McLibel Verdict

Justice Bell's Verdict
19th June 1997

Chief Justice Bell's 800 page judgement was handed down on Thursday 19th June 1997 after his presentation of the Summary - the whole judgement is presented here for your enjoyment.

10. Employment practices.

The last part of the leaflet, of those parts which the Plaintiffs allege to be defamatory, relates to their employment practices.
The words complained of start with a headline, "What's it like working for McDonald's?"
After the headline, the text complained of reads as follows:
"There must be a serious problem: even though 80% of McDonald's workers are part-time, the annual staff turnover is 60% (in the USA it's 300%). It's not unusual for their restaurant-workers to quit after four or five weeks. The reasons are not hard to find.
NO UNIONS ALLOWED
Workers in catering do badly in terms of pay and conditions. They are at work in the evenings and at weekends, doing long shifts in hot, smelly, noisy environments. Wages are low and chances of promotion minimal.
To improve this through Trade Union negotiation is very difficult: there is no union specifically for these workers, and the ones they could join show little interest in the problem of part-timers (mostly women). A recent survey of workers in burger-restaurants found that 80% said they needed union help over pay and conditions. Another difficulty is that the 'kitchen trade' has a high proportion of workers from ethnic minority groups who, with little chance of getting work elsewhere, are wary of being sacked - as many have been - for attempting union organisation.
McDonald's have a policy of preventing unionisation by getting rid of pro-union workers. So far this has succeeded everywhere in the world except Sweden, and in Dublin after a long struggle.
TRAINED TO SWEAT
It's obvious that all large chain-stores and junk-food giants depend for their fat profits on the labour of young people. McDonald's is no exception: three-quarters of its workers are under 21. The production-line system deskills the work itself: anybody can grill a hamburger, and cleaning toilets or smiling at customers needs no training. So there is no need to employ chefs or qualified staff - just anybody prepared to work for low wages.

As there is no legally-enforced minimum wage in Britain, McDonald's can pay what they like, helping to depress wage levels in the catering trade still further. They say they are providing jobs for school-leavers and take them on regardless of sex or race. The truth is McDonald's are only interested in recruiting cheap labour - which always means that disadvantaged groups, women and black people especially, are even more exploited by industry than they are already."
The Plaintiffs pleaded that the words which I have quoted from the leaflet, "in their natural and ordinary meaning, meant and were understood to mean that the Plaintiffs and each of them

[N] Pay bad wages and provide bad working conditions, taking advantage of the absence of the existence of any specific union for their workers and adopting a policy of preventing unionisation by getting rid of pro-union workers.
[O] Have taken advantage of the absence of the minimum wage in Britain to pay what they like, helping thereby to depress wages in the catering trades.
[P] Are only interested in recruiting cheap labour, and to this end exploit disadvantaged groups, women and black people especially."
The leaflet says that McDonald's workers do badly in terms of pay and conditions. It is true that it refers to "workers in catering" rather than McDonald's workers specifically, but this section of the leaflet is directed at McDonald's as the headline makes clear from the start. Again I believe that the ordinary, reasonable reader would take McDonald's to include whoever is responsible for running McDonald's restaurants around the world (the First Plaintiff) and in this country where publication is complained of (the Second Plaintiff). To my eye and ear the text somewhat moderates the description of workers doing "badly" in terms of pay by immediately going on to describe wages as "low".
Although the text carries the message that the Plaintiffs take advantage of the absence of any specific union for their workers, I doubt that this is defamatory and it adds nothing to the general sting of low pay for bad working conditions.
The leaflet expressly says that McDonald's have a policy of preventing unionisation by getting rid of pro-union workers.
The leaflet says that McDonald's have helped to depress wages in the catering trade still further in Britain. Although it refers to British wages which are paid by the Second Plaintiff and not the First Plaintiff in fact, I believe that the ordinary, reasonable reader would take the charge to refer to whoever was running McDonald's throughout the world, including Britain, as well as the British operator.
Although the text carries the message that the Plaintiffs take advantage of the absence of a legally-enforced minimum wage in Britain, I doubt that this is defamatory and it adds nothing to the charge of further depressing wage levels.
The leaflet says that McDonald's are only interested in recruiting cheap labour, which means that disadvantaged groups, women and black people especially, are exploited.
The Plaintiffs' meaning [P] carries, for me, the sting that the Plaintiffs target disadvantaged people, women and black people especially, because they are only interested in cheap labour. In my view the leaflet does not go that far, but it juxtaposes being only interested in cheap labour with the further exploitation of disadvantaged groups, women and black people especially, and it clearly means that as a result of the Plaintiffs being interested only in cheap labour, rather than the provision of jobs for school leavers and equal opportunity regardless of sex and race, as they pretend, they end up exploiting those who are at a disadvantage on the job market, women and black people especially, even more.
There was some debate as to whether one could "exploit" workers, in the sense of making use of them or benefitting from them, without behaving badly. In my judgment the exploitation alleged in this part of the leaflet is culpable because its object is disadvantaged people.
The leaflet does not accuse the Plaintiffs of discriminating against women or black people on the grounds of sex or race, and the Plaintiffs' pleaded meanings do not allege that it does make that accusation, although there were times during the hearing when all the parties appeared to believe that it did.
Of course, if the truth was that women and black people were targetted as cheap labour or discriminated against by the Plaintiffs, it would help to show that the allegations of exploitation and bad conditions generally were true.
In my judgment this part of the leaflet bears the meaning that the First and Second Plaintiffs pay their workers low wages and provide bad working conditions, helping to depress wages for workers in the catering trade in Britain; that they are only interested in recruiting cheap labour and exploit disadvantaged groups, women and black people especially, as a result; and that they have a policy of preventing unionisation by getting rid of pro-union workers.
This meaning falls within the meanings pleaded by the Plaintiffs, taken together, and in my judgment it is defamatory of them; damaging to their trading reputations, tending to lower them in the estimation of right thinking members of society generally, making people reluctant to deal with them and, particularly, tending to impede the recruitment of suitable staff.
In my judgment, it is defamatory of a commercial, trading company to say that it pays its workers low wages. It is more defamatory to say that it is only interested in recruiting cheap labour and that it exploits disadvantaged groups, women and black people as a result. It is also and separately defamatory to say that it provides bad working conditions, but the real, general sting of this part of the leaflet is the combination of low pay and bad working conditions: low pay for bad conditions.
The allegation that the Plaintiffs have a policy of preventing unionisation by getting rid of pro-union workers is not just part of the general sting, it is a specific defamatory charge of its own.
On balance I do not believe it to be defamatory of a corporation to say simply that it is "anti-union" which is what the Defendants were determined to prove to be true of each of the Plaintiffs. But it is clearly defamatory to say that the Plaintiffs have a policy of sacking employees who have union sympathies. In my view such a policy, were it to exist, would be likely to affect the Plaintiffs adversely in the estimation of reasonable people generally because it is generally and rightly accepted that, save perhaps in exceptional circumstances which do not exist here, any employee should be allowed to join and promote a union without fearing for his job provided, at least, that his union activities do not cut into his working time.
Although saying that workers do "badly" in terms of pay and conditions or that wages are "low" might appear to be expressions of opinion or comments in many contexts, I judge the defamatory statements in this part of the leaflet, or "factsheet", as the Defendants called it, to be statements of alleged facts. Apart from the introductory statements to the leaflet as a whole, this section of the leaflet begins with the headline question "What's it like working for McDonald's?" Clearly what is to follow are the facts, or alleged facts, about working for McDonald's. Although the first words of the text -"There must be a serious problem" - are opinion or comment, I see everything which follows as categoric statements of fact.
It follows that if the Defendants are to defend the defamatory charges successfully, they must justify them by showing them to be true in substance and in fact.
The evidence relating to the Plaintiffs' employment practices took nearly one hundred court days spread over nearly eleven months. There were four main reasons for this.
Firstly, the general nature of the charges of bad working conditions for bad pay, and exploitation, led to evidence covering a wide variety of employment practices within the McDonald's system.
Secondly, the Defendants' attempts to justify the allegations made in the leaflet depended largely upon the evidence of witnesses who had worked in a number of McDonald's restaurants, mostly in England but in some other countries as well. The Defendants faced the argument on behalf of the Plaintiffs that there are hundreds of McDonald's restaurants in this country, and thousands around the world, so that even if the evidence of malpractices in some stores was reliable, they should be seen as aberrations due to inevitable but occasional human failure to follow the systems and policies of the Plaintiffs, and the training provided by the Plaintiffs, rather than failures inherent in the system itself. So the Defendants wished to call as many witnesses as they could about as many restaurants as they could.
Thirdly, the Plaintiffs were understandably reluctant to rely solely on the argument that there are always lapses from proper practice in any large organisation, however well run. So where they had witnesses to contradict the evidence of the Defendants' witnesses, by and large they called them. Once it was clear that there was a real conflict of evidence about what had happened in a particular store, neither side was prepared to restrict its available evidence on the point significantly, and I did not feel inclined to impose restrictions in a well-publicised case where the reputations of individual managers and crew were under attack and where any significant restriction of the numbers of witnesses to be called on either side might lead to false conclusions on my part.
Finally, the Plaintiffs called senior executives of the First Plaintiff, McDonald's Corporation, about practices in the USA and other countries as well as executives and senior managers employed by the Second Plaintiff in this country, to speak of proper procedures and to refute numerous allegations pleaded by the Defendants, whether the Defendants appeared to have actual, admissible evidence of the allegations or not. Before the trial started, the Court of Appeal ruled that the Defendants could plead particulars of justification of which they had no clear and sufficient evidence at that interlocutory stage, provided that they believed the words complained of to be true, and they intended to support the defence of justification at trial, and they had reasonable grounds for supposing that sufficient evidence to prove the allegations would be available at trial, not necessarily from their own documents or witnesses, but to be elicited, for instance, from the Plaintiffs' witnesses in the course of cross-examination or in the form of documents disclosed by the Plaintiffs on discovery. The Defendants made the greatest possible use of their opportunity to cross-examine the Plaintiffs' witnesses in search of evidence which they lacked from their own witnesses, and of their opportunity to question the Plaintiffs' witnesses to see if relevant but undisclosed documents existed. This applied in all those areas of the case where the Defendants had information as yet unsupported by admissible evidence, but it applied particularly to the investigation of the Plaintiffs' employment practices.
From the mass of evidence I propose to refer to the matters which I found most illuminating of the Plaintiffs' employment practices, or which the Defendants appeared to me to rely upon most and I will do that under five broad heads; matters of background and of general relevance, pay and matters related to pay, working conditions apart from pay and apart from union representation, the Plaintiffs' attitudes to unionisation and to employees who have favoured unionisation, and finally their attitudes to the employment of women and black people.
