Witness Statement

witness statement

name: Philip Pearson

section: Employment

for: The Defence

experience: Expert on industrial relations, pay and employment law

summary:

The witness provides an in-depth and fascinating study of McDonalds employment regime, compiled as part of the witnesses role in safegaurding and assessing employment practices in this sector.

However, the witness, in the course of the study, came up against standard stonewalling tactics."It is only possible to gain a comprehensive picture of working conditions through direct contact with employees. However, I was not granted permission to discuss with crew some of the issues which are in contention...

cv:

I worked for the Transport and General Workers Union as a full-time official from April 1980 to November 1992, working out of the union's central London office, at North Gower Street, prior to taking up this appointment, I was employed as a fieldworker with the Migrant Services Unit

Full cv: (not available for this witness)

full statement:

Introduction

I worked for the Transport and General Workers Union as a full-time official from April 1980 to November 1992, working out of the union's central London office, at North Gower Street. Immediately prior to taking up this appointment, I was employed as a fieldworker with the Migrant Services Unit, a voluntary organisation, working primarily on employment-related issues among migrant workers in London.
My union duties principally focused on the hotel and catering industry, where my responsibilities included:
* negotiating pay and conditions among hotel and restaurant companies, in London and at national level;
* providing advice and assistance to individual catering workers on specific employment rights issues;
* organising and supporting union recruitment drives, either in response to specific requests, or as part of planned campaigns;
* representing workers at industrial and social security appeal tribunals;
* representing the TGWU: as a member of the Licensed residential Establishment and Licensed Restaurant Wages Council; the Unlicensed Place of Refreshment Wages Council; and the advisory body attached to the Denmark Street Hotel and Catering Job Centre;
* servicing, as secretary, the union's Hotel and Catering Advisory Committee;
* organising and conducting as tutor, TCWU training courses at regional and national level on health and safety at work; rights at work; and support- courses for shop stewards in the hotel and catering sector.
My responsibilities included the restaurant and fast-food sector. I had contact with staff in a number of McDonald's outlets, including those referred to in my earlier statement of 30 September 1988, concerning initiatives at the Mare Street (Hackney), Warren Street (Camden), and Seven Sisters (Holloway) and other brandhes.
I have read the individual employee statements forming part of the defence submission, relevant transcripts of proceedings insofar as employment and health and safety at work issues are concerned, and supporting documents and statements.

Site visits

My site visits were of limited value, due to the constraints imposed by McDonald's. I attended off-peak site visits at the Hackney Mare Street branch on Wednesday 22 June 1995 at 9.45 am, and the Seven Sisters unit on Friday 24 June 1995 at 9.45 am, accompanied by a solicitor on behalf of the plaintiffs, and an area supervisor. I had asked to see the store in operation at peak times, and to receive certain overall statistical information on the workforce at the two stores. However, these requests were denied.
It is only possible to gain a comprehensive picture of working conditions through direct contact with employees. However, I was not granted permission to discuss with crew some of the issues which are in contention, including:
* staff views on trade unionism in the company, its relevance and desirability;
* opinions on staffing levels, shift arrangements, working hours, overtime worked and other scheduling practices;
* their experience of health and safety issues at the restaurant; and
* how, in their view, the need for stores to meet labour cost targets affected work scheduling and standards of health and safety at work.
I was shown round the cooking and service areas, observed some work practices, discussed some operational issues with managers, and perused the accident books and daily food production schedules. Copies of these documents have not been made available to me.
Although I did not observe the restaurants working at their peak, I was struck by the intense concentration of effort by employees. At each unit, I observed front-of-house staff skip-running in order to complete the delivery of orders to customers within the required service times.
Though I was not provided with written details, I was shown the hour-by- hour predicted product sales targets for the week. The expected sales are based on previous experience. This apparently enables managers to schedule staffing levels against predicted sales.
Though I saw the back-of-house areas at off-peak times, they seemed in both instances to be near the limit of their safe working capacity, given that speed of movement is at a premium, regardless of how many customers are in the queue. I examined the stores' accident books, each recording accidents over the previous two to three years. The range of occurrences was similar to those found in the 27 UK and Ireland employee witness statements, which I have examined. I have requested, but not received, a copy of recent entries in these two accident books, though I was given to understand at the time of my visits that this information would be made available.

