Management Employees Relation

This study compares the business working of Australia’s McDonald’s under the enterprise agreement and the relevant fast food industry award. The fast food industry in Australia is wholly concentrated with standardization. The total revenue in this sector has increased to around 3.7% over the last five years. The fast food sector in this country are mainly pushing to increase part-time work flexibility. The awards in the concerned industry also support diversities and cultural differences of the employees.

Running head: MANAGEMENT EMPLOYEES RELATION
Management Employees Relation
Name of the Student
Name of the University
Author’s Note

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Table of Contents
Introduction......................................................................................................................................2
Industry Research............................................................................................................................4
Industry award.................................................................................................................................6
Enterprise Agreement......................................................................................................................8
Workplace and stakeholder diversity.............................................................................................10
Discussion and conclusion.............................................................................................................11
References......................................................................................................................................13

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Introduction
The purpose of this study intends to compare on the business working of Australia’s
McDonald’s under the enterprise agreement and the relevant fast food industry award.
McDonald is one of the leading American fast food enterprise that is owned by Richard and
Maurice McDonald and headquartered in US. It rechristened its business operations as
hamburger stand and later identified as premier franchising enterprise. This company has near
around 35,000 restaurants in more than 100 nations. More than 90% of its restaurants worldwide
are mainly owned as well as operated by their independent franchises. Under franchising, this
company has license and conventional under franchise agreement. Under the conventional
franchise agreement, this enterprise offers capital for location that it then owns. Moreover, each
franchise gives certain portion of capital for equipment, signs. Seating and reinvestments in
business. Under license agreement, licensees give capital for location. It employs around four
million employees in their business and serves around 70 million consumers each day. It has
been ranked as the globe’s restaurant chain in terms of revenue that mainly generates from fees
paid by franchise, rent, royalties and sales in organizations operated restaurants (Oliver & Yu,
2018). This enterprise has been the leader in area of corporate social responsibility and is
committed to protect environment for the future generations. McDonalds is reliant upon its
workers for production of foods and quality of customer service (McDonald's, 2018). The
restaurant employees are the biggest group in enterprise’s employment structure. The restaurant
workforce consists of transitional workers, teenagers and students. The part-time and entry level
workforce of this enterprise are paid low wages with respect to other employees. The top
employees of this company attain bonuses based on mystery shopper scores. McDonalds assure
recognition and reward for its workforce in order to motivate them in work. The sector award

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covers the employers throughout Australia in fast food sector. The award do not cover
employees those are covered by modern enterprise award or by the State reference public
industry transitional award. Moreover, this award mainly covers an employer that supplies
workers on hire basis in sector set out in clause. This award covers those employers that gives
group training services for individuals engaged in fast food industry. McDonalds has made
negotiation with SDA relating to proposed variations that is made under the enterprise agreement
2013. These proposed variations mainly relates to inclusion of classification of allowances, home
delivery driver and updating consultation term (Bray & Stewart, 2013).
Enterprise agreement and awards has comprised long- lasting system of the industrial
relations. Awards are the kind of employment contract that outlines basic terms and conditions
relating to specific jobs in an enterprise. The fast food industry set the award rates and the
workers across the industry receives basic wage rise over time. Bray and Stewart (2013) opines
that awards basically tends to assure that workers performing similar work must receive
minimum pay level. The employers in this industry offer above-award conditions for attracting
and retaining employees. On the other hand, the fair work act permits the employees as well as
employers to make enterprise agreement that might displace terms of awards. In enterprise
agreement, the employers have the possibility to reorganize different leave, work hours and pay
so long the agreement passes BOOT (Better Off Overall Test). Thus, the workers have to be
better-off rather than they might be under award. For example, the Australian employees with
university or vocational qualifications who are employed on awards have been reported higher
wage above the premium qualification attained by employees on enterprise arrangements.
However, it is necessary for the enterprises negotiated agreement in this industry for attracting