I have already said that at the end of 1990 there were about 11,800 McDonald's restaurants in a total of 53 countries. About 8,600 of them were in the USA. About 6,800 of the US restaurants were owned and run by franchisees. By the end of 1995 there were about 18,400 restaurants in 89 countries. About 11,400 of them were in the USA; between about 8,200 and 9,200 of them franchised. I can not give the exact figure because I do not know how many satellite restaurants were franchised. At the end of 1990 there were about 380 McDonald's restaurants in Britain; about 650 by the end of 1995, and 674 in May,1996. Franchising has only been popular in the UK in the last few years as a result of a change in McDonald's policy here, and the proportion of franchised restaurants is much smaller than it is in the USA. In May,1996, 523 of the 674 UK restaurants were company owned and 151 were licensed to about 120 franchisees. The typical UK franchisee has only one or two restaurants, whereas some US franchisees have considerable strings of restaurants and are very large businesses in their own right. The First Plaintiff and its subsidiaries worldwide, including the Second Plaintiff in this country, have a degree of control and supervision of franchised restaurants, and the system of operation of all McDonald's restaurants is similar; but the employer of staff in franchised restaurants is the franchisee - man, woman or company - who arranges his own pay rates and terms and conditions of employment, so one might expect them to vary to some extent from restaurant to restaurant, particularly in the USA where the franchisees appear to be more independent. In fact Mr Nicholson who has been heavily involved in U.K. franchising since 1984 thought that there were no significant differences as far as pay and hours were concerned between the Second Plaintiff's own restaurants and the franchisees in the U.K. The company's Operations Manual has applied in both kinds of stores. I have no reason to doubt what he said, and if that is so I would expect other conditions of employment to be very similar in the U.K.
The position in other countries and in the U.S., where most McDonald's restaurants are run by franchisees, was less clear.
Mr Stan Stein, the First Plaintiff's Senior Vice President of Personal and Labour Relations with overall responsibility for personnel and labour relations in the U.S. and for providing a consulting service to all McDonald's personnel departments throughout the world, said that its Franchisee Crew handbook was "a model handbook, not a required thing" from which an owner operator could pick and choose pages and to which he could make additions, pertinent to his store. Mr Robert Beavers, a member of the First Plaintiff's Board of Directors, said that the Corporation's management and operating philosophies were "pretty much the same worldwide" for the most part, but subject to local laws and customs. That applied to employment conditions as it did to other business matters. The Corporation provided franchisees with "pretty broad parameters in which to operate". It gave initial training and, later, information, guidance and counselling, but franchisees had "a pretty broad, pretty big playing field in which to operate......We do not dictate to them what they should do with regard to employment, but we provide guidance and counsel and some pretty broad operating philosophy". Flexibility was important. On the other hand Mr Beavers went on to say that in the U.S. there tended to be no significant difference in employment conditions, pay and hours between the corporation's own restaurants and franchisees' restaurants which were visited and inspected by consultants employed by the Corporation to which the reputation of all "McDonald's" restaurants was important. Some countries were stronger than the U.S. in terms of what was expected of the franchisee or the national subsidiary or joint venture partner.
The size of restaurants varies considerably, but they normally have between about 50 and 100 people on their payrolls, scheduled to work according to the amount of trade which is anticipated.
Mr John Atherton, the Second Plaintiff's Head of Training said that by 1993 just over 30,000 people were employed by the company, not including franchisees' employees in this country. The number had increased over the years as the size of the operation had increased.
In June,1990, Mr Stan Stein, the First Plaintiff's Senior Vice President, Personnel and Labour Relations reported to a Congressional Sub committee that the First Plaintiff employed approximately 100,000 people: 4,200 corporate staff, 7,000 salaried Restaurant Managers and Assistants, and approximately 85,000 hourly paid crew employees. He estimated that franchisees in the U.S. employed approximately 400,000 people, of whom about 350,000 were paid on an hourly basis.
However, Mr James Marshall, the First Plaintiff's Staff Director of Insurance and Safety, estimated that by 1994 when there was a total of 9,744 McDonald's restaurants, 8,888 franchised and 1,556 the Corporation's own (McOpCo), there were just over a million employees in all of the restaurants, 168,000 of them in McOpCo restaurants.
The normal hierarchy within a McDonald's restaurant, working upwards, starts with ordinary crew members. Above them come Floor Managers ("Swing Managers" in the U.S.and Canada) who usually run a part of the restaurant when they are on duty. They may, however, run the whole restaurant for a shift as a Shift Running Floor Manager. Then come Trainee Managers, Second Assistant Managers, First Assistant Managers and Store Managers. Above the restaurant management are Area Supervisors who supervise three or four restaurants, and Senior Supervisors, later called Operations Managers, who are responsible for about twenty restaurants. Area Managers operate above these.
In restaurants owned by the Second Plaintiff all employees up to and including Floor Managers are paid by the hour, and everyone from Trainee or Assistant Manager upwards is salaried, with no extra pay for long hours if they occur.
Crew, Floor Managers and First or Second Assistant Managers may be part-time.
The great majority of hourly paid staff work part-time. Both Mr Stein and Mr Beavers said that in the U.S. 80% of McDonald's crew were part-time. Mr Nicholson said that it suited McDonald's in this country to have 80% working part-time. Mr Frank Stanton, Midlands Regional Manager, said that when he was restaurant manager in Leicester in the mid-1980s about 70% worked part-time. At Colchester it was 60% or 70%. But the proportion of part-timers might have increased by the time that he gave evidence in 1995. Ms Lyn Meade, a regional Human Resources Manager of the Second Plaintiff, produced figures which indicated that 75% or so of staff worked up to 25 hours a week.
Estimates of the average hours for part-time workers in this country varied. Mr Preston said that the average was 25 to 26 hours a week. Mr Nicholson said 20 hours. Ms Meade's figures showed 67% working up to 20 hours or less, 27% working between 20 and 39 hours, and 6% working more than 39 hours. (11% were recorded as working no hours but there was an explanation for this). However, it was clear from the general body of evidence that a significant number of staff worked only four to eight hours a week, perhaps just a Saturday or an evening shift. A small nucleus of core staff worked true full time hours of 35 to 39 hours a week.
Mr Stein said that the average number of hours worked by hourly paid employees in the U.S. was a fraction over 23.
Very broadly equal numbers of men and women are employed in McDonald's restaurants in the UK. In the U.S. about 58% of the First Plaintiff's own service workers are women. There was no reason to believe that franchisees employed significantly more or less women. The proportion of employees who are black was rather less clear, because Mr Stein's figures for ethnic minorities was the same as Mr Beaver's figure for ethnic minorities and women together. I did not have figures for black workers or workers from ethnic minorities in the U.K.
Staff in McDonald's restaurants, even the managers, tend to be young. According to Ms Meade, 62.4% of hourly paid U.K. employees were aged between 16 and 20 in 1990, and in 1994 the figure was 64%. As far as I could tell from the figure put before me, about 75% of U.K. hourly paid employees were under 21 at material times. Mr Beavers said that in the U.S. a little less than that percentage were under 21, but it was still a majority of hourly paid staff.
Mr Stein said that about 48% of hourly paid workers in the First Plaintiff's own U.S. restaurants were under 19.
The Second Plaintiff's Fact Book said that 9.31% of employees were over 30.
Many of the Plaintiff's witnesses, now in high positions, including Mr Beavers and Mr Preston, started working for McDonald's when they were students who wanted the opportunity to earn some money working part-time on more or less flexible scheduling. This also suits the McDonald's system of restaurant operation.
The McDonald's system is that numbers of staff on duty at any particular time of day in any particular restaurant should be carefully "scheduled" so that there are enough of them to provide quick service to the anticipated numbers of customers at any given time without more of them than necessary being there to be paid.
Mr Stein said that the attraction and skill of effective scheduling was to match up the individual employee's requirements with the requirements of the restaurant. The Defendants complained that close scheduling led to high pressure work throughout the whole of a shift, and to rushed overwork if scheduling was too tight or if scheduled workers did not turn up and could not be replaced.
Custom can vary enormously according to the day of the week and the time of day and the situation of the particular restaurant, but Saturday lunch times are universally and particularly busy.
There is a policy of careful and controlled budgeting of all costs, including labour, in McDonald's restaurants, and one of the big issues as the evidence unfolded was the extent to which, if at all, labour costs could be screwed down by requiring fewer staff to work harder and faster without loss of trade or loss of potential increase in trade because of loss of efficiency in serving customers.
As might be expected, there was much more evidence about working conditions in the U.K. than there was about other countries including the U.S. Obviously the Second Plaintiff is responsible for any general, low standards of working conditions in the U.K., but in so far as they stem from the universal nature of the McDonald's system the First Plaintiff must also be responsible for them, in my view.
The criticism of the First and Second Plaintiff's pay rates related to hourly paid workers rather than to management. This was understandable since the leaflet refers to "workers" in catering which clearly refers to those working at lower levels, in my view. I heard much more evidence about rates in the U.K. than elsewhere.
The system by which pay rates have been fixed by the Second Plaintiff has remained essentially the same. Each new employee starts work on a basic rate fixed in relation to the area in which he works, Inner London, Outer London or Provincial, with some minor upward variations designed to cope with local recruitment problems if they arise.
The new employee starts on this basic, starting rate for a three week probationary period, wearing a green badge.
After three weeks there is a Performance Review. If the "green badge" passes this test, he or she gets a yellow badge, and normally a pay rise of 5p, 10p or 15p per hour on top of the basic hourly rare, 10p probably being the most frequently awarded.
"Yellow badges" can collect up to five stars. Once they have all five stars they are qualified to become "training squad" with a white badge, judged competent to train new starters.
Beyond that the hourly paid worker can get his "shirt and tie" as a Floor Manager, coming out of crew uniform and going into a manager's uniform, but still hourly paid.
The scheme of pay reviews throughout the period with which I am concerned was that after the probationary period, crew should have Performance Reviews every two months with pay reviewed on every other Performance Review. So there was the prospect of a rise every four months. That was the system at the time of relevant publication of the leaflet.
The idea was and still is to relate pay to a crew member's performance to some real extent. The rises, if given, were again 5p, 10p or 15p. The evidence on the spread of awards varied, but the gist of it was that about 10% received no award, broadly 50 to 70% of people reviewed would receive a 5p increase, about 20% would receive 10p and between 5 and 20% would receive 15p.
Members of crew who have provided a particular service, for instance thinking of a new idea in the store's operation, are sometimes given a lump sum bonus. People who work particularly well may be given an impromptu rise in their hourly pay but this seemed to be rare.
Pay rates rise as a crew member moves up the promotion ladder because it is thought desirable to make sure that everyone on a higher rank should earn more than even the most senior person on the rank below. There was some evidence of Performance Reviews being delayed under pressure of other work or of them not being carried out at all on occasions. On some occasions when Performance Reviews were late, awards of pay increases were backdated to compensate.
There was criticism that too much depended on the reviewing manager's subjective judgment. However, I do not accept that risk of favouritism or the need to use subjective judgment invalidated the whole idea of pay increases for supposed performance, which was what Mr Morris appeared to suggest. When Mr Stanton was asked if pay increases went to "toadies" and "creepers" when he was a restaurant manager he said that such a course would mean that he would be left with all the toadies and everyone else would have left the restaurant. He thought that everyone responsible for Performance Reviews had a certain amount of integrity and responsibility. You would not have a restaurant "team" if everyone agreed with what the Restaurant Manager said. I accept that as good sense.