David McGee

I have read David McGee's statement and would concur with much of his description of the incidents surrounding his attempt to unionise the store.

Union rights and McDonald's

As explained in my earlier statement, I was involved in a number of shortlived attempts to encourage McDonald's employees to join the hotel and catering section of the TGWU, of which I was the leading officer in London and the south-east of England at the time. I set these initiatives in the context of a wide-ranging series of activities among hotel and restaurant workers in London during my period of tenure. We undertook literally hundreds of recruitment initiatives, the great majority in response to specific requests from employees. Several thousand catering workers joined the union as a result.
Particular characteristics of the McDonald's workforce and wider labour practices militate against trade union development in the company. These include:
* high labour turnover. If the 60% labour turnover figure at McDonald's referred to in the contentious leaflet is now more or less accepted as near to the true position, this is double the 35.4% industry average for the restaurant sector, according to the latest report by the Hotel and Catering Training Company [Employment Flows in the catering and hospitality sector: 1994]. It is therefore doubly difficult in this company to recruit, retain and successfully represent union members;
* the company employs a high percentage of workers under 21 years of age, including students in large numbers, who do not expect to enjoy a long stay at the company, and who are unlikely to have a trade union background: Peter Sutcliffe's case was an exception;
* the employment of a high proportion of part-time staff on variable shifts makes for difficulties in maintaining regular contact with crew interested in joining a union;
* fear of dismissal. Of the 27 witness statements from former employees, 14 refer to trade unionism. Company hostility, real or perceived, features in most of these cases. Until 1995, part-time staff have had to work for five years, and full-timers for two years, before gaining the right to claim wrongful dismissal at an industrial tribunal; and
* employment conditions potentially restricting trade union activity in a restaurant: see Crew Handbook, page 24, conditions k and l, which would debar the distribution of union literature or the collection of union dues, whether staff are on or off duty.
For these reasons, the McDonald's staffing and labour relations system, in my view, is fundamentally inimicable to unions. This may appear in the form of a prevailing anti-union-initiatives culture at store management level, as would appear from the employee statements; or in the arrival of senior personnel at the scene of tentative first attempts to estabhsh a union presence: I refer to Mr Nicholson's statement, paras 29-42. Notwithstanding his denial in para 34 (no policy of getting rid of pro-union workers), employee statements confirm such incidents in Dublin; or refer to the fear of dismissal; or to rumours of McDonald's closing down a unionised restaurant; or to the belief that a pretext would be found for dismissing staff interested in unions. The company appears to take few steps to ensure that all staff are aware of their right to join a trade union, and that union membership would not put their employment in jeopardy.
What would a reasonable modern employer, willing to recognise a trade union, offer its workforce? At a well-unionised restaurant the size of a typical McDonald's unit, with say 80 full- and part-time staff, I would expect to see a basic union recognition agreement with two or three elected, trained shop stewards covering the range of shifts. By virtue of union recognition, the restaurant would have a health and safety at work committee, with trained safety representatives accredited under the Health and Safety at Work Act, meeting regularly, with management, undertaking regular, joint safety inspections. A jointly-agreed grievance and disciplinary procedure would involve independent, trained union representatives available to represent staff in a fair and competent manner, with employee access to a full-time union official and other union legal resources. There might also be local substantive negotiations on pay and conditions, and company-wide bargaining, depending on the overall union density within the operation. Awareness of statutory employment rights, including health and safety, wages councils and the employment of young persons, form part of union shop steward training courses.

Health and safety at work

I have read the 1992 HSE report "The Management of Occupational Health and Safety in McDonald's Restaurants Ltd". I note that it states there were no restaurant safety representatives or safety committees in the company (para 2.12). The report describes the application of the "hustle" policy as a good illustration of the culture of the company, which "had resulted in a conflict between operational requirements and safety, where the need to get the product to the customer and to maximise sales had taken precedence."
The report observes that, for many staff, hustle meant having to "run or slide" . The system was described as "putting the service of customers before the safety of employees" in many restaurants. I find the HSE report a worrying assessment of company priorities. Some practices are inherently unsafe, yet persist, from my own observations, both as a customer and during site visits. In work areas with hot surfaces, hot liquids, electrical machinery and sometimes wet floors, "hustle" is inherently a high-risk culture.