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and retaining employees and reducing high turnover in business. Few evidences reflect that the
pressure from employees have been the major instigator in business negotiating agreement.
Industry Research
As per Ryan et al. (2013), the fast food industry in Australia is wholly concentrated with
standardization. This signifies that the restaurants operating in this country are particular of its
maintenance of the customer base. The health awareness of consumers has transformed this
sector over the last few years. The rising awareness of nutritional content in fast food and
consumers choosing healthier options influenced the sectors demand. Moreover, this variation in
customer’s preferences has led to influx of new entrants providing higher quality food options.
The total revenue in this sector has increased to around 3.7%over the last five years. The total
number of people employed in this industry is 152,476. The female workers working in this
industry are higher than male workers as per the data published by the ABS (Australian Bureau
of Statistics). The fast food sector in this country are mainly pushing to increase part- time work
flexibility. Recent statistics reflect the Australia’s the biggest union represents fast food laborers.
The average wage of the fast food laborers in the fast food industry in this country is AU$12.75
(Oliver, 2013). At present years, majority of the Australian workers in this industry are mainly
covered by two collective standards such as – awards and enterprise agreement.
Several evidences highlights that the labor market in Australia fast food sector is highly
competitive in nature. Numerous firms are entering into this industry for which the existing firms
implements their effective strategies in context to producing quality foods and providing better
quality service to its customers (Sutherland, 2014). This in turn creates threats for the new
entrants in this industry, thereby creating huge competitiveness within these industries. The level
of competition in the Australian’s fast food sector is described as the one which has been well-

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regulated with preferences of consumers. The labor market in this industry has been discussed
with the help of porter’s five force. The five forces are buyers bargaining power, new entrants,
suppliers bargaining powers and industry’s rivalry.
Suppliers bargaining power-The suppliers in this sector are the main influencing partners,
thereby their bargaining power has been considered as the price suggestion that changes within a
financial year. Their risk management helps the industry to change its position and also influence
other food suppliers in this country.
Buyers bargaining power-The prices of foods keep on changing according to demand, which is
attributed by the market trends. These are cots allocation as well as preferences from which all
the restaurants operating in this industry usually defend themselves. However, the buyers
bargaining powers have been the major factor to segmenting specialization in fast food
restaurants.
Threats of substitutes-As several entities operate in this market, the products produced by all
the entities in this sector are substitute of one another. The substitution is mainly based on the top
performing entities attracting their clients.
Threat of new entrants-This is considered as another competitive force which the fast food
competitive market do not find it imperative to operations of business industry. The reason
behind this is that with market capitalization, new entrants focuses on brand imaging and also
inclined to capital outlay concerns.
Industry rivalry- There are numerous competitors competing in this industry of Australia. The
competition within this market increases due to change in price and product quality variation.

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Some of the recently published facts also revealed that there has been labor exploitation
in the food sector. The labor market conditions in this fast food industry has declined slightly
over the last five years (Oliver & Walpole, 2015). The teenager workers provide more demand of
foods than old aged workers during the peak periods of the activity within the hours when these
laborers are usually available in work. The employers of this industry adopts numerous strategies
based on implications of opportunities as well as challenges in environment of this sector
(Cooney & Stuart, 2013). Most of the entities in this industry integrates lost cost strategy that is
based on position which the enterprise has better margin on the real value of products in this
market. By lowering the price of few products and offering discounts to the customers, the
industry blows out competition. Moreover, utilization of low cost strategies help this industry to
attain better revenues and profitability from business. The unions and laborers in this sector also
strategizes to increase the flexibility of part- time work so that the firms can pay less wages to
the laborers in this market (Pekarek & Gahan, 2016).
Industry award
Some of the main clauses in award that are relevant to this fast food industry are –
 An employee who usually do not fulfill the criteria of part- time employee and also not of
full-time employer would be considered as casual employee according to the clause of
casual employment.
 This industry award mainly covers the employers and employees throughout fast food
sector in Australia in classification given in clause 17 that is minimum weekly wages.
 The award usually covers any laborer that supplies labor on hiring basis in this sector.
 Notwithstanding other provision of award, an employee or employer might agree to
change application in specific areas of award for meeting genuine requirements. The