It is obvious that a manager carrying out pay reviews has to be able to face all hourly paid staff in his restaurant. No doubt crew get to know who has got what rise. Indeed some restaurants had "rise charts". If a manager is to have a happy, effective ship he must do his best to be seen to be acting fairly.
In any event there was little or no evidence of pay rises being awarded when they were undeserved and it was the Defendants' own case that the Second Plaintiff's inclination was to pay as little as possible and that the marks required to pass Observation Checklists (OCLs in the U.K., OCs in the U.S.) of the skills and knowledge required for the various tasks and duties were high.
On the other hand there was little or no satisfactory evidence of pay rises not being awarded when they should have been. Allegations to this effect are difficult to judge.
When students working for the Second Plaintiffs during holidays leave to go back to college or mothers leave at the end of a school term, they are usually removed from the payroll within a few weeks, so that if they return they are theoretically new starters who could be placed on the basic rate even though they have previously received rate enhancements in pay reviews. However, I heard evidence which I accept that ex-employees who returned after a break were often taken back at a rate which reflected any enhancement which they had previously received on top of the current basic rate, even if the basic rate had increased in the meantime. This would be especially likely to happen if the employee indicated when leaving that he or she was likely to be back.
I accept that this course was not only fair between employer and employee, it was sound commercial sense in that the Second Plaintiff was more likely to see the return of experienced, trained employees who could start the job straightaway. Mr Stanton said that it worked well in practice.
Mr Beavers gave evidence of the same practice in the U.S.
Until about June,1987, it was possible for a long standing employee who was on a rate which included pay review enhancements, to slip back nearer to the basic pay when that was raised from time to time. But thereafter crew received the rise in basic pay on top of their already enhanced pay, thus maintaining the differential.
Quite apart from performance related rises in a crew member's hourly rate, rates differed depending on the time of day. The regular rate ran from 7am until 7pm. Then there was an evening rate until midnight: then a premium rate through the night.
Premium rate was phased out from June,1991.
The Second Plaintiff has never paid "overtime" in the sense of "time and a quarter" or " time and a half" for hours worked over normal full-time of 39 hours a week, and the company initially sought to justify this by saying that it was company policy for people not to work more than 39 hours per week and that they rarely did so, and that it was reasonable not to pay overtime in the context of the company's particular system of frequent performance related pay reviews and different rates for uncongenial, late hours.
As the evidence unfolded and there was more disclosure of documentation from sample restaurants it became clear that a significant proportion of full-time workers worked more than 39 hours a week quite frequently, presumably when there were too few crew on the payroll. From various disclosed documents it looked as if about 5% of crew worked over 39 hours in any given week, which would mean about 25% of the full time workers.
So the second limb of the Second Plaintiff's case, that the company's system of frequent performance related pay reviews and a higher evening rate and, until June,1991, a night-time premium rate compensated for lack of overtime pay, came more to the fore.
In my view lack of overtime rates did harm the earning prospects of the Second Plaintiff's crew, compared with the generality of other comparable employers who - it appeared to be accepted - did pay overtime. Not following the general course of paying overtime pegged back with one hand to some extent what had been given by another in the form of evening and premium rates.
At one time Wages Councils set minimum wage rates under a statutory scheme which governed the Second Plaintiff's wage rates.
In 1986 the obligation to pay not less than the minimum rates fixed in considerable detail by Wages Councils was abolished in respect of employees under 21 but the Second Plaintiff paid those who were 18 and over the statutory minimum for twenty one year olds.
In 1993 Wages Councils and minimum wages were abolished altogether.
There has always been a Federal minimum wage and a higher one in some States, in the U.S.
There was a fierce argument as to whether it was illegal not to pay special overtime rates in the years when Wages Councils laid down minimum basic hourly rates and minimum overtime to be paid on top.
The Defendants argued that the Second Plaintiff was bound to pay the statutory higher rate for overtime. The Second Plaintiff argued that provided that the weekly wage of all their individual employees who had mostly received some pay increase above the basic rate and received some evening or premium pay if they were full-time, came above the minimum weekly wage, calculated by following the Wages Council Orders on minimum rates and overtime, there was no illegality. They called some evidence that the Wages Council Inspectorate accepted this. I do not have to decide whether the Second Plaintiff's approach was strictly legal or not. I am quite sure that it was wrong because it meant that there was always a risk that a full-time worker who was still on the basic wage or close to it, who did not work any or many premium hours but worked well over 39 hours a week, would end up with less than the Wages Council rates provided for. Yet there was no check in the Second Plaintiff's systems to ensure that the weekly pay was not less than the Wages Council minimum.
This in fact happened on occasions in the case of Mr Siamak Alimi who worked at the Colchester restaurant in the early to mid 1980s. His payslips showed that over the two weekly pay periods used by the Second Plaintiff he had on occasions received less than the statutory minimum for the hours which he had worked, including overtime. Yet he did not realise that until some sums were done for the purpose of the trial. I have no reason to believe that management at Colchester realised that there was a shortfall and I reject Mr Morris's contention that the Second Plaintiff adopted two-weekly pay periods to cover up shortfalls, but the fact is that the Second Plaintiffs "no overtime" approach involved a risk of underpay which led to underpay on occasions. I do not accept the Second Plaintiff's contention that following the Wages Council system involved unnecessarily complicated calculations of pay. Systems could easily have been set up to cope with that.
At all material times the First Plaintiff was obliged by U.S. law to pay overtime, although that had not always been so, and it did so. Mr Beavers, the highest ranking of the McDonald's executive witnesses on either side of the Atlantic, said that in his personal opinion it was a fair law.
Having said all this, the factors of performance related enhancements of the basic rates on the one hand, and lack of overtime for the 25% or thereabouts of full-time workers are all matters to be taken into account when judging whether the Second Plaintiff's rates of pay were low.
The Second Plaintiff's employees are not allowed to accept tips from customers. It is gross misconduct to do so. The theory is sound. Customers should know what they will pay for their food and drink without feeling any obligation to add a tip. It means that crew lose the possibility which those serving in other restaurants might have, of supplementing their formal pay with tips. But many people with jobs which can fairly be compared for pay, assistants in shops or supermarkets for instance, do not get tips either.
McDonald's crew starting rates in this country have always been the statutory minimum or close to it, when there was such a minimum.
I was given a schedule of figures of starting rates in Inner London, Outer London and Provincial areas for regular, evening and premium hours from 1983 to 1992.
As from June,1986, the provincial regular starting rate was �1.99 per hour rising to �2.22 for Inner London. Crew who were under eighteen years of age got less.
From June,1988, the provincial regular rate was �2.20 per hour rising to �2.43 for Inner London. From June,1990, the equivalent figures were �2.60 and �3 and from June,1992, �3 and �3.30.
The main plank of the Second Plaintiff's defence of its rates of pay was that they were "competitive", taking into account the prospects of pay reviews and enhancements, evening and premium rates. Mr Preston would not accept that the wages paid by the Second Plaintiff were low. He defended them by saying that "a business has to survive on the High Street. It is in competition with other businesses for staff. If it does not pay a competitive wage, it does not stay there. If it overpays, sooner or later it goes broke, and there is no business to employ anyone in the first place. So we have a kind of Catch 22 ...... You therefore follow the market place. It is just sense". He said that if you wanted good people you had to pay a fair wage. The Second Plaintiff's wages were totally comparable with everything else available on the High Street or in industry for the ability and availability of the people in question.
Mr Nicholson said that the company did not negotiate with anyone about pay. It responded to the market.
Ms Meade said that the Second Plaintiff "took the question of pay seriously because in order to initially recruit and also to retain employees, we need to make sure that we are paying them along with the market rate and so on".
Mr Beavers said that McDonald's in the U.S. was competitive with overall working conditions including pay in the same kind of industry. Its pay was "probably generally better".
There was material upon which I could compare the Second Plaintiffs' starting rates with other employers' rates for equivalent work in the U.K., but not really in the U.S.
Ms Meade produced various helpful schedules of average pay rates from the New Earnings Survey dated April,1987, which might however have related to the year ending April,1986. Each year the Second Plaintiff made a comparison with others seeking the same labour force, in order to fix its national basic starting rates.
Ms Meade's figures showed that the average hourly rate for full time males in hotel and catering and in retail was �3.08 and �3.07 respectively, although women were paid only �2.36 and �2.29. So women generally were paid a little more than they were to start at McDonald's in this country but men were paid significantly more. The average for chefs/cooks was more again. Bar men got paid more than McDonald's starters. Women in bars got paid much the same as McDonald's starters.
An extract from the N.E.S. produced by Mr Morris showed that the average for full-time males in all manual occupations was just over �4 per hour, well in excess of McDonald's starting wage.
An External Survey of Hourly Rates compiled by members of the Second Plaintiff's Human Resources Department and sampling General Sales Assistants ("equivalent to our crew level employee") employed by well-known High Street retailers and supermarkets, which must have been done in 1991 and 1992 because it quoted McDonald's starting rates at those times, showed minimum rates which were about the same as McDonald's starting rates, but lower median and upper quartile and maximum rates were generally well in excess of McDonald's starting rates. Of course this compares all rates, starters and others, elsewhere, with starting rates at McDonald's.
However, a Survey of Catering Wages by "The Catering Review Group" consisting of the Second Plaintiff and eleven competitors and other providers of quick service or relatively informal food, set out their starting wages.
The U.K. average starting rate was �3.18 compared with McDonald's �3 which is a June,1992, figure.
The Outer London and South East Average was �3.40 compared with McDonald's Outer London �3.05 which was the figure for June,1991 and 1992.
The Inner London average was �3.51 compared with McDonald's �3.30 which was the figure for June,1991 and 1992.
The 1986/1987 N.E.S. and the 1991/1992 surveys to which I have just referred, bracket the period of relevant publication of the leaflet.
My conclusion is that in the U.K., McDonald's hourly starting rates were significantly below the average general rates for similar retail and catering work over the period with which I am concerned, and rather below the starting rates for similar employers in catering work. There was a reasonable opportunity for the McDonald's crew member to catch up by reason of regular but small pay increases if, but only if, he or she stayed for at least several months and got a number of good pay reviews.
Retail and catering pay was significantly below average manual rates and I cannot see a full-time male crew member catching up with the average for full time manual workers in all industries, without significant promotion.

Such evidence as I did have on the average rates of McDonald's crew, as opposed to starting rates, did not challenge this conclusion. Mr Nicholson said that figures on average rates were available but he did not have them available.
In May,1996, Mr Preston said that the average hourly rate for all crew was about �3.80 per hour at a time when the Outer London starting rate was about �3.15, but I do not know where his figures came from. The difference between starting rate and average rate tended to be smaller at restaurants which had been opened recently, and many of McDonald's restaurants in this country are relatively new.
Mr Mark Davis, who had risen through various store management and supervisory positions to be an Operations Manager said that the proportion of crew on the starting rate varied. Just before the summer months, when a lot of staff would have been hired the proportion would be the highest, but one third would be the absolute maximum.
