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tv   Inside Story  Al Jazeera  July 31, 2014 5:00pm-5:31pm EDT

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one of them tweeted "from now on we'll respond to any statement from the deputy prime minister by laughing. and posted a selfie of herself with six other women here". silly, silly men. "inside story" is next. as with many favt food restaurants, when you work in most american mcdonald's, you are in a business owned by a franchise holder. the national relation board issued a decision that could shake up the rules of game. it's "inside story". hello, i'm ray suarez.
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in the last few years fast food restaurant workers made loud public demands for better working conditions and pay. when you train, learn the system, prepare the specified food and run the register in a mcdonald's, who are you working for? the illinois head quartered giant says not us, we franchise. the national relations board general council ruled on the question and decided it's not an arm's length relationship in mickey d's case. it may have an impact on the corporations, franchise holers and the millions that work for them. >> reporter: the golden arches will take on more responsibility for the employees that fall under its umbrella brand. tuesday the national labour relations board ruled that mcdonald's corporation could be considered a joint employer for
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workers in its franchise operations. the ruling has broad implications for mcdonald's and other franchisers as low-paid workers seek higher pay and the right to organise. 90% of u.s. based mcdonald's restaurants are franchises. typically the parent company leases the brand to independently run shops. the individual shops are responsible for the employees. this differs from the model where the parent company opens all the stores, and employees are subject to the same rules. but the new nlrb ruling on mcdonald's says the company shares responsibility for franchise operations. >> what do we want? [ chanting ] >> for the last two years fast food workers staged periodic strikes from new york. >> we are trying to get fair winter games. new york city is not a cheep place to live.
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>> reporter: to los angeles. >> we'll make a difference. >> reporter: since the protests began, workers filed 181 complaints alleging workers were fired or penalized for prolabour rallies. the nlrb ruled 43 complaints have merit. 68 have been dismissed and 64 are under investigation. for its part the company promised to contest the nlrb decision. in a statement published on their website a top human resources said: . >> the n step in this process -- next step in this process
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involves hearings before administrative law judges. when the main corporation brings a franchise holder into the family, does he or she become a partner, an employee or take on the risk of an independent business person? is it the nature of being a franchise holder that tells the tale or in the specific case of mcdonald's, how headquarters relate to tells the tale. what does it mean for the workers? a general counsel joins u, and elizabeth carlson, sa partner in a law firm, specializing in employment war, and joseph mccartin is the director of george town universities initiative on labour and the working poor. >> isn't it the - the pattern,
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isn't it a widespread practice to turn workers into some kind of subcontractors. not just in places like mcdonald's, but if we go into office buildings, and talk to the cleaners, they don't work for the lapped lords, they -- landlords, they work for someone else, a dispersal of authority and lines of demand throughout the workforce. >> it's common and takes a number of different forms. there's subcontracting, in the case of jan torial companies. they don't work directly for the buildings they clean, they work for subcontractors. franchise operations. various types of fissuring, distancing, fracturing of the employment relationship. the concept of joint employment, which is at issue in the mcdonald's case is an old concept that you can have more than an entity. even entities that are at arm's leptionz, who -- length, who share or codetermine wages and
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working conditions are employers of same group of employees is an old concept. the doctrine plied in this case is well-established. >> election, mcdonald's says yes, if anything is well it's the practice of franchising, and knows people don't work for us. are they right? >> under the counter board precedent that has been law for the last 30 years there's a concept that the board recognised as a precedent. there has to be direct control over things like hiring, firing and other terms and conditions of employment. mcdonald's position would by, believe at this point. that they don't have that direct control. they provide certainly food guidelines, and quality assurance guidelines and record to that. they provide guidelines about how the restaurants themselves need to physically look and give
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some business general guidelines. they don't have a role in hiring and firing. it would be their position under the current law that they are not joint employees. >> elizabeth carlson, why you describe correctly the structure of the relationship, is mcdonald's sort of unusual when it comes to franchisors - sweating the details, you might say. more than a lot of brands do. they micromanage down to the flecks of envelope that you get at the count are. >> part of the franchise model and what makes it effective is the larger corporate entity takes care of things like brand management and name recognition while the individual franchisee is dealing with things like employment matters. and part of, for mcdonald's, the brand recognition is things like ensuring the food quality is
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consistent across the franchise locations, making sure that customer service is equal at the locks, because an individual customer doesn't recognise the distinction between mcdonald's, the corporate entity and an individual franchisee. simply because they are ensuring the quality consistency and keeping the brand which they are marketing on behalf of all the company owned and franchise organization, doesn't create the employment relationship required under the current task for joint employer status. >> why does it matter whether you work for this illinois based giant mcdonald's, or a family that lives in your town and operates three restaurants? >> i think this is an important dispute. first of all, because of what has happened to change the nature of the employer, employee relationship in the past half century. franchising exploded in the last
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50 years. what has happened in the case of a franchise like mcdonald's, is that it matters not at all whether you are working for a giant corporation or the small franchise when it comes to labour policies. mcdonald's provide guidelines on all things rarlding employee -- regarding employee training. they do not take responsibility for the pay that their workers get. here you have a situation where the grand is accruing value. it's accruing value in part because of the labour of human being, providing service. they enhance the value of the brand. but the brand is saying we owe you nothing. that is an important art to settle. >> we have in juxtaposition between a company that takes a tremendous and profound interest in the details.
