The arguments between the workers and McDonalds are common in this type of industrial action. The workers are demanding a wage of at least £10 an hour, more secure working hours and union recognition. A McDonald’s spokesman said: “As announced in April this year, together with our franchisees, we are providing our people with the option of a guaranteed-hour contract, and all restaurants will have these contracts in place by the end of 2017.”
Where this dispute is of particular interest for UK franchising is that it raises the potential for the usually clear distinction between McDonald’s (as franchisor) and its franchisees (as the employers of the workers) to become blurred. Traditionally, employees of a franchisee have had no recourse against the franchisor if there is an issue with their employment. However, there has been growing concern in the UK that litigation in the US between McDonald’s workers, employed by franchisees, and McDonald’s itself (as franchisor) may find its way here. In 2016, a court in California considered whether McDonald’s was a 'joint employer' of its franchisees’ staff. McDonalds denied the claim, but agreed to pay $1.75 million in back pay and damages and $2 million in legal fees to the particular group of employees which brought the claim.
All franchisors in the UK should watch these developments very closely at the moment. In particular, where a franchisor imposes standard form employment contracts onto its franchisees to use for their staff, or where the franchisor regulates the relationship between franchisee and employee closely, or even worse, actively intervenes in that relationship in a way that could justify the franchisor being labelled a 'joint employer'; then that franchisor may want to take specialist advice from a bfa affiliated lawyer to understand the risk that they may be exposed to now.
The content of this article is for general information only. For further information please contact Robert Tiffen or a member of Birketts' Franchising Team.