Mr Preston said that the Second Plaintiff offered prospects of promotion, with increased earnings, which other employers did not give, but I was unconvinced by this. I had no evidence about promotion prospects in comparable work and it was clear that a large proportion of McDonald's crew were not interested in promotion. Indeed this point helps the Plaintiffs when one comes to the criticism of promotion prospects made by the leaflet.
Various Crew Payroll Summaries which were produced on other issues gave me a keyhole view of what people took home. For instance a Crew Payroll Summary for the Shirley restaurant in February,1992, suggests that a typical crew member working about 39 hours a week would take home about �100 pounds a week provided that the hours included a significant number at evening and premium rate.
Ms Steel offered her own comparison by giving evidence which I accept that for the last year of the trial she had worked 12 hours a weekend from about 10 p.m. to 4. a.m. on two nights (she seemed to include travelling home) and took home �64 which is distinctly more than she would be taking home for 12 hours as a crew member at McDonald's at the end of a year. But she was working in a bar in Central London and she volunteered that she was paid more because of the unsocial hours.
Mr Beavers said that starting wages in the U.S. varied from state to state. There were Federal and State minimums. The starting wage was the minimum wage which Mr Beavers put at about $3.35 per hour in the middle of 1994. He said that the McDonald's starting wage was the minimum wage, but McDonald's was not a minimum wage employer. In a few months or less the wage would go up and the average wage of McDonald's restaurants throughout the U.S. was about $1 more than the minimum wage. The vast majority of crew were making about $4.35.
Mr Beavers said that a wage of $3 to $4 an hour was not low pay. It was a fair wage for the work expected.
Mr Stan Stein said that there had always been a Federal minimum wage which referred to large employers only. Some states adopted a higher State minimum for large businesses but had minimum rates which were lower than the Federal minimum for small businesses. He said that McDonald's basic U.S. starting rates were fixed by forty regions rather than by head office in Oakbrook. The regions did their own surveys of competitors for the same labour force to decide what the basic rate should be.
Mr Stein produced a table of the hourly rates of McDonald's own employees in the U.S. up to Swing Manager, which would mean all hourly paid restaurant crew. The figures ran from 1980 to 1993. On the 1st January, 1981, the Federal minimum wage was raised to $3.35 when the McDonald's average was $3.68. Up to March, 1990, the Federal minimum remained at $3.35 while the First Plaintiff's average rose to $4.84. On 1st April, 1990, the Federal minimum rose to $3.80. On the 1st January, 1991, the Federal minimum rose to $4.25. McDonald's average was then about $5.
The table was eventually agreed but there were limits on the help which it gave me. It set out average wages, so some McDonald's crew would be above and same below. It did not set out starting rates for comparison with the Federal minimum. It did show that the First Plaintiff was not a minimum wage employer in the sense of a large proportion of crew being paid the minimum wage.
Mr Stein said that McDonald's rates for hourly paid workers in the U.S. were not low. They were at the "higher end of the competitive scale".
There was not really any other evidence to enable me to compare McDonald's U.S. wages with its competitors' wages or with the wages paid for comparable work in other industries..
The U.S. periodic wage increases, if awarded, were 10c, 15c and 25c until 1992 when the higher two were raised to 20c and 30c. Mr Stein said that about 10% got the highest figure; the bulk got the middle one, and a smaller percentage got the minimum.
Mr Morris used those figures and the table to which I have referred to develop an argument that if a proportion of crew were training squad and swing managers or had enhancements the starter rate must be on or within a few cents of the Federal or State minimum, but Mr Stein disagreed and there was no sound basis upon which I could fault his denials of Mr Morris's suggestion.
The evidence that wage rates at specific U.S. restaurants were low was very sparse and limited to the occasional statement the the witness started at or near the minimum wage.
The Plaintiffs argued that in judging the wages paid by the Plaintiffs, benefits which came with the work should be taken into account. Mr Nicholson said that the Second Plaintiff's total package put them "way at the top of" the High Street league.
The most often mentioned of the benefits was training. Mr Preston said that McDonald's training was highly valued by other employers. It provided elements geared to basic work disciplines such as time-keeping, team work, health and hygiene goals and what he called "objectives setting" and "accomplishment review".
Mr Beavers said that work at McDonald's was a source of training and experience for a number of people, which was highly valued. There was a tug of war between Mr Morris trying to focus on the actual wage and Mr Beavers pushing the value of training. Despite his evidence about the competitive nature of McDonald's pay, Mr Beavers said that a number of industries had a higher starting rate but the work experience at McDonald's was highly valued in the industry and outside the industry.
However, the benefits and value of McDonald's training to which Mr Preston referred seemed to me to relate more to the fact of having held a job at all, which has been no mean achievement for many school leavers in recent years, rather than a particular benefit which McDonald's provided. Indeed Mr Preston said that at interviews for other jobs young people who had worked for McDonald's could say that they had some job experience.
Crew are allowed some free food, but it seemed to me that its value did not significantly alter the value of the hourly wages unlike, for instance people in live-in catering work who have a modest hourly rate but receive valuable board and lodging free.
Crew are given holiday pay which accrues in relation to the hours which they work.
There is a pension fund but this appeared to be for salaried staff only. Life insurance and medical care is available for both salaried and hourly staff.
A certain amount of money is available for books and educational purposes: �50 for anyone taking a recognised business course, and �250 for each restaurant to distribute. This was introduced because of recruitment problems but it applies throughout the country regardless of whether a recruitment problem exists.
Uniforms are provided.
The Plaintiffs contended that in judging whether McDonald's pay was low I should take account of prospects of promotion to more highly paid levels but, as I will say in due course, the statistical chance of significant promotion is very small and I do not see this as a material factor in the vast majority of crew members' pay.
While the Plaintiff's urged me to take account of the benefits of working for McDonald's the Defendants contended that various factors debased the value of crew wages.
There are no guaranteed hours work in any given week at McDonald's. On balance, in my view, the evidence showed that crew tended to get the hours which they wanted although there was evidence of some individual managers using their power to schedule down the hours of crew to whom they had taken a dislike, or even, it was suggested, down and out, in the sense that they were scheduled so few hours or at such inconvenient times that they left. I have no doubt that this happened on occasions, but I am unpersuaded that it was widespread. However, the fact remains that there was, and is, no provision in any crew member's very simple contract of employment that he or she is entitled to a certain number of hours work and therefore a certain amount of pay, each week or fortnight.
Moreover, a crew member cannot even be absolutely sure that he or she will be wanted for the whole of the scheduled shift for which he turns up.
It was clear from the evidence on both sides that if a restaurant turns out to be too quiet for the number of crew present, that is to say there is less custom than scheduled for, crew may be asked if they are prepared to go home early. If they do so they are not paid for the hours which they lose. They are paid only for the hours which they have worked.
The Defendants' case was that in these circumstances the crew member had no choice but to go home, and that if he did not agree, some excuse was thought of, to send him home anyway. The Plaintiffs contended that crew only went home early if they agreed when offered the opportunity to do so. I believe that the suggestion of leaving early probably was put as a request more often than as an order. But, in my judgment, this does not excuse the practice. The reality must be, and must be known by the Second Plaintiff to be, that many crew members, mostly young and more inclined to please than to obstruct their managers, will take the hint and go, losing money which they need as a result. This must be especially so when they know that they have no guaranteed hours for the future and that getting the hours they want depends on the goodwill of management towards them. I see no reason why they should not be asked if they would like to go home early, but in my view they should be paid for the lost hours which they have set aside to work for McDonald's if they do go home.
I will return to the topic of being asked to go home early when I come to work conditions generally, but so far as pay is concerned it means that pay which should be received, in my view, is lost.
There was some evidence that crew had their pay docked without knowing, that is that the manager reduced the recorded hours of work so that the employee was paid less than he should have been. But this was only convincingly shown to have happened in one restaurant to which I will come later. What happened was done because of pressure to keep labour costs down, but I do not consider that it was a foreseeable result of the Second Plaintiff's approach to labour costs, to which I will also come later.

At one time crew were paid for short breaks taken during their shifts, but in the mid-1980s this changed, with a slight, allegedly compensatory rise in hourly rate. I do not consider that this carries much weight one way or the other.
There was a considerable amount of evidence about the extent to which crew members were content or unhappy with their pay. Some of the Defendants' witnesses spoke of dissatisfaction. Some of the Plaintiffs' management witnesses said that there were little or no complaints at all about pay.
The Plaintiffs called a number of employees who were positively happy with their pay. By way of example only, Mr Christopher Cox, a very sensible young witness from the Bath restaurant, who had begun to move up towards salaried management, having started working part-time as a student, said that his pay was competitive, as good or better than that of his friends in similar jobs in the retail trade; but he accepted that a rate of pay could be "competitive" if rates of pay for comparable work were all very low.
Mr Kevin Perrett joined the Second Plaintiff in Bath in October,1987, as a crew member. He became a Breakfast Manager in 1990. He had left a previous employer because the wage was too low for him to live on, but I note that that was a charitable society. When he gave evidence in January,1996, he was working five days a week; 6.30 a.m. to 2.30 p.m. on four days and 6 a.m. to 3 p.m. on Saturdays. This came to 37.25 hours a week. He worked hard. He liked the hours because he could get home early to look after his animals.
Mr Perrett's employee record shows him going up 5p to �2.25 an hour in March,1988. He reached �3 in April,1989, and he must have reached �4 about three years later. His last recorded rise before he gave evidence was to �4.85 in August,1995, but he was earning �4.95 an hour when he gave evidence in January,1996.
Mr Perrett was happy with what he earned, and that was a great credit to his unassuming and ungrasping nature because for those hours, working hard and with some responsibility and total loyalty to his employer, he was taking home, he said, about �280 to �290 per fortnight out of a gross which I work out at about �370. He took four to five weeks holiday a year and worked public holidays for which he was paid time and a half. His accrued holiday pay returned the equivalent of his normal pay for his holiday period.
In Court I calculated that Mr Perrett took home about �7,500 a year including his holiday pay. His gross must have been under �10,000 p.a.
Happily he was able to live at home with his parents, paying "housekeeping" rather than rent.
Mrs Florence Farrer started as a crew member at the restaurant in the Seven Sisters Road in 1975 when she was forty-four and four of her five daughters, as well as her husband, were still living at home. Part of her reason for going to McDonald's was that they offered her 65p per hour whereas a sweet shop and a drapery store offered only 50p and 55p. In 1985 she was made a Floor Hostess. She has always been able to fit her working hours at McDonald's into her home life. The work suited her and she enjoyed it. When she gave evidence in July,1995, she was earning �5.44 per hour having had numerous performance increases on top of an increasing basic rate. She thought that her pay had always been fair for the work she did. Her husband worked, and for all I know he earned a respectable wage or salary, but no doubt her own earnings were a welcome contribution to the family budget.
Of course, Mrs Farrer's hourly rate reflected her long service, as did Mr Perrett's. It was exceptionally long because she started the year after McDonald's started in this country. She spoke of her regular Performance Reviews and rises.
