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May 20, 2016
Published in
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theage.com.au

McExploited
REVEALED How one of Australia’s biggest
unions and McDonald’s cut a deal to kill off
penalty rates and pay the fast-food giant’s
employees wages way below the award.
PAGES 4-5

Macca’s workers underpaid by millions
Ben Schneiders
Nick Toscano
Royce Millar
Burger giant McDonald’s is
underpaying its Australian workers tens of millions of dollars a year
under a cosy deal struck with
Labor’s largest union affiliate that
excludes weekend penalty rates.
A Fairfax Media investigation
has found the Shop, Distributive
and Allied Employees Association
(SDA) negotiated a 2013 agreement under which some McDon-

ald’s employees are paid nearly
one-third less than the award – the
minimum pay and conditions
safety net.
Nationwide, workers at McDonald’s – Australia’s second largest
employer – appear to be out of
pocket by at least $50 million a
year. Those affected include young
workers who earn as little as $10.08
an hour.
The findings are based on hundreds of payslips, obtained by Fairfax Media, and the leaking of an
entire store’s roster that shows

63 per cent of workers at a large
Sydney outlet are paid less than
the award.
Brigid Forrester until recently
worked up to four shifts a week at a
McDonald’s store in Perth, including Sunday evenings from 4pm to
10pm. She did not get penalty
rates. ‘‘The weekends were tiring,
terrible shifts to work,’’ she said. ‘‘I
would always joke with people
about how bad our pay was, but I
was struggling to pay rent, and I
have to pay for petrol and for parking at university.’’

Substandard deals done by the
employer-friendly union may be responsible for up to half-a-million
workers in the wider fast food and
retail sectors losing hundreds of
millions of dollars a year.
The union is separately locked in
a similar controversy surrounding
its deal with Coles – the nation’s
third largest employer. The supermarket chain has since admitted
tens of thousands of its casual
workers have been underpaid.
The union’s agreement with the
country’s biggest employer, Wool-

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WORLD

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worths, is almost identical to the
Coles deal.
News of the underpayments
comes at an uncomfortable time
for Opposition Leader Bill Shorten,
who has made the defence of penalty rates a key part of his election
campaign, saying this week ‘‘only a
Labor government can be trusted
to protect our penalty rates system’’.
SDA insiders have expressed
concerns to Fairfax Media about a
Continued Page 4

COMMENT

Merely a
statement of fact
Peter Dutton did nothing more than tell
the truth, writes Malcolm Turnbull

Odd Spot

BusinessDay

Almost 100 pupils at the Elsa Perea Flores School in Tarapoto, Peru,
are being described as being in the grip of a mass case of demonic
possession. Experts are struggling to explain the phenomenon at the
school, reportedly built on a Mafia graveyard.

Airbnb sued for
ignoring racism
Page 24
NATAGE A001

 THE AGE

FRIDAY, MAY 20, 2016

4 NEWS

Union pay deal
leaves Macca’s
staff underpaid
From Page 1

string of sub-award deals sanctioned by the union leadership in
recent years.
This comes amid mounting concern about deteriorating workplace standards and the scandals
around 7-Eleven and the exploitation of temporary foreign workers.
The Fairfax analysis of the McDonald’s pay deal was done in conjunction with Josh Cullinan, a senior official at the National Tertiary
Education Union, working in a personal capacity, whose research unearthed the Coles scandal.
‘‘While debate rages about penalty rates it ought be remembered
that hundreds of thousands of
workers have already had their
penalty rates stripped by these bad
agreements which should never
have been approved,’’ said Mr Cullinan.
The McDonald’s national agreement, struck in 2013, contains no
weekend penalty rates and restricts late-night rates to a 10 per
cent loading
applying from
1am to 5am.
Under the national
fastfood industry
award, penalty
rates of 25 per
cent apply on
Saturday and
50 per cent on
Sunday
(75
per cent for
casuals),
as
well as higher
night-shift
loadings from
9pm to 5am.
McDonald’s has a mainly young,
often female, workforce. It is well
known internationally for its antipathy to unions, and has few other
union agreements across its vast
empire. It is under pressure internationally over pay and conditions.
The SDA, the country’s largest
private-sector union, is renowned
for its close relationship with
employers and its conservative,
Catholic, social agenda, including
opposition to same-sex marriage.
The McDonald’s agreement has
delivered the SDA thousands of
new and potential members, which
bolsters its clout inside the ALP
and, therefore, in debates on social/moral issues.
Under the McDonald’s/SDA
deal, workers mostly receive
slightly higher hourly wages than
the award, but not enough to cover
the penalties most of those who do
any night or weekend work would
otherwise receive.
An analysis of the roster for McDonald’s Cremorne store in
Sydney, and pay details of 170 nonmanagerial staff shows that the
worst-off employees almost always
worked some weekend or night
shifts. Combined, the underpaid
workers at the store were $107,000
a year worse off than under the
award.
‘‘The analysis shows beyond
doubt that two in three workers are
NATAGE A004

