McDonalds UK worker strike

What does it mean for UK franchising?
McDonalds UK worker strike
3rd September, 2017

Workers in McDonalds in Cambridge and Crayford have made headlines by staging the first ever strike by McDonald’s workers on UK soil.

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 lawyer experienced in the franchise sector to understand the risk that they may be exposed to now.

For more information on any of the matters arising from this Briefing or franchising generally, please contact Richard Murrall on 01279 713 830 or email him at richardmurrall@pellys.co.uk.

Richard has 30 years experience working in the franchise sector for both franchisors and franchisees.

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