McDonald’s faces further claims of non-compliance relating to rest pauses – how do you prevent this occurring in your business?

Media coverage has once again focused its attention on the exploitation of employees, this time specifically those working at McDonalds. This is due to the fresh claims McDonalds is facing, alleging that the organisation deliberately denied, or didn’t enforce that employees take their paid rest pauses, as required under their award.

According to the Shop, Distributive and Allied Employees Association’s (SDA) Statement of Claim, McDonalds failed to provide workers with rest pauses, and in some cases allegedly told employees that a free drink and toilet break was a substitute.

McDonald’s has expressed both surprise and disappointment over the SDA Federal Court case, which accuses it of conspiring with franchisees to deny workers paid rest breaks.

Whilst the Federal Court case has been filed on behalf of only 338 current and 92 former employees, the consequences could send ripples throughout not only the McDonalds network, but also the fast food industry, and many other industries and occupations regulated by industrial instruments which facilitate paid rest breaks.

With claims dating back to January 2016, over 200,000 employees could be affected and with the SDA claiming each employee is owed an average $1,000 to $1,800 in unpaid breaks, McDonalds may have to pay over $100 million in back payments, calculation costs, and penalties, if the case is successful.

Rest Breaks under Modern Awards/Enterprise Agreements

Whilst the SDA has set its sights on McDonalds and compliance in the fast food industry, it is an important reminder to all employers that it is their responsibility to ensure all provisions of an award or enterprise agreement that apply to their staff, are adhered to and enforced.

For clients of ER Strategies, there are a number of key awards which also have similar paid rest break provisions. Examples of these awards include (but aren’t limited to):

Many enterprise agreements will also have similar terms.

Employers should check the award and/or agreement that applies to their staff, and ensure that if rest break provisions apply, that these breaks are being suitably enforced and recorded in order to avoid any possible disputes or claims for backpayments.

If you aren’t sure if paid rest breaks apply to your staff, clients of ER Strategies can contact the team on 1300 55 66 37 to discuss their specific situation.

Importance of complying with Rest Break provisions under Award/Agreement terms

Complying with award/agreement terms and conditions is the responsibility of the employer. Whilst it may be ‘industry practice’ for employers to allow employees to take breaks at their discretion, or to govern when/how they schedule in required breaks, this court action is a timely reminder that these forms of arrangements can still leave employers exposed.

In the context of the McDonalds case, The Fast Food Industry Award 2010 (FFIA) identifies the need for rest pauses for employees working 4 hours or more in a shift, a benefit that employers cannot bargain with or substitute out. Failure to give employees their rest pauses is a breach of the award and can result in heavy penalties being imposed.

As seen with the current class actions, employees are also given the opportunity to take private legal action if they believe their employer has failed to provide the correct amount of rest pauses during shifts. For businesses who rely heavily on their public perception and branding, such as McDonalds, these court cases can be even more damaging, due to potential repercussions these negative perceptions may ultimately have on their bottom line.

Employers should record when rest pauses are taken, as it acts as proof that all employees received their paid rest pauses on all eligible shifts. If an employee does take legal action claiming that they didn’t receive the correct amount of rest pauses, employers must be able to prove that the employee did receive their rest pauses. Without any written records, employers are vulnerable to these claims, even if they are giving employees the correct pauses.

Taking the correct steps to protect your business

The only way to protect your business is to ensure that employees actually take their paid rest pauses if they are eligible for one. It is your responsibility to ensure that you or your managers are enforcing and monitoring rest pauses to all employees, where it is their right under an applicable modern award or enterprise agreement.

Secondly, you should keep a record to confirm paid rest pauses have been taken by employees, to ensure you are prepared to defend any claims that rest pauses weren’t provided. We recommend as follows:

  • Keep a detailed record of when the employee will take their rest pause, and/or
  • Implement a system where the employee and you or your manager can verify the rest pause has been provided and taken.

Our recommendation is that your managers (if it isn’t common practice in your business already) start rostering paid rest pauses, to demonstrate to staff where they are entitled to a paid rest pause on a particular shift. This would also ensure that employees take rest pauses at the correct time and don’t unknowingly cause any other non-compliance issues.

To further ensure you have the required records of employees taking their paid rest pauses, employers and managers should introduce a process in which evidence of employees taking their rest pauses is recorded. Records of the employee taking their rest pauses should then be kept by the business to ensure the business is able to defend a claim, if ever required.

Below is an example of a rest break provisions, as seen in clause 27.1 of the Fast-Food Industry Award 2010, demonstrating how the rest pauses and meal pauses should be provided depending on the length of the employees shift:

Hours Worked

Rest Pause

Meal Break

Less than 4 hours

No rest pause

No meal break

4 hours but less than 5 hours

One 10-minute rest pause

No meal break

5 hours but less than 9 hours

One 10-minute rest pause

One meal break of at least 30 minutes but not more than 60 minutes

9 hours or more

One or two 10-minute rest pauses, with one taken in the first half of the work hours and the second taken in the second half of the work hours, two rest pauses will be given unless a second meal break is provided

One or two meal breaks of at least 30 minutes but not more than 60 minutes

In certain awards/agreements, there will be additional requirements attached to how rest breaks can be taken, with the example of the Fast Food Industry Award 2020, where an employee cannot be required to take a rest pauses or meal break within one hour of their shift commencing or finishing, and cannot take rest breaks combined with a meal break.

Next Steps

ER Strategies highly recommends that all employers follow these simple steps to assess whether you are meeting your compliance obligations in relation to rest breaks: –

1. Check the modern award/agreement which applies to your staff – does it have rest break provisions?

2. If yes, do you understand how they apply? If not, call ER Strategies on 1300 55 66 37.

3. Review how these breaks are currently made available to staff. Are they rostered? Who is enforcing this? What records are kept? Make changes accordingly.

4. Educate employees on their rights under the award/agreement so they can assist you in remaining compliant.

ER Strategies has created employee-focused training modules which help educate them on their minimum rights in the workplace, and how to speak up if they have a question.

Contact the team on 1300 55 66 37 for advice, or alternatively for a free look at these courses, and to discuss how they could assist your business.

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