worse off,’’ said Mr Cullinan. ‘‘It
doesn’t matter if they are young or
old, if they are casual or noncasual. They are all worse off.’’
McDonalds spokesman Chris
Grant said it was wrong to suggest
McDonalds underpaid its workers.
He said the union deal provided
higher base pay rates across the
entire week ‘‘as opposed to penalty
rates that only apply to limited
timeframes’’, and included benefits beyond the award, such as
better leave and annual pay increases.
‘‘We are a 24-hour, seven-day-aweek business and our employees
tell us they love the flexible working hours we provide.’’
The McDonald’s agreement was
approved in 2013 by the Fair Work
Commission.
Under the Fair Work Act, agreements are meant to leave workers
‘‘better off overall’’ when compared to the award.
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.
That locked
in much lower
wages for a
four-year period, conservatively saving
McDonald’s
$200 million.
The Coles
underpayment row is likely to be resolved in
coming weeks, with the full bench
of the Fair Work Commission set
to rule on a challenge by Mr Cullinan to the Coles/SDA agreement,
which covers 77,000 workers.
That challenge has also delayed
talks between the union and Woolworths over a new workplace
agreement.
SDA national secretary Gerard
Dwyer disputed the findings of the
Fairfax analysis and said McDonald’s workers had voted for ‘‘significantly higher base rates of pay’’ to
compensate for the lack of penalty
rates.
‘‘In the vast majority of cases,
this leaves the worker better off
overall,’’ he said.
‘‘McDonald’s
workers
are
among the best paid fast-food
workers in the world.’’
Woolworths
spokeswoman
Claire Kimball defended its existing agreement, stressing it had
been approved by the Fair Work
Commission.
She confirmed Woolworths was
‘‘monitoring’’ the Coles case.
The Fair Work Commission at
the time said it was satisfied requirements for approval of the McDonald’s 2013 agreement had been
met, and that the company had
provided indicative work hours
and pay rates to show workers
were better off. The SDA did not
challenge its approval.

A 19 year old
part time
tim in SA

An 18 year old
casual in Vic

$2463

$5773
worse off
wor

worse off
wo

Pai under EBA: $22,722
Paid
722
Aw
ward $20,259
Award:

A 21 year old
part
pa time in NSW
W

$3986
worse off

Paid u
under EBA: $20,255
A
ward $24,242
Award:

Paid under
E
EBA:
$19,005
Aw
Award:
$24,778

A 17 year old
o
part time in NSW

$1882
worse off

Paid under
EBA: $5917
Award: $7800

Brigid Forrester, 19, says she could no longer afford to word
at McDonald’s. Photo: Tony Ashby

Labor should order unions to
Bill Shorten and the ACTU have
made ‘‘protecting’’ penalty rates a
key election issue.
This, while Australia’s biggest
private sector union is cutting
deals that leave workers without
penalties.
The McDonald’s agreement with
the Shop, Distributive & Allied
Employees Association is an example. Under the deal, McDonald’s
pays no penalty rates on weekends.
But the fast-food award – the
legal pay and conditions safety net
– sets penalty rates at 25 per cent
on Saturday and 50 per cent on
Sunday (higher still for casuals).
The Macca’s deal underlines the
grotesque unreality of the penal-

A ALYSIS
AN
ANALYSIS
S

Ben
Schneiders
ties debate. Australia’s award system looks great on paper, a safety
net of generally decent wages and
conditions that compares well to
the pittance earned by the low paid
in the US and elsewhere.
Yet at the cowboy end of the labour market, foreign workers are
routinely exploited in ‘‘black jobs’’,
the 7-Eleven scandal the most highprofile case to date.
Anecdotally, judging from the

flood of emails after the Fairfax
‘‘black jobs’’ series in October, paying penalty rates is regarded as
optional by many small hospitality
businesses.
But you’d assume that those who
work for the country’s largest employers, under union agreements,
would be paid proper, award rates.
Not so.
Coles, McDonald’s and Woolworths, our three biggest employers, have agreements that substantially undercut minimum conditions, including penalty rates.
It is likely hundreds of thousands are worse off as a result.
Trading off penalty rates for
higher ordinary-hour wages can be