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>> yes. >> and yet wants to, as a matter of law, distance itself from direct supervision of those employees. why? >> well, i think to save money. to improve profits, and partly what we have seen in the past half century or more is what mr becker refers to as the fissuring of the american workplace, this is the title of a recent book by the director. wage and hour subdivision of the labour department. what he's documented is the extent to which employers used all kind of methods in the past 50 years to distance them from responsibility for, you know, the welfare and the pay of the workers making the product or service, in many cases, outsourcing, offshoring, subcontracting. temporary workers. and many work places today, we have temporary workers working side by side with other people,
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earning less, and doing the same job as someone in that workplace. but they are actually being categorized as an employee. temporary agency. all of these strategies were pursued to improve productivity and profits for the employer. workers have not seen much gain coming from all of this. >> elizabeth, it's estimated to employ about 10% of the workforce we see at the restaurants around the country. why is that an advantage to them. why would they prefer to do business that way? >> why would they prefer to do business using the franchise model are prefer to do business having some indirect employees? >> indirect employment? >> the indirect employment - i think that really one of the reasons for the franchisors to give opportunities to small ms ownems
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ms -- business owners to own their own businesses. mcdonald's gets profit from that otherwise they wouldn't undertake it. it gives mcdonald's, and the franchisee an ability to have, if you will, a division of labour, where the corporate entity is taking care of tasks like brand management and marketing. name recognition, and the individual owner of a business, employing the individuals takes care of the day to day operations of a business. it's a model with economic advantages for mondays r, and economic -- mondays r, and -- mcdonald's, and economic advantages for entrepreneurs and those pass on an opportunity for employment opportunities. >> mcdonald's builds websites, a conduit for people that want to apply for jobs with the franchise holders, requiring the franchise holders to use software that monitors worker
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productivity and hours to keep close tabs on these people that it doesn't employ. in your view, is the company trying to have it both ways? >> i think you are asking a question about what the evidence is, and we don't know all the evidence yet. clearly we know some of the evidence which is that mcdonald's wants to protect its brand. that is not only a question of what the restaurant looks like and the product looks like, but the service that is it delivered through the workers. we know that mcdonald's mandates what the workers wear. it mandates, for example, what hours the restaurants are open. we know that through sophisticated information technology mcdonald's monitors performance by the workers. the evidence as it comes out at trial - my inspector is that it will be -- suspicion is that it will assessment the traditional test of sharing or codetermining shares and conditions of employment will be met.
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you ask the roofer to put on a roof, and you don't care what his or her workers wear or what hours they work, just that they put a good roof on the house. much of that is detail by mcdonald's here, and that's sharing or codetermining conditions, and that's being a joint employee. even if you don't control everything, you control much of the workers conditions. >> we'll take a short break. when we come back we'll talk about wages and work conditions. maybe in your town you saw the one-day strikes that fast food workers have thrown around the country. will the nlrb ruling an appeal to a law judge that's coming, make a difference in the workers attempts to get organised? this is "inside story." stay with us.
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you're watching "inside story." i'm ray suarez. when you become a mcdonald's restaurant operator, you don't go on your merry way making local decisions on how to run the outlet. the hamburger giant makes a lot of decisions that matters. the national relations board found in a ruling. that's the focus on the programme. elizabeth carlson, this has been trumpeted in a lot of news reports on this general counsel decision, that it sort of lifts a lid on the possibilities for
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organising, for campaigning around work conditions and wages, why would to do that? is it somehow now mechanically easier to run for instance, organising campaigns when mcdonald's is your coe employer, not -- co-employer, not just jenkins' family enterprises in america? >> as you indicated and as we talked about, this is a little bit premature at this point. the general counsel has made this determination that mcdonald's is a joint employer. as we talked about this rose will go through the administrative law judge hearing, it will go to the national labour relations board on to federal court and potentially the supreme court. and as mr becker indicated, at all of those steps it will be a factual analysis, and also an application of the standard or potentially a change in the standard that the board uses to
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determine the joint employer status. if, at the end of the day it's determined that mcdonald's, as a franchisor is, in fact, a joint employer with the individual entities, it will have a major impact on organising efforts. there'll be an organising of joint employers. there'll have to be an analysis as to whether or not there's community of interest between the employees who are at all mcdonald's, or what the various collective bargaining units would be, and an impact on the effort of organising. >> does that, in that moment, that this ruling stands, let's say, a mcdonald's worker in el paso, one in chicago, and another in san francisco, suddenly they are part of the same thing in organising terms? >> potentially there could be an argument that there's a community of interest wide enough that all of those
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individual emlows are within one -- employees are within one same bargaining unit. if there's a decision indicating that mondays rrk, the corporate -- mcdonald's, the corporate entity controls the individuals, it could be that they are one bargaining unit or they are joint employers, and that means in order to organise at the bargaining table, if there were a successful campaign that the local entity and the union representation and mcdonald's u.s.a. have to all be at the table during bargaining. >> as a practical matter. if you are a worker in an enterprise owning three or four restaurants, do you have a steeper uphill climb than you would in a national brand chain like this? >> i said so. workers power collectively comes from density within a company or sector. the more workers come together
