Published On: September 2, 2015

McDonald’s Faces Accusations of Employee Mistreatment

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McDonald’s Corporation, the world’s biggest fast-food chain, was accused of mistreating its employees and avoiding taxes during a Senate hearing in Brazil last week. At the hearing, politicians, union leaders, and workers from five continents voiced their complaints.

Brazilian Senator Pablo Paim organized the Senate hearing to allow both sides to state their cases. McDonald’s Corporation chose Arcos Dorados Holdings Inc. to represent it at the Senate hearing; however, Arcos chose not to attend the hearing and instead submitted a written statement.

The statement submitted by Arcos said in part: “We are absolutely convinced that the company has complied with labor laws ever since it opened its first restaurant in Brazil 36 years ago.” It said the company was proud to be the top first-job employer for young Brazilians. Arcos is the world’s largest McDonald’s franchisee and its main operator in Latin America. It employs 95,000 people in Latin America and had sales of U$3.7 billion in 2014.

One of Brazil’s largest labor federations, the UGT, has filed a complaint against Arcos, asking prosecutors to investigate allegations of tax evasion, unfair competition, and violation of franchise laws. Arcos said it had not been informed of the complaint and that it was confident it was “rigorously” following Brazilian laws. Previous legal complaints in Brazil have not affected the company and regulatory labor authorities have not taken action.

Protest poster at McDonald's in Brasília. Credit: Reuters/Adriano Machado

Protest poster at McDonald’s in Brasília. Credit: Reuters/Adriano Machado

Witnesses at the hearing called on Brazil’s Congress to open an investigation into the labor practices of the fast food industry in Brazil. However, that would require the signature of 80 lawmakers and concrete evidence of abuses, said Congressman Antonio Carlos Mendes Thame, who attended the hearing.

The call for an inquiry into the fast food industry was backed by 19-year-old Lucas da Cruz Marques, who spoke to the Senators. Lucas worked for 18 months at a McDonald’s in a São Paulo metro station until he was fired last month after joining a Union to press for better working conditions. “I thought it was a good career opportunity to go and work for a multinational company,” he said. Instead, he found a company that changed workers’ hours in order to cut their pay.

Union representatives from the US told Brazil’s Senators that McDonald’s franchisees in Brazil have denied workers’ pay for extra time worked, not allowed them to join Unions, and employed teenagers in their kitchens without protective gear, causing some to suffer burns from frying grease and grills.

McDonald's protest in US

McDonald’s protest in US

“Instead of feeding society with good jobs and paying its fair share of taxes, McDonald’s feeds on communities, forcing people into dead-end jobs and avoiding taxes,” Scott Courtney of the US-based Service Employees International Union (SEIU) said.

Lately, McDonald’s has come under increasing scrutiny worldwide for allegations of labor abuses, health and safety violations, plus tax evasion, particularly in Europe. Currently, McDonald’s is being investigated in Europe for allegedly evading payment of 1 billion euros in taxes.

“McDonald’s is a global player, and people all over the world should know it is an unfair player that should face global pressure to pay its taxes and decent wages,” said Jutta Steinruck, a member of the European Parliament who also attended the Senate hearing in Brasília.

[Research: Reuters news agency]

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