Brazilian unions are suing the world’s largest McDonald’s
franchisee over allegations that it violated labor laws.
The suit, filed on Monday, alleges that the Brazilian
operations of Arcos Dorados paid below legal minimum wages, maintained an
unhealthy work environment and failed to make severance or retirement insurance
payments.
Some of Brazil’s largest labor groups are backing the
lawsuit. Ricardo Patah, president of UGT, or general workers union, said “We
will do everything that can be done to stop companies coming to our country,
violating labor laws and taking the profits out of our nation.”
McDonald’s spokesman stated “McDonald’s is not
responsible for working conditions or wages at franchised restaurants. I suggest referring your questions to
Arcos Dorados”.
Arcos Dorados, the franchisee, said “We have not yet been
officially notified of the lawsuit. We are absolutely confident in our labor
practices and comply with all laws and regulations. All our employees are
registered according to the law and receive remuneration and benefits complying
with collective agreements reached with unions”.
Arcos Dorados is based in Buenos Aires. The company
employs more than 90,000 people in 20 countries and territories throughout
Latin America and the Caribbean. It
accounts for around 6 per cent of McDonald’s global sales.
The company is facing a deepening economic crisis in Venezuela,
another important market, together with high inflation in Argentina and
currency depreciation and a slowdown in consumption in Brazil.
McDonald’s situation is not easier in the US. In some weeks the National Labor Relations Board (NLRB) will hold hearings
over allegations that McDonald’s and its franchisees violated worker rights,
including wage theft.
In a landmark decision that could deal a severe blow to
the franchise system, the NLRB ruled that the restaurant chain is a “joint
employer”, meaning it may be liable for unfair labor practices at its over
14,000 US restaurants. The NLRB decision is a win for unions in their effort to get the agency to
hold franchisers liable for labor violations by store owners.
The NLRB
stated: “Our
investigation found that McDonald’s, USA, LLC, through its franchise
relationship and its use of tools, resources and technology, engages in
sufficient control over its franchisees' operations, beyond protection of the
brand, to make it a putative joint employer with its franchisees, sharing
liability for violations of our Act. This finding is further supported by McDonald's,
USA, LLC’s nationwide response to franchise employee activities while participating in fast food worker protests to improve their wages and working conditions".
edited from Financial Times and NLRB