Controlling the cost of labour

The food control schedules I saw during my two site visits came to mind when I read the detailed guide to controlling labour costs [Document headed: Profit Unit Activity 3], which begins with the statement: "As you know, labour costs are controllable in the same way food costs are."
Constantly-monitored food and labour cost control systems form a disciplined, integrated approach to cost-management. Both are monitored on an hour-by-hour basis, as statements by witnesses Gibney, Alimi and K. Harrison make clear, with staffing levels scheduled to income. The system depends on a highly flexible employment contract - with staff flexing their hours, willingly or not. It is central to management's approach to planning, programming and budgetting within restaurants, and within the wider organisation.
On the question of whether the company pays "low wages", in public policy terms, one yardstick would be the former "floor" of pay set by the 26 wages councils in certain industries, mainly in the service sector, until the counils were abolished effective from August 1993. These rates were well below half average earnings in the UK. A widely recognised inter- governmental formula lies in the higher standards set by the Council of Europe's "decency threshold" of pay, set at 68% of the average earnings in any affiliated state, including Britain. In 1994, the decency threshold was Ł221.50 a week, based on gross weekly earnings for full-time employees on adult rates, working a 37.7 hour week (source: the Govemment's New Earnings Survey 1994).
Following wages councils abolition, Britain are Ireland are the only two EU Members States without cross-industry minimum wage systems. Reflecting concerns among our European partners over the development of labour market practices "which no longer afford those concerned a decent standard of living", the European Commission adopted an Opinion on an equitable wage on 1 September 1994 (copy published in the European Industrial Relations Review No.239 enclosed). An equitable wage is defined as a reward which, "in the context of the society in which [employees] live and work, is fair and sufficient to enable them to have a decent standard of living" (para 1).
On basic day-shift rates, the company kept a little ahead of the former UK statutory minimum rates, while other shifts attract a slightly higher hourly rate. But it is questionable whether employees working such hours a week, on whatever combination of shifts, would always have received the equivalent of the statutory overtime rate, or have been aware of their statutory minimum entitlement. There is some evidence in the statements that Wages Council orders were not on display, an offence under the Wages Act. Until the abolition of wages councils in Britain, effective from August 1993, McDonald's was covered by a statutory minimum rates for a basic 39-hour week for employees over 21 years of age, and by a statutory time-and-a-half overtime payment thereafter. Until 1986, more detailed provisions covered workers from 16 years of age. There is ample evidence in the submissions of employees working beyond the claimed maximum 39-hour week. But because of the overall low-hour policy, low take-home pay is an in-built feature of employment in the company.
When labour targets are translated into individual managers' performance targets, and form a key part of their individual appraisals, then achieving them may of necessity engender a disciplinarian, if not authoritarian, management style, dependent for its success on a highly flexible workforce. Such a tendency is borne out by many of the employee witness statements.
If, as the HSE report suggests, McDonald's culture tends to place customer service ahead of staff safety, in effect to maximise sales; and if, as it appears, the labour formula focuses intensely on the need to minimise staff costs; then, staff will come second best twice, to customers and to finely-tuned cost control mechanisms.

supplemetary statement:

