pushed around' or felt they got 'low pay', because "no-one has said to me they do". Mr Nicholson remembered banning a Union official from leafleting or talking to staff inside a London store, even during their breaks, but claimed he had 'no objection' to him leafleting or recruiting outside - "We are quite used to people outside our stores giving out leaflets". He stated "I want to know everything that happens at a store. I want to know when members of London Greenpeace stand outside of a store and distribute literature and I want to know when they leave".
Campaign Statement: The McLibel Support Campaign was set up to generate solidarity and financial backing for the McLibel Defendants, who are not themselves responsible for Campaign publicity. The Campaign is also supportive of, but independent from, general, worldwide, grassroots anti-McDonalds activities and protests.