Union decries WINZ wage subsidy to McDonald's

Unite Union is questioning the $270,000 paid by WINZ as a wage subsidy to McDonald's between July 2009 and June 2013.

"This subsidy is only for the stores directly owned by the US fast food giant. 80% of stores in New Zealand are franchisee owned so the probable subsidy could be in the millions" said Unite National Director Mike Treen.

"We do not believe McDonald's needs to be subsidised to employ workers. They are a huge multinational making billions of dollars in profits. Their employment agreements don't even guarantee any hours for most staff from week to week. Moreover for the period of this subsidy we have discovered that McDonald's has been a serial law breaker in relation to rest and meal breaks.

"We are in the process of taking McDonald's to court because they have consistently failed to provide 30-minute meal breaks to workers working shifts over 4 hours as required by law since April 2009. Based on figures from two stores - one owned by the McOpCo parent and one by a franchisee - over a four month period they have breached the law 100 times a month. If this were multiplied by all 161 stores since the April 2009 law change there could be 80,000 legal breaches. McDonald's has also cheated workers out of an estimated $2.5 million in compensation for these breaks as required in the union's collective agreement.

"Unite is also concerned that the company accounts appear to be designed to minimise the payment of tax in this country. McDonald's NZ pays a far higher franchise fee to its parent than is the case in other countries. They have also taken out a huge 'loan' to pay the US giant $150 million and so 'boost its tax deductable interest expense in coming years'.

"Our question is why should a wealthy multinational that cheats the taxpayer and its workers deserve a subsidy from the taxpayer. It doesn't make any sense."

Click here to read the Ministry of Social Development's response to an OIA request.

ENDS

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