The witness provided the following details

Between April 1980 and November 1991 I was employed as a full time officer with the Transport and General Workers Union, working from the local office in North Gower street, central London. My main responsibilities included recruiting and servicing employees in the hotel and catering industry including the fast-food sector. On various occasions throughout my period of office I was involved in recruitment activities in McDonalds. This inludes a series of contacts with various outlets in 1987-88.
I made the following statement on 3Oth September 1988 whilst employed by the TGWU: "McDonalds is a difficult firm to deal with from a trade union point of view. I have been refused access to the staff on the premises of at least two outlets (Warren Street and Narrow Way, Hackney) despite speaking to local managers, even though this was to meet staff in their break times. In at least one case a lay union organiser found that he had trade union material stolen from his locker and was told by management that they can do what they like. They admitted to the employee that they did steal the material. I was dismayed by this action by management because I was assured by the lay member that he had openly given the material to staff whilst they were off duty and I was asured that the initial response from staff was very enthusiastic.
Staff in other units have told me that they were afraid to join a union because they were told not to or because they feared the sack if they did so or because they were told by management that there was no union in McDonalds. I believe that they took this to mean that they were not allowed to join a union and that management was happy to leave them with this impression."
The other units referred to (in para 3) above were in Oueensway and Holloway Road, London.
I have undertaken research on the following areas:
- the level of trade union membership within the hotel and catering industry, especially within London and the South East:
- difficulties experienced by employees and trade union organisers in developing that membership, with specific reference to such factors as labour turnover and management hostility to collective forms of representation:
- the attempts made at lay union members to advise and assist colleagues facing unfair work practices;
- the level of pay and the extent of low pay within this sector;
- the problem of unequal pay for women and black employees compared with male earning;
- the advantages of the minimum wages set by the (now abolished) wages councils in helping to alleviate low and unequal pay.
In I 986 I published "Twilight Robbery: Trade unions and low paid workers" (Pluto Press), which showed that the "main concentrations of low paid workers are in the service industries - shops, hotel and catering, distribution,..even in the same low paid jobs, such as bar work or clearilng, women's hourly rates of pay are less than mens. On average, women's full time hourly rates are about 74% of mens". This combination of low and unequal pay is a constant problem among low paid, especially female, employees in the catering sector. The book argued that the removal of the safety net of wages council minimum wage rates would lead to a collapse in pay rates in many low paid sectors.Until the passing of the 1993 Trade Union reform and Employment Rights Act, wages councils used to cover fast food outlets.
I contributed to the London Food Commission's report, "Fast Food Facts" (Dr. T. Lobstein, 1988). which described pay and conditions in the fast food sector. It stated that, "Part-time working is common in fast food stores and staff turnover is high. In one study, it was found that a third of those that left fast food employment had been sacked. Yet the law does not permit anyone with less than two years continuous service to claim for unfair dismissal (unless it is for racial or sexual discrimination). ...effectively, very few people in fast food service ever earn this basic employment right."
These comments reflect my own experience in the field as a full time union officer.
Fast Food Facts also draws upon a unique study of employment in the fast food sector by Dr Yiannis Gabriel ("Working Lives in Catering", 1988). I reviewed this latter book in New Statesman, highlighting such issues as high staff turnover and the intensive work regime. Gabriel showed that only 10% of the fast food staff he interviewed had worked in the same place for for as long as two years. They had little hope of promotion and believed that fast food offered, to quote, "crap jobs", a conclusion that must be of concern at some level, given the high proportion of young people who find their first job in the catering sector. Gabriel found that 70% of the fast food workers he interviewed in a major chain agreed that they needed union protection and held over pay and conditions. They felt that the union could give a voice where they had none at present
Lobstein noted that, "Although trade unions have failed to gain a foothold in the UK McDonalds outlets, they have succeeded in other countries, particularly where basic employment protection rights for individual workers are relatively strong." He cites instances in Sweden Dublin and Mexico to make the point which in general, in my view, is highly relevant as background to my own union recruitment experience in this sector.
Low pay persists in catering. The Council of Europe's definition of "low pay" is the "decency threshold", set at less than 68% of average earnings in any affiliated country. On this basis, according to the 1992 New earnings survey, low pay is defined as Ł207.13 a week or Ł5.52 an hour. The New Earnings Survey does not provide specific data on pay for fast food workers. But average earnings for all workers covered by wages councils, including those in fast food, were Ł174.50, with 72.2% earning less than Ł200 per week and as many as one in 10 workers earning below Łl05.60 a week. The same survey shows that waiting staff earn on average Ł151.60 a week, with nearly 85% on less than Ł200 a week.
Such factors as these set the background for the interest in union membership reported by Gabriel and others, in line with my own experience in the field.

date signed: March 1, 1995

status: Appeared in court
references: Not applicable/ available
exhibits: Not applicable/ available
transcripts of court appearances:
- Day 180 - 31 Oct 95,
- Day 181 - 1 Nov 95
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