McDonalds has struck a deal with a key union that deprives many workers of weekend penalties. Photo: Christopher PearceDirty little secret of the penalty rates debateWork with the lot, hold the penaltiesHamburgled: Workers lose in union pay deals

Burger giant McDonald’s is avoiding the public spotlight in the row over its underpayment of fast-food workers, instead relying on its “partners” -the shop assistants’ union and employer lobby the Australian Industry Group – to represent it.

The multinational has written to its network of franchisees following Fairfax Media revelations about it underpaying employees by tens of millions of dollars under an agreement with the Shop, Distributive and Allied Employees Association.

The 2013 agreement excludes weekend penalties and was signed off by the Fair Work Commission.

In hisemail to the McDonald’s network, obtained by Fairfax Media, Australian chief executive Andrew Gregory saysthe “last thing” McDonald’s wantsis to “get into a public debate” about enterprise agreements.

“What we are workingto do is broaden the focus of this story, to make it more about the issue of industrial relations and less about McDonald’s.” Follow BusinessDay on LinkedIn

The email provides a rare insight into McDonald’s political strategy and, in particular, the coziness of its relationship with the conservative SDA, the ALP’s largest union affiliate.

In it, Mr Gregory says McDonald’s is relying on its “partners” to makeits case in the pay and penalties debate. “The SDA will continue to clarify the facts on our behalf,” he writes.

He alsoreveals McDonald’s is in ongoing, “direct” discussions with government ministers, and with “both sides of politics”, about its stance on industrial matters.

A package of documents distributed by Mr Gregory tothe McDonald’s franchisees – they control hundreds ofstores – includes media releases from both the SDA and the AIGroup. As McDonald’s requested, both the union and employer lobby were active in the media on Friday.

Pressed for his view,Australian Council of Trade Unions secretary Dave Oliver said he understood the SDA/McDonald’s agreement had been struck according to an enterprise bargaining system that allows employers and unions to negotiate on pay and conditions above the minimum, and subject to the Better Off Overall Test.

However, working closely, the SDA and McDonald’s were able to largely skip around that legal requirement by signing the agreement in mid 2013 and measuring it largely against archaic state awards.

The Fairfax Media analysisfound that under the agreement, some McDonald’s employees are paid nearly one-third less than the award, supposedly the minimum pay and conditions safety net

It estimates that, nationwide, workers at McDonald’s,Australia’s second-largest employer, appear to be out of pocket by at least $50 million a year. Under the McDonald’s and union deal, workers receive fractionally higher hourly wages but not enough to compensate most of those who work nights or weekends.Those affected include young workers who earn as little as $10.08 an hour.

The McDonald’s findings are based on hundreds of payslips, obtained by Fairfax Media, and the leaking of an entire roster that shows 63 per cent of workers at one store are paid less than the award.

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