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McDonald’s concession on zero hours contracts

McDonald'sAuthor: Craig Phelan, professor of Modern History, Kingston University

The global restaurant chain McDonald’s has offered 115,000 employees in the UK a choice between their current zero-hour contracts and fixed-term contracts. This corporate decision has major implications for the future of work, the trade union movement, and the upcoming general election in Britain.

For the majority of workers in both the public and private sectors, employment is now far less secure than it was a generation ago. The least secure workers are those found in what the International Labour Organisation calls “non-standard forms of employment”. These include temporary and part-time employment, casual and seasonal labour, and fixed-term contract labour.

Zero-hours workers are not guaranteed work but remain “on call” and available to work. The amount of work per week is at the discretion of the employer, and workers are not paid for the hours that they remain available. Typically, those under zero-hour contracts do not receive holiday or sick pay, are not entitled to redundancy pay, and can be dismissed without cause.

McDonald’s use of these contracts is no surprise. They are commonly associated with employment in restaurants, hotels and retailers. Although they have been around for years, there has been a sharp increase since the 2008 global financial crisis. In the spring of this year, an all-time high of 910,00 workers in the UK were under zero-hour contracts.

Waiting game. Dmitry Kalinovsky/Shutterstock

‘Disposable labour’

The Trades Union Congress (TUC) has condemned zero-hours contracts as a scourge of labour rights and a symptom of the relentless employer crusade to make employment more precarious and workers more vulnerable. Such contracts allow bosses to treat workers like “disposable labour”, TUC General Secretary Frances O’Grady said last month.

If you’re on a zero-hours contract you have no guarantee of work from one day to another. Put a foot wrong and you can be let go in a heartbeat.

O’Grady and other union leaders have a difficult task, however. Trade union membership is at an historic low, with just 13.9 per cent of private sector workers organised (the public sector remains the bastion of trade unionism, with 54.8 per cent of workers in unions).

Given that picture, can we really interpret the McDonald’s decision as a win for pressure brought to bear by unions; perhaps it is instead a canny ploy by the restaurant chain’s management?

Flexible friend

Paul Pomroy, McDonald’s UK CEO, recognised in an article last year that people associated working at his company with poor pay, poor conditions, and poor prospects. His argument against that view is that a job at McDonald’s is a “stepping stone” to other jobs and careers – and in many case becomes a career in itself.

As for zero-hour contracts, Pomroy prefers the word “flexibility”. He said in that 2016 article that most people were satisfied with their zero-hour contracts. But he was aware even then of a “small but growing number of employees” for whom fixed hours would offer better access to financial contracts such as a car loan or mobile phone. That prompted trials which offered a choice to employees between fixed and flexible contracts, and which has now been rolled out to all zero-hours staff.

But McDonald’s decision to give this choice does not necessarily represent a new-found genuine concern for employment rights. Rather, it is likely a response to a growing problem that many companies are facing, coupled with pressure from unions and other bodies. The chain may well have also been reassured that more than 80 per cent of those involved in the trials decided to stick with their zero-hour contracts.

Playing ketchup

The GMB is the principal union representing workers at McDonald’s, and has been engaged in a long fight to replace zero-hour contracts with 40-hour-per-week contracts with pensions and sick pay. Employees at McDonald’s, says GMB Regional Secretary Paul Maloney, “deserve proper dignity at work, rather than exploitative, hand-to-mouth contracts”.

A Fight for $15 march in the US. SEIU Local 99 | Education Workers United/Flickr, CC BY-NC

The Bakers, Food and Allied Workers Union (BFAWU) has also participated, establishing a “Fast Food Rights” campaign with links to groups around the world. Both UK unions are kindred spirits with one of the fastest growing and most successful players on the US labour scene, the Fight for $15 campaign. What began as a small but vocal group of fast food workers has become a vibrant and successful movement among all workers on hourly-paid contracts.

The zero hours move by McDonald’s could be seen as a tactic to stave off these growing trade union demands for wage increases and a 40-hour week. By asking workers to decide individually rather collectively on the type of contract they prefer, McDonald’s UK is likely also hoping to stave off a trade union recruitment drive.

Labour link

Corbyn has reasserted union links. EPA/ANDY RAIN

A modest victory, however, is still a victory. This genuine achievement should represent a boon for the Labour Party’s election campaign as polling day approaches on June 8. By showing that they remain vibrant enough to achieve a win now and again, the trade unions have gone some way to justifying Jeremy Corbyn’s faith.

Corbyn has aggressively reasserted those ties as the campaign ramps up. He told supporters in Scotland: “Labour will never, ever apologise for the closeness of our relationship with the trade union movement.” The relationship had been in steady decline since the emergence of New Labour, but Corbyn seems intent of rekindling the connection.

He vowed that one of the first things a new Labour government would do would be to repeal the “vicious Tory Trade Union Act” of 2016. If the protest against zero-hour contracts and other insecure working is sustained and successful, and feeds into a larger protest against austerity, the Labour Party might see a route to bolster what looks like a deeply difficult election fight.

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