 FRIDAY, MAY 20, 2016

THE AGE

NEWS 5

Work with the lot,
hold the penalties
Nick Toscano
Most Australian McDonald’s
workers are still in school,
thrilled to be earning a buck in
their first real job. But for others who rely on the work, meagre pay makes it tough to pay
the bills. More than two-thirds
of the fast food giant’s workers
are paid less than the basic
wages safety net, known as the
Fast Food Award.
Even a conservative analysis finds McDonald’s workers
nationally are underpaid tens
of millions of dollars a year
due to the controversial unionbrokered agreement.
MEGAN, 18, VIC
It’s Saturday night in Melbourne and hungry crowds
straight from the footy are
looking for a feed.
The staff at the McDonald’s
front counter are all young and
almost all casuals. It’s 18-yearold Megan’s* fourth shift this
week.
‘‘I’m trying to pay for half of my
university fees, but that’s not
going so well at the moment,
because of how bad my pay
is,’’ she said. ‘‘If you look at other hospitality jobs, they get
paid higher rates on the weekend, but we get nothing.’’
Megan juggles university with
weekday and weekend work
starting as early as 7am, and
evening shifts knocking off
around midnight.
If she were paid according to
the award – the industry’s
wages safety net – Saturday
night shifts would attract generous penalty rates. Under the
McDonald’s agreement, she
won’t earn more than $17 an
hour unless it’s a public holiday. ‘‘It’s hard working on
weekdays, going to and from
uni, and then weekends too
but not getting any penalty
rates,’’ she said.

BRIGID, 19, WA
Brigid Forrester, an exMcDonald’s employee from
Perth, worked up to four shifts
a week, including Sunday
nights from 4pm to 10pm.
Hired as a casual, the 19-yearold’s pay was $20 an hour. If
she had been covered by the
award, her normal hourly rate
would have been roughly the
same, but would climb to as
much as $23 in the evenings
and almost $30 on Sundays.
‘‘The weekends were tiring,
terrible shifts to work,’’ she
said.
Ms Forrester said she quit McDonald’s in November after
the store management attempted to move all the casual staff
into part-time positions, meaning she would lose her casual
loading and her take-home
pay.
HUGO, 21+, NSW
Hugo* has worked on-and-off at
a McDonald’s for several years.
He recalls a 2009 staff meeting
when company and union representatives encouraged workers to sign onto a new agreement that was pitched as a
weekly ‘‘$10 upfront wage increase’’. ‘‘People who relied on
the penalty rates the most, the
people who actually needed
them, lost out,’’ he said.
A part-time staff member, he
earns $20 an hour regardless of
whether it’s a weekend, weekday or evening shift. The only
higher rate is an extra 10 per
cent for the few times he works
between 1am and 5am.
If he were receiving award-rate
pay, his base $20 an hour would
become $22 between 9pm and
midnight, $23 between midnight and 6am. On weekends,
he would get $25 on Saturdays
and $30 on Sunday.

stop cutting sweetheart deals
fine, as long as the wages are raised
sufficiently. At McDonald’s, and
elsewhere, they clearly are not.
The Macca’s army of young
workers are at least $50 million
worse off than they would be if no
deal existed with the ‘‘shoppies’’
union. This is a company that made
a profit in 2013 of $234 million. It
can afford to pay its workers properly.
The SDA is the largest affiliate of
the ALP and one of the biggest
ACTU unions. Its numbers give it a
powerful conservative voice on social and moral questions.
It often appears more interested
in wielding political power in such
debates – same-sex marriage for

instance – than in representing
vulnerable workers.
Its business model is peculiar: it
pays large commissions – about
$5 million a year – ostensibly to

Our three biggest
employers have
agreements that
substantially undercut
minimum conditions.
reimburse the cost of payroll deductions.
As a result, it has about 200,000
members, many more than the

dwindling blue-collar unions that
once dominated the labour movement, such as the AWU and
AMWU.
Unionism in Australia is critically ill. Just one in 11 private sector
workers is a member. Wages
across the economy are barely
growing and exploitation is rife.
This is terrible news for vulnerable, low-paid workers.
If the ACTU and Labor want to
pretend they are campaigning for
penalty rates, the first call they
should make is to their own big
backer, the ‘‘shoppies’’ union.
Then they should order them to
stop cutting sweetheart deals with
big business.