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under a particular employer, the more leverage they can have. in a dispersed industry like the fast food industry, it's difficult for workers to exercise collective power. i think that's partly why wages are so low in the industry. employers don't have to respond to pressure from below. one thing should be added, that many viewers may not realise, that the workers that do the jobs are supported by tax payer money, earning income tax credit. some qualify for that. in fact, these low wage workers find it difficult to have collective power that they can exercise, but taxpayers subsidise an industry that pays low wages. it's a deep problem. >> craig becker, couldn't
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mcdonald's, as a corporate entity be the muscle behind an anti-organising effort - whether it's considered a joint employer or not a joint employer, just in its own interest. hire the pr firms, do leafletting of the employees, put an extra slip in their bi-weekly envelope saying "here is why we think it's a bad idea", all of that stuff? >> of course. that's what many employees in this country choose to do when faced with an organising drive. what is important, what is at issue is app allegation that -- an allegation that workers rites were violated. they protested against conditions - low wages - and there was retaliation. that's the allegation. >> is that against the law? >> that is against the law. if workers collectively protest, whether they are members of a union or wish to be, if they do so collectively, that's protected. the allegation is there were various forms of retaliation in
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the restaurants. the principal, i think, is who should bear responsibility, mcdonald's is concerned about food safety, it should be concerned about workers safety, and that their rights are violated. the public should know that. what is hopeful about the decision in respect to workers is that their right are more likely to be protected. if an entity that has to be concerned about the public's reaction to the violation of rights is responsible, mcdonald's would be concerned about the fact that workers will be retaliated against the restaurants. >> that widens the conversation. >> we'll take a short break, when we come back we'll talk about brand value, public relations, public image, and how that may press on the story nationwide. this is "inside story", stay with us. ♪
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welcome back to "inside story." on al jazeera america. i'm ray suarez. the national labour relations board ruling on whether mcdonald's is an employer to hundreds of thousands that work in its restaurants is not the end of the story. the decision will be next reviewed by an administrative law judge. what could a decision mean for the giant corporation and other franchise businesses. still with us, craig becker, general counsel for the aiclo and former national relations board member, elizabeth carlson, part mer in a law firm, specialising in employment law, and joseph mccartney, professor on labour and the working poor. elizabeth, you are not of counsel to mcdonald's, so you are not directly involved or working for them. >> no. >> and it's important to note that. are there times where is company that operates out in public, gemeding on good -- depending on
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goodwill, may be best advised to do everything it can, and look at its public image and brand value when making did i says on how to treat the workers. >> sure. all employees - certainly for purposes of public perception think about the conditions of their workforce, and for purposes of productivity, and having a harmonious workforce, avoiding other claims from employees that may or may not have merit. if employers are treating employees consistently, they are less susceptible to organising campaigns from unions. and also, as i said, they are getting a better more instructive workforce. it is part of the balance that employers undertake when evaluating terms and conditions. there are other factors as well. >> craig becker, as employees in
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a high touch publicly visible business, are they different in the way the public sees them, are they different in the way mcdonald's has to see them. whether they are a direct employer or not. as we move ahead to raise wages and public awareness. does any corporation in this kind of situation have to be careful in a way that ones that employ hidden workers. and it may not have to. >> i think corporations should be and are, many are. in the garment industry, where you have brands that produce garments all over the world. there's a sensitivity to the - or tragedies in bank , and the average person in mcdonald's, sees a worker and identifies them with mcdonald's, not the individual opener of the restaurant. if the workers rights are
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violated the public, whatever the legal standard is, attributes it to mcdonald's. if they are underpaid the public feels edmonton is responsible. i think the brands should be concerned about the violation of workers rights, whatever the legal standard is. >> this is a nationwide businesses. does it have a spill over effect to the wendies, to k f.c.s and other businesses in the same sector that also are paying workers roughly national average, about 8,500 an hour. >> it could have a spill over effect. now, as the two lawyers on the panel point out, it comes down to facts in this case, as to whether mcdonald's was a joint employer, and each of those franchises you mentioned may have different practices, and may be evaluated differently, according to the facts. but what is significant about this case is that the general counsel has asked for a very
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careful look at this status of possible joint employer for mcdonald's. if it can be found and sustained in this case, i think then very likely it could spread to other. >> joseph, craig becker, elizabeth carlson, thank you all for being with us. that bricngs us to the end of "inside story". thank you for being was. in washington, i'm ray suarez.
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>> nogales, arizona. a bus has arrived filled with people being deported from the united states. >> right now we're headed to san juan bosco, a shelter here in nogales where the mexican immigration authorities have picked the people who were just deported, they take them there so they have a place to stay on their first night back in mexico. >> many thought 2013 would be the year when congress finally passed comprehen


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