McDonald's Management Issues

This paper discusses the management issues faced by McDonald's in terms of payment and exploitation of workers. It explores the entitlements and rights of employees in the Australian workplace, focusing on the minimum wage and working conditions. The case study highlights the company's practices of paying underage workers less than the minimum wage and reducing shifts for older employees.

Running head: MCDONALD’S MANAGEMENT ISSUES
MCDONALD’S MANAGEMENT ISSUES
Name of the Student:
Name of the University:
Author Note:

1MCDONALD’S MANAGEMENT ISSUES
Introduction:
The aim of this paper is to discuss an important entitlement in the Australian
workplace which are enjoyed by the employees of any organisation irrespective of their size
and capacities or for that matter the service area in the Australian business industries. This
entitlement is mainly related to have the proper payment according to the responsibilities of
the employees in a workplace. The employees in any workplace of Australia are empowered
with the entitlement to have correct wages or salary along with working conditions. This
paper will be discussing the background scenario of the issues taking pace in an Australian
workplace operating in the hospitality industry and how this issue relates to the entitlement
enjoyed by the employees. This paper will he also discussing the recent disputed about the
fulfilment of this entitlement and how the employees react actually.
A) Background to identify an entitlement in a workplace instrument:
Case with McDonald’s:
In this case the issue of payment can be seen in one of the largest restaurant chain of
McDonald’s which possesses international reputation for their products and customer service.
In this type of international company, the incident of unpaid work and exploitation of the
workers is not imaginable. However, the company has been accused for exploiting the
underage workers by paying them less than the expected minimum wage rate or what the
senior ones get. In this company, there are more than 100,000 workers working in all over the
branches of the country (Abc.net.au 2018). In this fast food giant, the nearly most of them are
aged between 14 and 18. Now youngest of these workers are paid 50 per cent of the
minimum wage under the Australian law. In addition to this, the company has been accused
to churn the older workers. Due to this, the older workers are getting fewer shifts (Abc.net.au
2018). This process by the company has been referred to an unspoken rule to get rid of the

2MCDONALD’S MANAGEMENT ISSUES
older employees. As the older employees are getting fewer shifts, they are not being able to
earn. This is leading company to present itself to be the largest employer of younger
population on the country and cost cutting severely. As the people from 14 to 18 years are
paid 50% less than the minimum wage rate, the company can employee two employees in an
expense of one. Similarly, the older employees if are expecting minimum wage according to
their age, are getting less shift so that the company does not have to pay higher wage
regularly.
Industrial instrument:
Fairwork.gov.au (2019), opines that the employees must get proper information about
their employment like hours of work and shift time based on which the payment will be done
by the employers. These rules are set in different places like as award, employment contract
and registered agreements. The entitlement of getting proper payment of salary or wages
from the employers is a part of employee rights. All the workers in Australia are entitled to
minimum wage based on which they get more salary when applicable but it is illegal to pay
the employees less than the minimum wage (Hradvance.com.au 2019). The employer is
needed to pay the employees at least once a month and provide pay slip within one day of
being paid. It can also be found in the code of conduct paper in the McDonald’s Australia. It
states that the company will operate according to the human rights practices of the
employees.
One term or entitlement:
The Fair Work Ombudsman Pay system help the employees to understand the minimum
rate of payment for the field of work. Under this entitlement, the employees are not to be
asked for doing unpaid work beyond what is reasonably required for demonstrating the skills

3MCDONALD’S MANAGEMENT ISSUES
for the job. This is applicable for the employees when they enter into any type of professional
meeting or any time spent for opening and closing of the business.
b) Comparison with other instruments:
Any company operating in Australia must have agreement with the Australian National
Employment Standards (NES) and awards. The industrial instruments assure the employees
to have minimum conditions provide by the employers. This are applied automatically and
cannot be overridden by any other arrangements between the employer and the employee. In
such case, the NES can override any terms contained in the modern award or enterprise
agreements.
This entitlement of minimum rate of payment has direct connection with the Fair
work Australia 2009. The chapter 2 relates to Terms and conditions of employment that
refers to the employment contacts of Australian National Employment Standards. Under this
standards there are 10 minimum employment entitlement are present which are to be
provided to all the employees irrespective of their class, caste, religion, age, gender and race.
This similar entitlement of the employees regarding fair wage and payment is seen in
the United States Department of Labour under which the Bureau of Labour Statistics works.
The occupations employee statistics published by Bureau of Labour Statistics reveals that
Restaurants and Other Eating Places are to employ workers according to their capacity but
must provide $10.38 as the hourly wage and $21,590 as the annual mean wage (Bls.gov
2019). The Department of Labour of the US has managed to control the organizations
through Wages and the Fair Labour Standards Act (FLSA) so that there is no incident of less
payment than $7.25 in any industry. This act keeps eye on the minimum wage, overtime pay,
recordkeeping, and youth employment standards that affect employees in the private sector
and in Federal, State, and local governments (Dol.gov 2019).

