Workers in the fast food industry in New Zealand scored a spectacular victory over ‘zero hour contracts’ earlier this year. The campaign played out over the national media as well as on picket lines. The victory was seen by many observers as the product of a determined fight by a group of workers and their union, Unite. It was a morale boost for all working people after what has seemed like a period of retreat for working class struggle in recent years.
Workers in the fast food industry have long identified ‘zero hour contracts’ (ZHCs) as the central problem they face. ZHCs don’t guarantee any hours per week. Meanwhile, workers are expected to work any shifts rostered within the workers’ ‘availability’. Managers have power to use and abuse the rostering system to reward and punish, without any means of holding them to account.
This year, all the collective agreements with the major fast food companies expired on March 31. We were already in dispute with Wendy’s, as its agreement remains unresolved from last year. Unite was determined to end the system of ZHCs and get guaranteed hours included in the new collective agreements. We knew this would be a tough battle and we needed to prepare for it if we were to have a chance of success. At organising meetings I would sometimes use a phrase that appealed: ‘If you want peace, prepare for war’.
ZHCs are not a new phenomenon. Becoming entrenched in the 1990s during the dark days of the neo-liberal Employment Contracts Act, they affect hundreds of thousands of workers in fast food, cinemas, hotels, home care, security, cleaning, hospitality, restaurants and retail.
The fast food industry in New Zealand includes the foreign- owned McDonald’s, Burger King and Domino’s Pizza chains, locally-owned businesses that pay for the right to market brand names in New Zealand like Wendy’s and Restaurant Brands, and home-grown brands like Hell’s Pizza and Burger Fuel which also have international ambitions.
While we have been successful in negotiating collective employment agreements with McDonald’s, Restaurant Brands, Burger King and Wendy’s, none welcomed Unite’s presence. However, the industry’s competitive nature and companies’ desire to protect their ‘brands’ gave us leverage at times to amplify the organising we have been able to do on the ground.
It took a major, national SupersizeMyPay.Com campaign from 2005-2006 to get the first collective employment agreements. Our targets in that campaign were threefold: a major boost to the minimum wage, an end to youth rates, and secure hours. Through that campaign and later rounds of bargaining (including major disputes with McDonald’s in 2008 and 2013), we made significant improvements.
Whilst the minimum wage continues to govern the start rates, it was during the first period of bargaining with these companies when there was a substantial increase in the real value of the minimum wage under the 1999-2008 Labour-led government. The previous National Party-led government let the minimum wage drop in value by increasing it only once in nine years
Unite kept the pressure on the government elected in 2008 by organising a petition drive in 2009 to boost the minimum wage to $15 an hour which gained over 200,000 signatures. Partly due to that, the new government felt obliged to maintain the minimum wage at around 50% of the average wage.
We also got rid of youth rates, increased the paid break from 10 to 15 minutes, and won new wage rates above the minimum for workers after a certain period of time on the job, or in recognition of training. The frequency of paid and unpaid breaks was improved and enforced more effectively.
We sought to improve the rostering regime and security of hours by introducing clauses into the collective agreements that said the companies should not hire staff before offering hours to existing staff. But these clauses proved ineffective and almost impossible to enforce given the companies complete control over rostering. We came to the conclusion that secure hours needed to be replaced by guaranteed hours as the only way to incorporate enforceable clauses in the collective agreements.
Deciding to take on the major companies in a campaign to end a practice they have been happily using for several decades was not made lightly. We were convinced that so long as managers had the power to use and abuse workers through complete control over rostered hours, we would always have an uphill battle in getting workers to assert their rights and join a union.
Organising fast food workers is very difficult – they are spread across hundreds of small establishments, staff turnover is high, many are migrant workers on temporary visas which are often tied to a company. Unite has 7,000 members (including 4,000 in fast food) and must recruit 5000 members a year just to remain level. To boot the companies remain virulently anti-union.
Preparing the campaign
Unite was fully aware that all the fast food contracts were expiring at the same time. We decided to make a virtue of necessity by turning this year’s bargaining into an industry-wide campaign along the lines of the SupersizeMyPay.Com campaign of a decade earlier. We suspected it would also require a similar investment of resources and determination to see the campaign through to the end.
