McDONALD’S workers who were on strike yesterday deserve wholehearted support and solidarity from the entire labour movement. The issues raised — predominantly low pay and casual employment — are key for all of organised labour.
For several years, through the Fast Food Rights campaign, the Bakers, Food and Allied Workers’ Union (BFAWU) has been championing the rights of workers in the fast food industry.
Those workers commonly have no choice but to accept zero-hours contracts at the national minimum wage (NMW) rate — £7.50/hour for age 25 and up, £7.05 for age 21-24, £5.60 for 18-20 and £4.05 for under 18.
Even with guaranteed hours, the NMW is nowhere near a real living wage, especially for a young person, as many fast food employees are.
But a zero-hours contract also means that workers cannot know from one week to the next how much they are likely to earn. This produces an atmosphere in which they are afraid to raise concerns, or to stand up to bullying managers, for fear of having their shifts cut back.
While yesterday’s strike was not about pay, but about working conditions and McDonald’s refusal to deal with grievances, the company can certainly afford the £10 an hour which the BFAWU is fighting for.
In 2016 McDonald’s reported pre-tax UK profits of £271m — but after paying “franchise rights fees” of £128 million to Luxemburg-based McD Franchising Europe, which employs only 14 people, and which reported turnover of $1 billion and profits of $541m from European royalty payments.
The European Commission has been investigating McDonald’s, regarding whether Luxemburg’s tax arrangements amounted to illegal state aid, claiming that the company had “virtually not paid any corporate tax in Luxembourg nor in the US on its profits since 2009.”
McDonald’s has denied this, saying it paid $2.5bn of tax in Europe in 2011-2015, adding that most restaurants are run by franchisees, who pay taxes locally. But in December it announced plans to scrap its Luxembourg structure in favour of a unified European structure in Britain — probably because of the lower British rate of corporation tax.
The local franchising arrangements mean that actually only 31 per cent of McDonald’s 1,470 restaurants in Britain are owned by the company.
The franchisees are responsible for pay and conditions, paying the set-up costs and an annual fee to McDonald’s of between £150,000 and £400,000 a year. As an example, Caspian Networks operates 12 McDonald’s restaurants and employs 950 people. Simple arithmetic suggests that most must be on zero-hours contracts.
And McDonald’s are not alone: Subway, Domino’s, KFC, Burger King, Costa Coffee and Starbucks are all following the same model, raking in profits for the use of the name.
This fragmentation in the industry, and the atmosphere of fear, make trade union organisation very difficult, so the BFAWU is to be congratulated for its recruitment work at Cambridge and Crayford, the 95.7 per cent vote for strike action and yesterday’s magnificent turnout.
Already, after the ballot result was announced, McDonald’s had announced that all its staff in Britain would be offered the option of guaranteed hours by the end of the year. But the issue of zero-hours contracts is not confined to the fast food industry. The latest data shows that the number of such contracts in Britain has doubled to 1.8m in the last 5 years. They are rife in agency working, and particularly in further and higher education. It is good that the Labour Party’s manifesto pledged to ban all such contracts. But the movement can’t afford to wait for a Labour government.
Next week’s Trades Union Congress must give solid support to the GMB motion on insecure working practices as the basis for widespread campaigning — and for organising following the BFAWU’s example.