Mr Simon Gibney was a Floor Manager at Colchester. In that position in 1987 he was paid between �2.50 and �2.90 an hour, depending on the time of day, even though his responsibilities involved running the restaurant on some shifts. When he went onto the salaried manager's training programme at the Milton Keynes restaurant he went onto a salary of �6,000 which worked out at �2 per hour for the long hours he worked. When he went on to get work in a pub he was paid a similar amount to his hourly rate as a Floor Manager at McDonald's. Mr Gibney said that he worked long hours at McDonald's because he needed the money and "the only way you could earn a reasonable wage was to do a lot of hours".
I was shown the results of a McDonald's Opinion Survey carried out in June,1994, which showed that of those questioned, who worked internationally and in this country, employed in company as opposed to franchised restaurants, just over half gave favourable answers to questions about their rewards, but they were not actually asked whether they thought their pay was good.
The Plaintiffs said that it was clear that by and large they had no difficulty in recruiting the necessary staff and where difficulties with recruitment did arise, fairly small increases in rates of pay solved the problem. There have been exceptions, but by and large I accept that this was so. They went on to contend that this demonstrated that the wages which they paid were fair, and seen to be fair by those who came to work for them, and that this meant that their pay was not bad.
However, in my view, this ignores the fact that many young people badly need money. Grants from public funds to students in this country are seldom, if ever, enough to provide total support. In the U.S. grants of any amount from public funds for students are very rare. Only a small proportion of students or of young people who have completed their studies, have parents who are both willing and able to support them completely. Every parent knows that in this country there has been a shortage of jobs for decent pay or at all for young people for many years, and particularly for those seeking temporary work or part-time work at restricted times.
For the same reasons I do not think that the fact that one employer's wage rates are competitive with another's providing the same kind of work means that its rates are not "low".
Relatively high levels of unemployment prevailed throughout the period of relevant publication of the leaflet (1987 to 1990) and they have continued to some extent since. Where there is a high level of unemployment one would expect wage rates for relatively menial work to settle at a low level unless there is a statutory minimum wage which is not itself low.
There was evidence which I accept that earnings in the market in which McDonald's operated were generally low.
Mr Philip Pearson, is a research worker and journalist. For many years he was full-time officer with the Transport and General Workers Union (TGWU). Between his work for the TGWU and his present job he worked for the Low Pay Unit. In 1985 he wrote a book called "Twilight Robbery" about trade unions and low paid workers.
In the book Mr Pearson wrote:

Most definitions of low pay agree with the minimum wage target set by the TUC: that no worker, male or female, should earn less than two-thirds the average wage of men in manual jobs. Early in 1984, the average wage for men in manual work stood at about �147 per week. Accordingly, the TUC minimum wage target was �98 for a full-time, 40 hour week, or �2.45 per hour. The target is seen by the TUC as a guideline for union negotiators wishing to eliminate low pay....... The Council of Europe has established a 'decency threshold' of earnings to give workers and their dependants a reasonable standard of living. Their formula is that no wage should be less than 68 per cent of average earnings. In Britain, in January 1984, this would have been about �106 per week - or somewhat higher than the TUC's target wage. The TUC minimum wage is also close to the absolute poverty line for a family of four on supplementary benefit. The level of supplementary benefit is fixed by parliament each year and acts as a safety net. So, for example, a family of two parents and two children would receive a basic benefit of �66.25 a week in 1984, excluding rent and rates. In its publication Low Pay and Poverty in the 80s the Low Pay Unit estimated that for 1983/4 such a family would need gross earnings of �105.45 a week to give a net weekly wage equal to their supplementary benefit. In the same report it was calculated that,in 1983, over seven million workers earned less than �100 a week gross, or �2.50 an hour. This total includes four million full-time and over three million part-time workers. The estimates exclude workers' earnings from overtime. Men in manual jobs rely on overtime more than other workers to boost their pay."
Mr Pearson said that all the figures were gross and they were based, of course, on full-time earnings. The figures varied from country to country but the formula was the same. The decency threshold for Britain in 1984 came out at about the same value as the basic state benefit, although Mr Pearson said that by 1985 the Council of Europe formula figure was well above benefit levels which had failed to keep pace with the movement of wages.
Mr Pearson said that the catering industry was a sector which was recognised as being low paid. High proportions of the workforce in the various segments of the catering industry were paid below the decency threshold level. Both in 1983, when Mr Pearson first looked at figures, and in 1995 the classic catering jobs came in the lowest ten male occupations by pay in the New Earnings Survey. The "External Survey of Hourly Rates" produced by Ms Meade was "gold dust in terms of pay intelligence." It showed McDonald's starting rates below the bottom quartile of the rates of pay of a low paid industry. From an operational point of view the data that mattered, comparing like with like, was the Catering Review Group.
I take two further general matters into account in deciding whether McDonald's pay for crew is low.
Firstly, I am entitled to check what I see as the overall effect of the evidence against the general feel which I have for wage levels over the period with which I am concerned arising from almost daily experience over very many years of people in a large panorama of jobs who have last their earning capacity or had it damaged as the result of injury caused by someone else's alleged negligence. The various hourly wage rates paid by the Second Plaintiff to crew, basic or enhanced, feel low to me.
Secondly, I also have a general awareness of the cost of living and in my view in deciding whether McDonald's pay is low it is fair to ask whether one could earn a decent living, or a living at all, working there full-time.
Mr Preston had some difficulty with this question, saying that most McDonald's employees did not need to earn a living there. "The majority of our part-time people and most of our people are, I suppose, under 21, or thereabouts. They are not heads of household. They are part-time employees, in many cases working for the very first time, trying to bridge their education years to employment years; they have a void in their life they are trying to fill and earn some money".
I do not believe that this answers the question in the Second Plaintiff's favour. There will always be people who are willing to work part-time for low pay, because it is important for them to find some work for limited periods, possibly out of normal office, school or class hours, however badly they are paid.
If anything Mr Preston's difficulty with the question confirms the view which I have reached that the Second Plaintiff's rates of pay for restaurant workers over the relevant period were low and have remained so.
The Second Plaintiff's crew starting rate has been low within a lowly paid catering industry. It was at or very close to the statutory minimum when one existed. Although a starter's pay is generally increased at the end of a three week probationary period and there are generally pay increases every few months thereafter, the increases are fairly small and it is clear from the evidence of crew turnover, to which I will come, that only a minority of crew members stay long enough to obtain any considerable overall increase. Even if you stay a long time your earnings will be low unless you move into salaried management and not many crew members do that in fact.
I do not believe that one could earn a decent living, working full-time as a crew member at McDonald's, without a lot of late, extra hours to bolster one's pay.
I have taken the benefits which come with employment by the Second Plaintiff, such as they are, into account. They are at least balanced, in my view, by the lack of guaranteed hours with some risk of earning less than expected or hoped for in any gien week.
Having summarised the main points in relation to pay, the one piece of evidence which influenced me most was that which spelled out Mr Kevin Perrett's earnings as a longstanding crew member rising to Breakfast Manager at Bath. His hourly rates in the earlier years were above the provincial basic rates given by Ms Meade. They still sound "low" to me, but a net wage of �7,500 p.a. as late as the beginning of 1996 for someone who has had successful performance reviews over a number of years and a degree of promotion, must be "low" in anyone's judgment. There was no reason to believe that Mr Perrett's pay was other than typical.
In my judgment the charge contained in the leaflet that the Second Plaintiff pays its workers low wages is justified.
With some hesitation, I have decided that I am not able to find that the charge that the First Plaintiff pays low wages is proved. The evidence does not in my view establish that it does. There was evidence from some U.S. witnesses that they started on a minimum wage or very close to it. Mr Beavers did. But there was also evidence of crew earnings well above the starting rate, and I do not have the material to judge what is or has been "low" in the U.S. I do not have any feel for U.S. wages and living costs as I do of the U.K. However, the Second Plaintiff's crew wages are low in this country because it follows the First Plaintiff's example of paying a market rate in what is, in this country, a low market.
On the basis that the Plaintiffs' wage rates for crew are and have been low which I find to be true of the Second Plaintiff, the Defendants contended that the claim that they are only interested in cheap labour was justified. The Plaintiffs' executives who were called denied this.
There is obviously a commercial need to budget labour costs, but there is also a commercial need for competent crew who can work efficiently and without undue supervision.
In my judgment what governs McDonald's pay is the obvious need to recruit enough crew who are good enough to do the necessary work to an acceptable standard.
The fact that the Second Plaintiff's wage rates are low is not necessarily because it is "only interested in cheap labour" although it is fortunate enough to be able to get it because of the relative shortage of part-time work, particularly, at better rates.
In my judgment there are four particular matters which point to neither Plaintiff being solely interested in cheap labour.
Firstly there are the standardised starting rates which have not necessarily been the legal minimums where they existed, and which prevail across the nation in the U.K. subject to increases in London and where there are recruitment problems, and across each region in the U.S. There is no discretion for a manager to pay less than the standard starter rate even though there is now no statutory minimum in the U.K., and some people might well be prepared to work for less in his area.
Secondly, there is the practice of performance-related, periodic increases, whether or not the employee would be prepared to stay without them.
Thirdly, there is the willingness to take back trained staff at levels above basic rates, whether or not they would come back for less.
Fourthly, both companies are keen to have crew who appear cheerful to please the customer. I will return to this.
All these factors indicate that achieving productivity is ultimately more important than just paying as little as possible, and this accords with sound commercial sense.
The Defendants did suggest that the First Plaintiff treated black crew members less well than white so far as pay was concerned, in one instance. It related to wages paid to crew at Philadelphia inner city restaurants. In 1989 and 1990 the Philadelphia Unemployment Campaign (PUP) which was a gross roots organisation which also acted as a union, initiated a community campaign over wage rates at McDonald's restaurants. In November,1989, it produced a study showing that crew at McDonald's restaurants in the inner city were paid a starting wage of $1 less than crew at restaurants in the suburbs. Yet food prices were the same.
This had radical implications because the Philadelphia suburbs are principally white and the city principally black. The essence of PUPs claim was that McDonald's was exploiting black people in the inner city by paying less than whites. It received much media attention. Black church leaders became involved and they questioned McDonald's about the claims. Many of McDonald's owner operators in the area were black, and their church leaders views were important to them. A pamphlet of the campaign was "The real Ronald McDonald exploits workers", which is the thrust of the Defendants' case in this Court. Indeed the pamphlet bore the same picture of the malevolent face behind the Ronald McDonald mask, which the leaflet bears.
The PUP study covered 33 of approximately 200 McDonald's stores in the Greater Philadelphia area. McDonald's had doubts about its methodology, so it engaged a respected outside consulting organisation (Tower, Perrin, Foster and Crosby) to investigate. TPF&C's research indicated that the average differential between city and suburban starting wage rates for 28 of the 33 McDonald's restaurants included in PUP's survey (figures were not available for the other five) was actually 11 cents (3.99 for the city against 4.10 for the suburbs), and that the median starting wage for both city and suburban restaurants was exactly the same at 4.00 an hour.