GPS bracelets
‘can be removed’
Tammy Mills,
Chris Vedelago,
Cameron Houston
The GPS bracelets used to track
Victoria’s most dangerous sex offenders can be removed with an ordinary pair of scissors, a Corrections
Victoria official has told a Melbourne court.
During a bail application in the
Melbourne Magistrates Court for a
convicted murderer and sex offender now accused of raping a woman,
manager Sharna Clump testified the
bracelets could be cut off.
‘‘It does take some force to take
them off, but it can be done,’’ she said
under questioning from prosecutor
Jo Piggott.
When asked how Corrections
staff remove them, Ms Clump said
they can be cut with scissors.
‘‘Normal scissors?’’ Ms
Piggott asked.
‘‘Yes,’’ Ms Clump said.
The revelation fuels concerns previously raised
about the quality of the
technology since it was introduced three years ago.
There have been a number of
incidents where the devices have
malfunctioned – signal drop outs,
coverage ‘‘black spots’’, false alarms,
and offenders being able to remove
the devices with ease.
It comes as the Andrews government, in an attempt to fix some of
the catastrophic failures that led to
the murder of Doncaster schoolgirl
Masa Vukotic, announced recently it
would give the courts beefed-up
powers to order violent offenders to
wear ankle bracelets for the rest of
their lives.
The latest issue with the bracelets
arose in the hearing on Thursday
when the accused’s lawyer, Erin
Ramsay, suggested her client – who
cannot be named for legal reasons –
could be bailed to live at Corella
Place, a facility designed to house

sex offenders deemed too dangerous
to live in the community.
Police and Corrections both argued the accused man should be
kept in custody, and not bailed to the
Ararat facility.
Ms Clump, who is Corrections
Victoria’s manager of detention and
supervision order operations, was
called to give evidence about the security at Corella, where all 53 residents wear two types of bracelets.
One monitors their location within
the facility and the other tracks
them when they go out into the community accompanied by a Corrections worker, she said.
Corella, she said, was designed to
house convicted sex offenders who
had served their sentence, and was
not for people on remand facing
charges.
Ms Clump said two of
the 53 residents
were on bail, but
Corella was their
primary place of
residence
when
they re-offended.
Ms Ramsay said
there was ‘‘simply no
possibility’’ her client
would reoffend if he was bailed to
Corella.
The accused, who was convicted
of a murder of a Chinese exchange
student while she was walking home
from a train station, cannot be
named for legal reasons.
Detective Senior Constable Mathew Evans told the court the man
raped a teenage girl just five months
after he was released from prison on
parole. He dragged her into some
bushes and assaulted her, Senior
Constable Evans said. He was convicted of the crime.
The man is facing three charges,
two of rape and another of attempted
rape against the same alleged victim
in March this year. He is on a supervision order, which has been extended
twice in the past six years.

Man jailed over 1987
rape of pregnant woman
Larissa Ham
Rania Spooner
A man who raped a pregnant woman in her home then later
snatched a sleeping toddler and indecently assaulted him could serve
as little as three years in prison for
the 1987 crimes.
Crucial DNA evidence that sat in
a freezer for nearly three decades
formed the heart of the case
against Epping man Andrew
James Schwab. The samples were
among thousands taken by police
in the late 1980s and frozen in the
hope that technology would one
day advance to the point where
DNA could be tested.
On Thursday Schwab was jailed
for six years with a minimum of
three for the rape and aggravated
indecent assault. He pleaded guilty
to both crimes after his DNA was
matched to the historical samples.
The 53-year-old has already
served two separate prison terms

for attacks on seven other victims
during a violent sexual rampage in
1987 and 1988.
On Thursday, Victorian County
Court Judge Meryl Sexton said
Schwab robbed his first victim of
the life she had planned, and the
second offence on the boy was ‘‘as
serious as one can comprehend’’.
About 9am on January 13, 1987,
Schwab entered the bedroom of a
sleeping woman, then 21, and woke
her up by jumping on the bed, then
hitting her in the face. She pleaded
with him not to hurt her because
she was pregnant. ‘‘Chillingly, you
said you knew,’’ Judge Sexton said.
He then raped her. About four
weeks later Schwab snatched a
sleeping two-year-old boy from his
bed, removed his lower clothing
and indecently assaulted him.
Judge Sexton took into account
the delay, Schwab’s guilty plea and
the fact he had expressed remorse
for these crimes and demonstrated
– with AAP
some empathy.
NATAGE A005