At the end of bargaining two years ago, we informed all the companies of our intention to campaign for and win guaranteed hours into the collective agreements the next time we bargained. We wanted no misunderstandings or excuses on their part. We reminded them of this determination each time we met over the last two years.
We started the final preparations for preparing the campaign in the middle of last year. How we represented the campaign and the slogans were going to be important. We liked the use of ‘zero hour terminology that has been used to describe these contracts in Britain. It was accurate and able to shock. But we needed to ‘brand the companies as zero hour employers. That proved to be quite easy because the employment agreements almost boasted of this reality.
We did a survey of fast food members, with 1,000 participating online. The results showed workers want more hours and more secure hours. From this, we needed hard data for the campaign – average age, how many with kids, average hours worked, changes from week to week – so we started identifying ‘faces’ for the campaign.
We wanted members who represented the reality of the workforce which included people with dependants, not just students, and so we could explain it is impossible to get a mortgage or other loans on these contracts and point out the huge difficulties imposed on workers if they had to negotiate the interface with Working For Families, the in-work tax credit used by the government to top up low wages, which assumes regular permanent hours.
In November 2014, we did a final visit to all fast food employers and gave them a heads up on what we want from the negotiations this year. No one could claim to be surprised by the demand. We began talking to the media about the existence of ZHCs in the industry and how bad they were for workers. ZHCs entered the public discussion like never before and the plight of many workers in vulnerable employment positions became newsworthy.
In early December 2014, we held the Unite National Conference which formally launched the campaign. We had reps from other unions and three opposition party leaders endorse it. Labour and the Greens announced that they would have MPs sponsor bills for debate in parliament to outlaw zero hour contracts.
We then spent a month engaging with members and doing surveys, discussing claims and getting worker volunteers for the campaign. We organised a national speaking tour with two young workers from the US fast food workers campaign. The US workers and Unite officials were able to brief a meeting of opposition MPs at parliament on the campaign as part of their visit. A national fast food workers conference in February signed off on the claims for the companies and nominated delegates for bargaining. Media coverage was extensive as a result of Unite providing interviewees to tap into the ‘human interest’ angle.
Morale in the bargaining teams was high. We were going into bargaining with the backing not just our members but with significant media support and the overwhelming support of people throughout New Zealand. We expected movement from Restaurant Brands first because we were stronger there and because the company had begun centralising the roster process we thought they may be looking more seriously at our bargaining demands. However, it dragged its feet, making no meaningful offer on guaranteed hours until the contract had expired and we had told them we were going to a strike ballot. When they did come back with an offer early April, it was a meaningful one.
They promised to guarantee 80% of hours worked over the previous three months. This would be a rolling average that would allow the guarantee to improve over time – especially for those who volunteer for extra shifts. Moreover, the union and the company also agreed to trial permanent shift patterns at some stores to see how that may improve things. Most workers want regular shift patterns as well as secure hours and both the company and the union expect that to be the final outcome of a guaranteed hours regime.
Yet by early April, neither Burger King nor McDonald’s had made a meaningful offer. Secret strike ballots as required by law were held at both companies. These are usually held as an online ballot, as it is very difficult to hold meetings at which all members can attend and we have better participation. Members overwhelmingly approved taking action.
Members at Burger King were particularly keen to strike. Though we hadn’t felt strong enough to take action at here in previous rounds of bargaining after the first SupersizeMyPay campaign, the success of pushing back the company’s anti-union drive in 2012 and the confidence workers were getting with the public support over ZHCs meant our members told us they wanted to walk.
Maybe that is why the company decided to make a last minute offer to end ZHCS on the strike’s eve. Its offer was even more comprehensive than Restaurant Brands, proposing to move straight to fixed shifts rostering within six months. Moreover, when a worker left the company, their shifts could be given to existing staff who wanted them and be incorporated in their guaranteed minimum. Wendy’s workers took action in February and March while the other companies were bargaining. Other companies like Burger Fuel and Hell’s Pizza were making public announcements that they were no longer using ZHCs without us even bargaining with them.
With the offer from Burger King meeting our demands, it was removed from the day of strike action. The advantage was that the most stubborn opponent, McDonald’s, had successfully put itself into the frame as a recalcitrant one to hold out.