Much time was spent in Court investigating the comparative merits of the two studies. The Defendants suggested that TPF&C's figures were taken in June/July,1990, several months after PUP's which were taken in August to October,1989, and that in the meantime McDonald's had altered stating rates to lessen any discrepancy between the suburbs and the inner city. Mr Stein who was involved in the dispute and who spent some time in Philadelphia, was accused of lying when denying this, and of concealing the full report.
I was not ultimately asked to decide whether the TPF&C study was the more accurate. I do not have material to do so. I do not consider that Mr Stein sought to mislead me over the PUP affair. The restaurant operators involved were predominantly if not solely franchised owner operators rather than McOpCo managers. According to Mr Stein the vast majority of them were black although he was unable to verify that a majority of their inner city employees were African Americans.
Even assuming that crew in the inner city restaurants were predominantly black and that crew in the suburbs were predominantly white and that the former were paid less than the latter, I am completely unconvinced that this was because the owner operators, let alone the Corporation which could not tell them whom to employ or what to pay, chose to pay black crew less. In my judgment, if the assumptions which I have made are true, that state of affairs came about because the market rate for fairly menial labour was less in the inner city than outside it. That may have been because there were more, poorer, black people on the labour market in the inner city and more, better off, white people in the suburbs, but it went nowhere towards proving that the First Plaintiff was espacially interested in black crewmembers as cheap labour or in paying black employees less than it might have to pay white. At worst, it was just another case of paying the market rate, which in this instance resulted in evidence of black workers being paid less by owner operators, not the First Plaintiff, than white workers in a nearby but different area, because of local conditions.
I do not know what the First Plaintiff can be expected to do about that when different franchisees, even those within the same general area, each set their own wage rates. It will not happen in the First Plaintiff's own McOpCo stores within the same general area because wage rates are set as standard across each large region of the U.S.
The evidence certainly fell far short of proving that the First Plaintiff targetted black people in order to pay them less.
There was no other evidence that either Plaintiff paid women or black people less than white men. It was clear that many women with home obligations choose to work at McDonald's because of the attraction of scheduled part-time work which they can leave and return to if they wish.
I accept the evidence which I have heard that it is McDonald's policy to reflect the communities in which their restaurant's operate by, among other matters, employing members of ethnic minority communities where they are strong, but that is a well meant objective, albeit designed in part to make the restaurant more attractive to those in the area.
I reject the charge that the Plaintiffs are only interested in cheap labour. They are interested in inexpensive labour, but they are also keen to have people who will work well.
In my judgment, however, it does follow from what I have said that the charge that the Second Plaintiff has helped to depress wages for workers in the catering trade in Britain is justified. Its wages are low and they are low because they can be competitive with the wages of its competitors in the catering trade and still be low. In keeping to the low common denominator the Second Plaintiff makes its contribution to what are depressed wages.
I cannot say the same of the First Plaintiff because I cannot say that its wages are low.
So far as working conditions, other than rates of pay, are concerned the leaflet specifically mentions evening and weekend work, and long shifts in hot, smelly and noisy environments, with minimal chances of promotion.
I see no merit in the complaint of work in the evenings and at the weekends. Indeed McDonald's attracts many recruits because it offers part-time work in the evenings and at the weekends when employees are not otherwise engaged. Mr Morris suggested that full-time students "would have to be pretty desperate for money" to be prepared to work evenings and weekends as well, but whether this is true or not at least McDonald's gives them an opportunity to earn money. There was no evidence that evening and weekend work did any harm, unless it was unduly extended, late at night, which is another matter.
There was no real evidence that the environment in McDonald's restaurants was unduly hot, or cold for that matter, or smelly, save on exceptional occasions when the weather was unduly hot or cold and there were problems with the machinery which should have maintained an appropriate ambient temperature. Such occasions as were spoken to in the evidence were too few to indicate that work at McDonald's is, typically, too hot or too cold. One McDonald's U.K. manager did say that it was hot working under pressure in the kitchen, but that was in a particularly busy store. It was not a matter which defence witnesses made much of. I will come to hot kitchen equipment when I deal with safety in restaurants.
There was evidence which I accept that the working environment in McDonald's restaurants can be noisy, particularly in busy restaurants at busy times when there can be a lot of shouting of orders and encouragement to work faster. However, most crew in McDonald's restaurants are young and there was little or no evidence that a significant proportion of them were disturbed by the noise. In my own experience most young people are not disturbed by noise, indeed it often appears to appeal to them, to the frequent irritation of their elders. They may of course be upset by being shouted at in an aggressive manner by autocratic managers, which is another matter.
The question of long shifts generally, particularly shifts extended without notice, or without any or any adequate breaks, deserves longer consideration, and I will return to that together with other, undesirable consequences which can be caused by not having enough crew on the payroll of a restaurant to staff it adequately at particular times, or by scheduling too few crew in order to keep down labour costs.
So far as the allegation of minimal chances of promotion is concerned, even a relatively unambitious, full-time or part-time crew member has the opportunity to collect stars and advance to the white badge of training squad. So at a fairly basic level there is room for some advancement. Then there is some real opportunity to move up to the top hourly-paid post of Floor Manager or Swing Manager. All Floor Managers come from crew.
Part-time staff can be First and Second Assistant Managers, but not Store Managers, and Ms Lyn Meade said that 80% of part-time salaried staff (who must, therefore, have been First or Second Assistants) come from crew.
But there is clearly little room for crew to move up into and through the salaried management hierarchy.
I accept the evidence of Mr Nicholson that between 1988 and 1990 when there were something like 26,000 hourly paid employees of the Second Plaintiff, there were about 1,600 salaried, management staff in operational work. Although about 50% of those had started as crew members, that meant that there was only room for a relatively small number of crew as salaried managers.
Mr Nicholson said that he was quite sure that the company could accommodate a greater proportion of management from crew "if they wanted to come in", but the number of management positions is obviously limited in relation to the large numbers of ordinary crew.
I also accept the evidence of Mr Beavers that more than 70% the First Plaintiff's salaried management came from crew, although a significant proportion of that 70% had worked at McDonald's while they were students and had then gone into management there after graduation. Better than 50% of store managers started out as crew. Mr Stein put the figures at 70% of Store Managers and 50% of middle and higher operations management.
I have already referred to Mr Stein's report to the Congressional Sub committee relating to 7,000 salaried Restaurant Managers and Assistants to 85,000 hourly paid crew. Mr Beavers said that there was a very limited number of people in management positions and there were a lot of people doing menial work. The compensating factor was that there were employees who were not looking for full-time work or to make a career at McDonald's. In fact this last comment was a considerable understatement, in my view.
I have no reason to doubt Mr Stein's evidence that about 30% of U.S. owner operators started out as crew and that a random but good representative sample of fifty owner operators showed that 94% of their managers started as crew.
The difficulty in judging the allegation of minimal prospects of promotion is in deciding whether the small number of crew-advanced managers, that is small in relation to the number of crew throughout the country at any given time, was and still is due to lack of opportunity in a system which requires a large payroll of crew available for proper scheduling, often for relatively few hours per week, or whether it is due to lack of interest by part-time workers whose main interest is in their studies or domestic responsibilities, since advancement even to Floor Manager requires dedication and involves considerable responsibility, and advancement to salaried management beyond First and Second Assistant involves commitment to a full-time career at McDonald's.
No very clear picture appeared from the developing bath of evidence
There is no doubt that the prospects for keen and able people have been very good. By the time that he gave evidence in the middle of 1995, Mr Stanton was responsible for the operation of nearly 170 restaurants at the age of thirty-three, having started as an hourly paid crew member, albeit a university graduate looking to fill some time, twelve years before.
Ms Lyn Meade had moved up from part-time work as a schoolgirl and student to Floor Manager and then into higher management after graduating from university. She gave examples of others who had done well when they wanted to, directly from crew positions.
So for people of ability and ambition the route upwards is clear.
My conclusion is that McDonald's is a pyramid with a very wide base and initially shallow pitched sides which, however, grow rapidly steeper once people are on the management ladder.
I have concluded that while it would be accurate to say that the statistical chances of significant promotion for crew members are small because of the nature of the wide based pyramid, it is not true to say that the chances of any promotion are minimal. There is a real chance of anyone who is really interested moving to some level of responsibility and most people who work in McDonald's restaurants would not, in my view, think that conditions there were bad because of the very small statistical prospect of significant promotion, because they are not interested in significant promotion in their part-time job.
Although it is not mentioned in the leaflet, it was an important limb of the Defendants' case of allegedly bad working conditions that McDonald's restaurants were often understaffed and that understaffing in the McDonald's system of close scheduling, combined with autocratic management, and the overriding need to serve customers quickly led to unduly hurried and stressful overwork, long hours, unexpected and undue extensions to shifts, particularly at night, with illegal, late working by crew under eighteen, shortened breaks or no breaks at all, sending home early without pay if things are quiet, an increased risk of accidents, and late performance reviews, all without any real means of protest. The Defendants called a number of witnesses who gave evidence to this effect. Working conditions in the restaurants at Colchester, at Bath and near Heathrow were particularly closely examined but witnesses were also called to speak of practices at other restaurants. There was a considerable discovery of documents from Bath and Heathrow: less from Colchester where events complained of were longer ago. The Plaintiffs did not choose the particular restaurants for examination as they chose, for instance, the suppliers whom their experts should investigate. The particular restaurants came into the front line of the case because the Defendants were able to call witnesses who had worked there.
The Defendants contended that the evidence in relation to Colchester, Bath, Heathrow and other restaurants pointed a dire picture which I should take to be typical of McDonald's restaurants generally, not just because the essential system was the same elsewhere but because, they contended, McDonald's understaffed on purpose to save money.
They relied upon the fact that budgets are periodically set for each restaurant stating a target percentage of turn-over to be spent on wages, and they pointed to a Management Training Handbook which stressed the importance of labour costs and of tracking them against performance on a daily and weekly basis. They said that higher management was obsessed with labour targets and that as a result restaurant managers were under great pressure to meet labour percentage targets which were generally in the region of 15% of sales.
The Plaintiff accepted that there were recruitment problems for a time at Colchester and Heathrow and that these brought problems of understaffing with them, but the extent of the adverse effects of understaffing was hotly disputed and it was disputed that understaffing was a common problem in the McDonald's system. They said that understaffing would be counterproductive. Mr Nicholson, speaking of the U.K., said that there was no point in arbitrarily keeping to a figure like 15%. Mr Beavers, speaking of the U.S. said that McDonald's tried to recruit the best people they could.
A number of the Plaintiffs' witnesses gave evidence to the effect that a target percentage of sales for labour costs was easier to meet the more your sales grew, and that sales growth depended upon good service which depended upon good and contented crew and management.
When it was suggested to Mr Atherton who had worked his way up from being graduate Trainee Manager through various management positions to Head of Training of the Second Plaintiff, and who was Area Supervisor of Colchester for a while, that the company was committed to keeping labour costs down as a percentage of sales per store he said that was not the company's objective but "we budget like any business on an annual basis and the labour line is one line. It has to be controlled like every other line. It is part of doing business".