4MCDONALD’S MANAGEMENT ISSUES
c) Application of entitlements in the workplace and views of employees:
In the McDonald’s Australia, the organisational value relates to the proper
maintenance of the wage system guided by the Fair Work Ombudsman Australia. The Code
of conduct of this company relates to the fact that all the braches of this company will be
following the business model by the three legged stool of the operators or operators,
organizational employees and suppliers so that the interests are balanced properly. The
entitlement of the payment system comes under the human rights part of the code of conduct
where the company aims to work ethically by giving the employees satisfaction with their
work through proper payment and leave. Assurance of continuous improvement of the
employees by respecting their efforts and including diversity has been mentioned. The
application of underage employees and forced labour has been eliminated by the company.
However this company has been accused of exploitation of human labour.
Views of three employees:
The employees who work in the McDonald’s stores like Nelio Da Silva do not have
the knowledge that the companies operating in the Australian business sector cannot
discriminate the employees of same responsibilities in excuse of age. This person has started
working in one branch when he was 16 years old (Abc.net.au 2018). He got reduced
opportunities through shifts with his age and roster was changing. Similarly, the employee
served as manager named Max Beech has termed this type of exploitation to be the unspoken
rule for keeping the younger employee numbers higher (Abc.net.au 2018). If I would have
served the company like these employees I might be facing same harsh treatment. However I
would have tried to reach the employee rules of Australia to at least question my higher
authority for explanation.

5MCDONALD’S MANAGEMENT ISSUES
d) Media report of recent dispute concerning your entitlement
The news published in The Sydney Morning Herald in April 2016 refers to the same
issue faced by the employees in one of the reputed retail and Supermarket Company named
Coles regarding lower payment issue (Toscano 2016). The company has faced legal problems
due to exploitive initiatives. The Fair Work Commission has pointed out the fact that the
employees were given less than the awards and the basic wages safety net that led the
company to result in the underpayment scandal. The report has referred to the Fairfax Media
investigation that has revealed that the company along with another supermarket giant
Woolworths to have up to pay $5 million a year in commissions for payroll deductions.
Conclusion:
Therefore, it can be concluded that the employees in any workplace of Australia are
empowered with the entitlement to have correct wages or salary along with working
conditions. In this case the issue of payment can be seen in McDonald’s that is an unspoken
rule to get rid of the older employees. The problems of underpayment to the younger
employees for their low ages are combined with the problem of company giving fewer shifts
to the older employees. This leads the company to be able to cost cut regularly and play
unethically. The similar case is seen in the retail company named Coles also hence the
employees are not being able to earn. All of these peoples are controlled by the Fair Work
Ombudsman Australia which ensures the employee rights are properly maintained. It also
ensures that the employees in any industry or company get proper salary along with working
conditions.

6MCDONALD’S MANAGEMENT ISSUES
References:
Abc.net.au 2018. 'Learn and churn': McDonald's accused of exploiting young workers.
[online] ABC News. Available at: https://www.abc.net.au/news/2018-10-09/learn-and-churn-
mcdonalds-accused-of-exploiting-young-workers/10342934 [Accessed 27 Aug. 2019].
Bls.gov 2019. Combined Food Preparation and Serving Workers, Including Fast Food.
[online] Bls.gov. Available at: https://www.bls.gov/oes/current/oes353021.htm [Accessed 27
Aug. 2019].
Dol.gov 2019. Compliance Assistance - Wages and the Fair Labor Standards Act (FLSA) -
Wage and Hour Division (WHD) - U.S. Department of Labor. [online] Dol.gov. Available at:
https://www.dol.gov/whd/flsa/ [Accessed 27 Aug. 2019].
Fairwork.gov.au 2019. Welcome to the Fair Work Ombudsman website. [online] Fair Work
Ombudsman. Available at: https://www.fairwork.gov.au/employee-entitlements [Accessed 27
Aug. 2019].
Hradvance.com.au 2019. Industrial Instrument. [online] Hradvance.com.au. Available at:
https://hradvance.com.au/resources/the-hr-explainer/industrial-instrument [Accessed 27 Aug.
2019].
News.com.au 2018. Macca’s accused of ‘learn and churn’ practice. [online] NewsComAu.
Available at: https://www.news.com.au/finance/work/at-work/mcdonalds-accused-of-
exploiting-young-workers/news-story/02aba79c23a00a6344d04836c69a84f0 [Accessed 27
Aug. 2019].
Toscano, B. 2016. 'Low-paying' deal for Coles supermarket staff faces landmark challenge.
[online] The Sydney Morning Herald. Available at:

7MCDONALD’S MANAGEMENT ISSUES
https://www.smh.com.au/national/lowpaying-deal-for-coles-supermarket-staff-faces-
landmark-challenge-20160430-goiu60.html [Accessed 27 Aug. 2019].