Throughout bargaining, McDonald’s had been actively taking steps to undermine Unite. It told non-union staff earning more than the minimum wage that they would be getting the same 50 cent increase as the minimum wage staff as a flow on effect of the minimum wage increase. However, union members earning above the minimum wage were told they would not get a pay increase until there was an overall settlement of the agreement and any settlement would not be backdated to the ending of the last agreement. It obviously hoped that union members would quit the union in order to get the pay rise.
Then McDonald’s made sure the non-union staff got their pay rise before union members by delaying bargaining for two weeks with the claim they would be bringing a meaningful offer on guaranteed hours that would be a ‘game changer’. But the offer was a joke, affecting at best 10% of staff. The offer underscored the importance of getting rid of ZHCs because McDonald’s wanted the right to take secure hours away again even for this group of workers if they did two ‘no-shows’ (when staff don’t turn up for a rostered shift and have failed to notify the company beforehand or have given what the company considers an inadequate reason for the absence). By including that escape clause, McDonald’s was confirming it viewed rostering as a tool to discipline and punish workers without a proper lawful process. At this point, we told it we were in dispute and would be taking a ballot for strike action.
However, bargaining continued with McDonald’s after the strike ballot was held and before the day of action. McDonald’s made another deliberately deceptive offer, claiming to get rid of ZHCs and released that offer to the public while we were still in bargaining. They said they would guarantee 80% of rostered hours. That formula was nonsense: any company can guarantee 100% of rostered hours because they control the roster. Rosters go up and down. They are at the discretion of the company. The union can’t see them or enforce anything to do with them. On average workers work 20% more than their rostered hours because over employing and under-rostering is the essence of ZHCs. It keeps workers willing to jump at offers of more hours. That is why we decided to use the formula of 80% of hours worked with Restaurant Brands. We can monitor and enforce that formula.
McDonald’s was hoping to appear reasonable and paint the union as acting in bad faith. But its strategy backfired and the media saw its offer for what it was in claiming there was no difference between rostered hours and hours worked. It asked for a further round of bargaining with a mediator from the Ministry of Business Industry and Enterprise just before the strike but to no avail.
Coincidentally or not, Unite offices were burgled and trashed in the early morning of April 16 and some expensive cameras, projectors and other gear was stolen. However, if someone was trying to hurt us, they failed. Dozens of individuals and unions rallied to contribute to a fund that has more than covered our costs. It was a lovely expression of solidarity and a thank you to Unite for its campaign.
May Day action called
With McDonald’s now a more isolated target, we called another national day of action for 1 May. This time we appealed for unions, community groups, political parties and churches to Adopt a Maccas, namely, choose a store they could focus on for leafleting and picketing on that day. We explained that the workers needed the solidarity of the community to win. Many workers would take action, but given the retaliation possible by managers and franchise owners, we accepted that many members would be fearful and not all our members would take action. These workers also needed solidarity outside their stores to encourage and embolden them to take action wherever possible.
Then McDonald’s came to bargaining with a clear proposal to end zero hour contracts and a timetable for implementation based on the formula of guaranteeing 80% of hours worked, with this calculation to be repeated every three months. New staff would be given an initial guarantee which would be reviewed after working through a three month block. But when we asked for clarification of what this meant for secure and regular shifts, and expressed a desire to continue bargaining on some other matters, the company walked out.
We knew we had achieved a huge victory in forcing the company to move seriously on ZHCs. We knew longer term this would give workers more confidence to assert their rights, including their right to join Unite. It did appear, though, McDonald’s had convinced itself that we just wanted to keep pressing on for striking on May Day regardless. At this stage, our former National Secretary and now a political adviser to Labour, Matt McCarten, said he was available to open channels between Unite and McDonald’s if we both agreed. With his help, we concluded a deal just before midnight on April 29. We called off the May Day action, having achieved a comprehensive victory over ZHCs.
Government under pressure
Feeling a bit of pressure on ZHCs, the government announced that it is doing a rethink on whether these contracts should be allowed. My fear is that they will only deal with the very worst abuses (like exclusive ZHCS and short-notice cancellation of shifts) and leave the big fast food, cleaning and security companies alone. But our campaign has made the issues very clear and it will be hard for the government to wriggle out of taking some action.
Mike Treen is the National Director of Unite. This article is an abridged version of a longer one – see http://www.unite.org.nz/how_unite_took_on_the_fast_food_companies_over_zero_hour_contracts_and_won