Mr Stein said that in the U.S. labour costs were generally a higher percentage of sales, 17.5 to 18% or maybe a little higher, than they were in the U.K. where restaurants had a higher sales volume and counter prices were possibly higher. It would be "a dumb way of doing business" to set a rigid standard or limit for labour costs at the company's head office in Oakbrook. It was a "bottoms up approach" starting with the restaurant assessing the crew needed to cope with the custom which it anticipated and moving its plan up through the management to Oakbrook which never reduced the budgeted labour percentage. Focusing on labour percentage would be self defeating. Satisfied customers were more beneficial for profit than low labour costs.
I propose to summarise the nature of the evidence and my essential findings in relation to general working conditions at the particular restaurants, because it was the Defendants' case that there was a consistency of allegations which indicated that malpractice was widespread and not just restricted to the restaurants of which evidence was given; the Plaintiffs contended that working conditions in McDonald's restaurants were generally good and that any failures to meet company standards were aberrations.
I make no apology for omitting far more detail than I include.
I will take things broadly in chronological order, but starting with the Colchester evidence.
The principal witnesses called by the Defendants to tell of events at the Colchester restaurant were Mr Simon Gibney, Mr Siamak Alimi, Mr Omid Shafibeik, Mr Ray Coton, Mr Kevin Harrison and Miss Kate Scannell, later Mrs Kate Harrison.
The Plaintiffs' principal witnesses were Mr Mark Davis, Mr Frank Stanton, Mr Neil Skehel and Mr Steven Harney.
The evidence covered the years from 1984 to 1991 which encompass the period of relevant publication of the leaflet between 1987 and 1990. They were the first seven years of the Colchester restaurant's existence.
Mr Davis, Mr Coton and Mr Stanton were most involved in the management and immediate supervision of the restaurant during those years. Mr Harney and Mr Gibney had lesser management positions.
Mr Davis became First Assistant Manager at the restaurant when it opened on 1st June,1984. He became Manager of the restaurant on 1st November,1984, when Mr Coton who had joined the crew ten weeks before became a Trainee Manager. Mr Coton became Second Assistant Manager on 1st March,1985, and First Assistant on 1st April,1986. In the meantime, in February, 1986, Mr Stanton had become Area Supervisor for three East Anglian restaurants including Colchester.
On 1st August,1987, Mr Davis was promoted to Area Supervisor in place of Mr Stanton who was promoted to a position as Senior Supervisor elsewhere. Mr Coton took over as Manager of the Colchester restaurant under Mr Davis's area supervision. He had done all his management training and practical work under Mr Davis's management.
On 4th February,1991, Mr Davis was promoted to a position as Senior Supervisor elsewhere. Mr Neil Skehel took over as Area Supervisor. Mr Coton did not last long as Restaurant Manager after that. He resigned at the end of August,1991.
The Colchester restaurant was the Second Plaintiff's "Store of the Year" in 1987. Mr Stanton was Area Supervisor of the Year in 1987 and he has done well with the company as I have said. Mr Davis became Area Supervisor of the Year in his turn, and he is now an Operations Manager (Senior Supervisor) in Mr Stanton's region.
The Colchester restaurant opened at 7 a.m. and closed at 11 p.m. save on Fridays and Saturdays when it closed at midnight. The two main shifts for full-time staff like Mr Gibney and Mr Alimi were 7 a.m. to 3 or 4 p.m. and 4 p.m. to 11pm.

Mr Simon Gibney now has his own, small, transport business which he runs with a partner in Colchester. He was an impressive witness. Pleasant, straightforward, accepting some things under cross-examination and explaining others.
He went to work at the Colchester restaurant as a sixteen year old when it opened in June,1984. Mr Gibney was a successful crew member at Colchester and he became a Floor Manager just after his eighteenth birthday in November,1985. He often ran the whole restaurant as a Shift Running Floor Manager. He could not advance to salaried management because he was under twenty-one but he was entrusted with the duties of a Second Assistant Manager including crew scheduling and weekly paperwork. In fact he was promoted to the salaried management training programme on his twentieth birthday, a year earlier than normal. Although this is not unheard of for someone who has worked for the company from the age of sixteen, it is an indication of the high regard in which he was held. He left Colchester in November,1987, when he became twenty, to start his management trainee programme in the Milton Keynes restaurant, but he said that he was badly treated there, and I believe that he did not like being away from Colchester, and he left McDonald's after a month, on Christmas Eve of 1987.
The essence of Mr Gibney's account of matters was that everything had a target, whether it was the amount of milkshakes per gallon of shake mix or the number of cola drinks per litre of syrup or the amount of ketchup per burger. The Colchester store was set specific targets by Mr Stanton whom Mr Gibney described as a highly ambitious man who lived for McDonald's. As a result drinks syrups, ketchup, shake mix and mustard were watered down and lettuce and cheese were pared. Fry cartons were squeezed when filled so that they held less. Mr Gibney said that Mr Stanton directed this when he was Area Supervisor and Mr Davis put it in hand just before he became Store Manager. This was hotly disputed by Mr Stanton and Mr Davis and counsel for the Plaintiffs, who suggested that it was impracticable or unlikely for various reasons. I believe Mr Gibney's evidence that it happened. He gave positive evidence and I think that he was on honest witness when it came to saying whether things had happened at all although the frequency or extent of some matters may have grown in his memory over the years before he gave evidence in October, 1995, and he may have drawn inferences which were justified. In my judgment Mr Davis must have known and organised what was going on, but the involvement of Mr Stanton depended on assumption by Mr Gibney, and I am not prepared to find that he directed or knew of these malpractices, on assumption alone.
The relevance of what happened in relation to food and drink is to show the pressure to succeed in financial terms, which ordinarily honest people like Mr Davis felt. That pressure paid off as the awards and Mr Stanton's and Mr Davis' subsequent success, showed. That pressure to succeed obviously had a potential for affecting conditions of employment.
Mr Gibney said that a 15% target set for labour costs as a proportion of takings was the key to how many people were scheduled to work at certain times on certain days throughout the week and that management anxiety to keep labour costs down meant that if takings at a particular time were less than forecast crew would be asked if they wanted to go home. If too few people obliged, reasons would be found to send people home, for instance not using the correct procedures on grills or wearing hair too long. People arriving for shifts would be sent home for having a creased uniform or being unshaven. On the other hand, if the restaurant was busier than forecast people worked whatever their appearance and those already at work would be pressured into staying on until the store went quiet by a threat of a cut in hours for the following week or by being told that their area needed cleaning.
The restaurant manager would look at the labour percentage regularly during the week and on Sunday, if he realised that it was going to be too high for the week, he would run very short-staffed at times to try to bring it down.
Until January,1990, there were statutory restrictions on how late young people over school-leaving age but under eighteen could work. Young women were not allowed to work after 10 p.m. and young men were not allowed to work after 11 p.m. In January,1990, the statutory deadlines were repealed, but the Second Plaintiff issued guidelines that no young person should work past midnight and consideration should be given to travel arrangements home. The statutory requirement for a minimum eleven hour interval between shifts worked by young persons was removed, but the Second Plaintiff's guidelines said that it should continue to apply.
Yet Mr Gibney said that when he was still under eighteen he regularly worked past midnight. He would be scheduled to finish at midnight but would be made to stay until 1 or 2 a.m., perhaps being told that he had not cleaned his area properly, if the restaurant was short of staff to clean up. He was told to clock out at midnight and he was given a bonus to pay him for time worked thereafter. A note of the bonus was written on his clock card. He said that "under 18 year old males working past midnight was the norm". He worked in other restaurants from time to time as a Floor Manager to help out and he doubted that there was an under 18 year old, male full-timer who never worked past midnight. If you were asked to stay on but said "no", you were threatened with a cut of hours the next week or given nasty jobs like cleaning the toilets or scrubbing floors.
Mr Gibney said that women under eighteen did not work after 10 p.m. at Colchester because shifts scheduled to end at 10 p.m. were not useful to the shift system which I have referred to and scheduling them to work after 10 p.m. would reveal the illegality.
Mr Gibney said that he worked after midnight on many occasions. He would say about fifty times.
The period of time spent cleaning up after the restaurant closed at night was called a "close". Mr Gibney said that if you were scheduled for a close you would expect it to take about an hour and a half. If the store was to have a visit from anyone above the level of Area Supervisor there was an all night close when those scheduled for the close would have to work all night to make the restaurant look its best. There was no choice, even if you were on a long noon to close shift. This could mean working until 7 a.m. and being back on duty five hours later. If you complained you were threatened with a cut in hours.
Mr Gibney said that on several occasions he worked a shift of eighteen hours from noon to 7 a.m. (presumably less one hour's break). When pressed, he put the number of occasions at about a dozen in his three and a half years at McDonald's. There were more all night closes than that but he was not always on duty. On one occasion he worked a 4 p.m. to close shift. He was then expected to work until 7 a.m. all night cleaning the store. The restaurant was then short of staff so he was asked or pressured into staying on until after the lunch period, so that shift lasted twenty-three hours without leaving the restaurant. He was around eighteen; it would have been the middle of his time at McDonald's.
Mr Gibney said that during busy times of the year full-time workers could do as much as 60 to 70 hours a week, but no hours were guaranteed, so the same worker might do as little as 25 hours. He himself sometimes worked as much as 60 or 70 hours a week because, as I have said when dealing with wage rates, he needed the money and he had to do a lot of hours to earn a reasonable wage.
School holidays were particularly busy because school children came into the city every day. The restaurant had a small increase in staff for holidays but it was difficult to get staff in the mid to late 1980s.
Mr Gibney said that Siamak Alimi would have worked 60 to 70 hours a week.
Mr Gibney said that after holiday periods, particularly the summer holiday, the Colchester restaurant would go comparatively quiet and people would be failed on the Performance Reviews at the end of their three weeks probation and not kept on so that the payroll was reduced at the end of the school holiday, when they had been considered acceptable when the restaurant was busy. Their probation could have been extended. The probation of a lot of probationers, more than three or four, coincided with the end of the school holidays.
Mr Gibney said that inexperienced staff were left on potentially dangerous equipment to keep the labour rate down. He said that burns were commonplace and that occasionally they were serious enough to warrant hospital attention. He gave the example of a Ms Vicky Golding who slipped while mopping the kitchen floor and put both forearms on a hot grill, burning them badly. She lost a foreign holiday as a result. She discussed compensation with the restaurant manager who was by then Mr Coton who gave her some form of bonus as "hush money".
One of the Defendants' criticism of working conditions at McDonald's was the importance of what the Plaintiffs call "hustle". Mr Gibney said that to him "hustle" meant fast work. If you told someone to hustle you were telling them to work faster. The speed at which people worked made it inevitable that there would be "small accidents, burns or cuts or whatever, or people sliding and falling over ...".
Mr Gibney said that repair of equipment was delayed so that equipment costs did not go over the set percentage.
There was an Accident Book in the Colchester restaurant but it was rarely used. People considered a small cut or burn to be part of the job and they did not report it. Mr Gibney suffered many burns and went to hospital with burns on two occasions. He had to have stitches in a cut finger on one occasion. He did put his own injuries in the book if they were serious, and he made sure that any serious injuries went in the book if he was working.