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terms that the employee or employer might agree are concerned with overtime rates,
allowances, leave funding, penalty rates and so on.
The main clauses in the award, which are particularly applicable and relevant to the employees in
the fast food industry in Australia can be summarized as follows:
 The full-time employees need to serve an average of 38 ordinary working hours in a
week.
 The employees with a service period of 12 months is eligible to up to 12 months of
unpaid parental leave and can also ask for additional parental leave, which is however,
subjected to acceptance or rejection by the employers, on reasonable grounds.
 Long service leaves are also there for the employees.
 The employees are entitled to four weeks of annual leave per year.
 The full-time employees get ten days paid personal leaves per annum.
 There are public holidays for the employees.
 Termination notice and redundancy pay for the employees.
 There is also provision for an Information Statement of fair work for the new employees.
The awards in the concerned industry also support diversities and cultural differences of the
employees. This can be seen to be evident in case of the employees of Mc Donald, who apart
from public holidays also get two days paid compassionate leave per occasion and two days
unpaid leave per occasion for the casual employees. The working environment of the concerned
company, under the different awards and agreements (like Fast Food Industry Award) is mostly
gender neutral, which enables the company to employ men and female uniformly for different
job roles. Any discriminatory behavior, both on part of the employer and the employees, may
have serious legal implications on the offenders.

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There occur different issues in the employee-employer relationships, in the concerned business,
which induces the employees to seek for alternatives through the enterprise agreements, some of
the crucial ones being as follows:
 The employees often refer to the Enterprise Agreements in order to resolve the disputes
occurring with that of the employees
 Issues with remuneration and minimum wage can also led to seeking of alternatives
 The employees can seek reference from the enterprise agreements in case of workplace
misconducts
From the current award it can be asserted that the same benefits the employees considerably as
they tend to get sufficient protection, fall under the minimum wage regulations, are entitled to
various types of paid and unpaid leaves and also notice from the employers in case of
termination with proper reasons. In case of disputes the employees can take reference of the
industrial agreements and can also get assistance of the judiciary and the government.
Enterprise Agreement
A enterprise agreement is a formal agreement on the both pay and conditions which is
established by both the employers and employees at the workplace.The main clauses under the
enterprise agreement for Mc Donald, which are beneficial for the concerned enterprise itself are
as follows:
 Any employee will not be entitled to get accident make-up payment in respect to periods
of any kind of paid leave of absence.
 The rights of accident pay cease with the death of the same.

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 The work hours on any day shall be continuous and there will only be rest pauses and
meal break.
 The concerned business can terminate the employees by providing notice and proper
reason for the termination of the concerned employee.
 An employee can work for a maximum number of 6 consecutive days (Subclause 13.6).
 The maximum number of work hours for an employee is 9.5 hours excluding the meal
breaks, as suggested by subclause 13.3.
 The enterprise can hire employees of three types- full-time, part-time and casual, as per
their needs, as suggested by subclause 12.1.
 In cases where dispute resolution and settlement procedures are in progress, normal work
operations need to be conducted, unless the contingencies include risk of employee health
and safety, as per subclause 9.3.
 As per the clause 16.2, the termination notice provided by the employers should be as
follows:
< 1 year of continuous service 1 week
More than 1 year but less than 3 years 2 weeks
More than 3 years but less than 5 years 3 weeks
More than 5 years 4 weeks
However, there are several aspects in the Industry Agreement of the concerned company, which
may create problems in the operational frameworks of the business, which are as follows:

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 The clause, 16.3, enables the employees serving notice period, to get one day’s time off
without any loss of pay so that they can seek other employment opportunities
 As per clause 17.1, the employers need to pay redundancy payments to the employees as
per their duration of services.
Enterprise agreement can also benefit to the employees in many ways.
 As per the clause of 21.2 ,the minimum daily engagement of a full time worker will
be four hours and the maximum number of shifts can be five.
 As suggested by the clause of 13.3 a full time employee can take two consecutive
days week off per week and he can also take one weekend off each 4 weeks.
 All the casual workers are paid the hourly rate of the full time employee both at the
applicable level and at a casual loading. They will also be paid in accordance with
the pay arrangements under clause 24.
The enterprise agreements is both advantageous and disadvantageous. However, it is
mostly beneficial to the employers in a way like for example due to the method of more flexible
hours and rosters followed the exact operational requirements of the business are me which also
means improved service delivery which in terms also meet to better client satisfaction. The
enterprise agreement affects the pay of the employees in a way like with the review of the annual
wage there can be a rise in the consequent annual wage and the appropriate minimum wages are
also maintained. However, the Fair Work Act makes sure that an enterprise agreement should no
include National Employment Standards.

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Workplace and stakeholder diversity
Under the bargaining system of the labor’s all the agreements are required to comprise a
flexibility clause which states that both the employee and the employer can provide a flexibility
arrangement. The IFA was invented for the workers who were promised that they can use them
to achieve flexibility (Bailey & Peetz, 2014). The provision relating to personal leave states that
an employee can take two days of unpaid carer’s leave in such a case when the member of the
employee’s family requires support due to illness or emergency. The fair work act of 2009 states
that the flexibility in enterprise agreement can vary in any term. Both the employee and an
employer can suggest for an individual flexibility agreement.
Any kind of discrimination, harassment or sexual harassment and abusing any authority
is collectively referred as prohibited conduct. It ensures that all the staff members are treated
with respect and dignity. The provision that facilitates leaves for events of any religious groups
states that it provides respect and importance to any culture (Kato & Kodama, 2018). Employee
benefits can be termed as the non-wage compensation that are been provided to the workers
along with their normal wages. The above stated provisions are regarded as the benefits for the
employees. When the employers provide such flexibilities and access for the benefit of the
employees, the employers will also able to retain many qualified employees. The employee
benefits also prove to have improve the productivity of the employees as they are assured of the
security and also the workers can also experience a piece of mind which can lead to rise in
productivity.

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Discussion and conclusion
Most of the literature of human resource management are usually based on large firms.
Employment relationship can also be termed as industrial relationships which suggests that that
there is a presence of legal link between the employers and the employees . A research based on
employment relationship in manufacturing enterprises suggests that employees should be given
the access to become the decision makers. They should also be offered benefits and rewards for
the extra initiative they take in the workplace. A good policy also ensures that the employees
receives adequate safety in the workplace. A research also suggests that small manufacturing
firms also tend to place a high priority on the management of human resource. It is also
suggested that employees should be provided with the opportunities of work life balance.
Employee relationship was introduced in the field of human resource in order to
strengthen the relationship between the employers and the employees by resolving any kind of
issues in workplace, measuring the satisfaction of the employees and by providing support to the
performance system of the company (Bray & Stewart, 2013). It is very significant since the
success of the organization depends heavily on the productivity of the work force of the
company. For analyzing the effect of the enterprise bargaining, the concepts between enterprise
and bargaining needs to be distinguished. The movement to the enterprise bargaining was a
transformative moment in the industrial relations of Australia. The enterprise bargaining
agreement can prove to be both advantageous and disadvantageous for both employers and
employees. It can be disadvantageous for the employers as they require a lot of time and cost to
negotiate the employment bargaining agreement. There is a presence of strict process and
timeframe which needs to be followed. However, on the other hand the employees enjoy a lot of

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advantages in away that the employment bargaining agreement gives them an assurance or an
opportunity to benefit from the union representation.

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