Mr Gibney said that he went on a Floor Manager's course at the Second Plaintiff's Hamburger University which involved videos and speeches congratulating the company. What little learning was done was "basically just reading the Operations Manual and expecting everything to be done that way, which, in reality, it was not that way .... Because to run the store the way the Operations Manual suggests, you need far more staff on. This would be the case if you had an important visitor; the store would be staffed at a level where everything could be carried out properly ...".
Mr Gibney said that his overall impression of his time at McDonald's was the pace of work there. He remembered that when he started work at a pub after leaving McDonald's other people there were amused because he could not sit down. He had to clean an ashtray or wipe the bar when there was no one to serve.
Mr Gibney did accept that the budgets or targets which the restaurant was set were quite different from an order on high which should not be exceeded.
When it was suggested to Mr Gibney that he did not feel very well disposed towards McDonald's, he said that he did not have any particular opinion. He still ate there.
Mr Siamak Alimi worked at the Colchester restaurant from October,1985, when he was already thirty, until the end of August,1987. So Mr Davis was the Restaurant Manager for all but the last month of his time there. Mr Coton was Manager for the last month. Mr Stanton was Area Supervisor for all but the first two months and the last month. Mr Alimi was a member of the Training Squad by the time he left. He has gone into Information Technology since.
Mr Alimi said that he was told by managers that the labour cost at Colchester was set as low as 12% of sales but he was also told that it was 17%. The records of staffing percentages appeared on a chart on a wall where the managers worked. Managers got a print out of labour costs daily and planned their manning levels daily. There was a lot of pressure and they were happy or unhappy day by day depending on the relationship of staff costs to sales.
He recalled Mr Davis telling him to squeeze the fry boxes when filling them, in order to increase the yield.
Mr Alimi said that under eighteen men worked after midnight and women after 10 p.m. They were asked if they wanted to work past those hours and if they agreed they worked the same hours as everyone else. Most refused and no pressure was put on them.

Mr Alimi gave the same account as Mr Gibney of clocking out at the legal time, marking of the clock card with a bonus and payment of the "bonus". He named Mr Gibney and Mr Harney as under eighteens who were required to work late. They were Floor Managers, and he named them and another man as managers whom he had seen writing a bonus on a clock card. Also the clock cards were hung on the wall to see.
He said that it would be impossible for the Restaurant Manager or a Floor Manager to work under eighteens past 10 p.m. or midnight and to pay them bonuses without the Area Supervisor knowing.
Mr Alimi said that he generally worked the "close" shifts and he regularly did not finish until 3 or 4 a.m. or even 6 or 7 a.m. He repeatedly complained to management because he was married and his wife would be on her own all night without knowing where he was because they were not on the telephone. He asked management for advance notice of late closes but he was not given it. He led others to protest. Their campaign was not against late closes but lack of notice.

The reason for the closes at 3 or 4 a.m. was that ordinary late night closes were protracted to make things spic and span. The closes to 6 or 7 a.m. were all night closes to prepare for visits by higher management.
He said that late closes occurred three or four times a week at certain times of the year. There were threats to cut hours if people did not stay on. Mr Gibney was in charge of schedules and he cut one man's hours because he would not stay on.
With the help of his diary Mr Alimi found three all night closes within four weeks on 7th April, 19th April and 3rd May, 1986. From Monday 5th May, 1986, he worked every day for eight days. There were no other all night closes in the part of the diary which was copied and it did not reveal closes, other than all night closes, extending as late as 3 a.m. or 4 a.m., although Mr Alimi insisted that they occurred.

Mr Alimi said that he knew of employees working as many as twenty-six hours in a row which they were scheduled to work a late shift one day, it was extended until 6 a.m. or 7 a.m., and they were scheduled to return to duty at that time.

He gave a seventeen year old girl, Tracy Millane, as an example of someone who worked 26 hours because she had left home and desperately needed the money and management know this. Mr Alimi worked a late shift. She had started before him, at midday. When he came back for his next late shift she was still working and she continued to work the next shift after he came in. I suppose she could have gone off while Mr Alimi was away, and come back before him, but I do not doubt his account of what he saw and it must have involved her working very long hours without much of a break between shifts, on any interpretation of events.
Mr Alimi said that he occasionally worked sixteen hour shifts from 12 noon one day until 4 a.m. the next. He said that when break entitlements and free food allowances were calculated, the calculations were based on scheduled hours rather than hours worked so that crew who worked beyond their scheduled shifts missed out. He was often sent on his break at 5 p.m. when working a 4 p.m. to midnight shift. All crew breaks were over by 7 p.m. on the evening shift. As a "training squad" he was instructed to send people on their breaks before it got busy.
He said that if people refused to work extra hours on a late shift, their scheduled hours were cut so that they had to leave for want of money. Crew were told that if they refused to work on, their hours would be cut or that scheduling preference would be given to others. They were told that their promotion prospects would suffer.
Mr Alimi's account of the number of late closes appeared to be geared to the visits of the Area Supervisor as well as to visits of higher management and his evidence was challenged on the basis that all night closes for an Area Supervisor who dropped in frequently without notice were impossible . He said that Mr Stanton expected things to be spruced up just for him. Later on Mr Stanton visited more often and crew did not finish as late. But he was not suggesting that all night closes took place when the Area Supervisor was expected to visit. All night closes took place to prepare for visits by higher management.
Mr Alimi said that no one was allowed to take a taxi, paid for the McDonald's, after working a late shift. Women were left to walk home at 3 a.m. and employees often paid for taxis themselves. The claim that there was a taxi account for staff who worked on the close was news to Mr Alimi. He did not know of anyone whose taxi fare was paid by the company. There was no mention of taxis at all. He did later say that a taxi was booked to take him to and from hospital when he had an accident.
Mr Alimi said that on average he worked six days a week completing anywhere between 32 and 60 hours a week.
He produced payslips which showed him working 88.84 hours in the two weeks to 8th February,1986, 98.94 hours to 22nd February,1986, 82.57 hours to 22nd March,1986, and 93.76 hours to 5th April,1986. Then he worked 86.96 hours for the two weeks to 3rd May,1986, and 92.36 hours to 17th May,1986. Then he worked 94.02 hours for the two weeks to 18th October,1986, and 87.24 hours to 7th March,1987.
The importance of those hours, where he must have worked more than 39 hours in one if not both weeks, and of other fortnights where he worked 79 hours or close to that and may, therefore have worked more that 39 hours in one week was, firstly, to show that some people did work more that the company's expressed maximum of 39 hours a week and, secondly, to show that if, like Mr Alimi, crew worked long hours and their basic wage was near the minimum they could end up with less than the Wages Council minimum with its entitlement to overtime rates. However, the payslips do cast doubt on Mr Alimi working as much as 60 hours a week in my view. It is true that in a 90 plus hour fortnight he could in theory work, for instance sixty hours one week and thirty or so in the other but it looks unlikely to me, especially where one high fortnight follows another. It seems unlikely to me that Mr Alimi was working twice as much one week as the next and then back again. He said that he chose the payslips at random but I think that he must have included the high ones in an attempt to make his point about high hours. I reject Mr Morris's suggestion that the Second Plaintiff picked two week pay periods in order to cover up high individual weeks. The two week pay periods are no doubt administratively more convenient than weekly ones without keeping hourly paid crew out of their money for too long.
Mr Alimi said that people were sent home as much as two hours or four hours early if the restaurant went unexpectedly quiet. Most people were quite happy to be sent home early but regretted it when pay day came. If it became too regular people refused to go. Some who refused were sent home early; or individuals were picked on for having a creased uniform or needing a haircut when they were allowed to stay when the restaurant was busy. He overheard managers telling other managers to pick on crew members to be sent home.
Mr Alimi said that the hose on the machine which filtered the cooking fat (shortening) while it was still hot was faulty. Management knew but did nothing. One night Mr Alimi was instructed by Mr Harney to filter the hot shortening without the protective visor which was lost. The defective hose blew up and hot shortening splashed into his face and eyes. He was sent to hospital for a check up.
The bun toaster's hot top plate was loose and fell on the operator. He was burned by it.
He remembered Ms Golding's accident.
I was not made clear to crew members that they should put accidents in the book.
Mr Coton, when Assistant manager, put Mr Alimi in charge of routine maintenance including basic electrical jobs, with Mr Davis's knowledge, without training.
Mr Alimi said that "hustle" meant move faster and you could not move faster without sliding because you were already going at maximum speed anyway. Mr Stanton would frequently come in, especially on busy shifts, and the first thing he would say to the crew was: "Let's see some hustle. Let's get moving". That has the ring of truth.
Mr Alimi said that the organisation of Rap Sessions, when crew could in theory raise complaints about their treatment, was haphazard, so few people knew about them. Any McDonald's manager who ran them, whether from the immediate area or not, was regarded by the crew as a "company man" and was not trusted. He might relay information on those who had voiced criticisms with the result that they would get a hard time. So Rap Sessions were not generally taken seriously by the crew. Mr Stanton chaired a Rap Session at Colchester although he was its Area Supervisor.
When Mr Alimi made his first statement in March,1988, for other litigation involving McDonald's, he said that Mr Gibney would not be prepared to give evidence against McDonald's as he was very committed to his career at McDonald's.
Mr Raymond Coton spent six years in the army before spending seven with McDonald's in Colchester between August,1984, and August,1991. I have already said that he was Restaurant Manager from August,1987, under Mr Davis who had trained him up and who became his Area Supervisor. He found the pressure during the last year very hard, he said, and he applied for another job in January or February,1991, which was when Mr Davis was promoted and Mr Skehel came in. He had been hoping to be made Area Supervisor himself.
There was a lot of argument about whether malpractices which Mr Coton admitted to as manager had been taught him by Mr Davis and whether Mr Skehel picked on Mr Coton when he came, causing Mr Coton to leave. Having heard all the evidence I came to the firm conclusion that Mr Coton was a well meaning but not particularly effective manager. He was brought up by Mr Davis under company pressure to train up managers and he just coped, so far as results were concerned, by cutting corners when Mr Davis was his Area Supervisor both chivvying him and looking after him and knowing some, at least, of what was happening. But when Mr Skehel came and wanted the same results without cutting corners he could not cope. He probably knew what was going to happen as soon as he knew that Mr Davis was going to leave.
The essence of Mr Coton's evidence was as follows:
There was a lot of pressure on management to keep labour costs down. This applied on a store by store basis, and also within the region as a whole. The store was expected to keep within its set budget. When senior officials visited, the store management would have to increase staffing levels drastically to around 20% of sales, for example. They would then have to decrease labour costs for the rest of the week down to 10%, for example, in order to conform to the usual weekly budget.
There was also pressure to keep costs down which involved giving smaller portions of some items, for example lettuce, and watering down others. He said that he believed that the order to do these things came from Mr Stanton through Mr Davis. He said that it originated from Mr Stanton at a manager's meeting but I was not confident that Mr Coton was remembering such a meeting rather than assuming that it must have taken place. He did not think it was wrong. He just saw it as a way of improving profitability.
However, the labour percentage was the biggest obsession which the company had. It was monitored every day, week and month. Mr Davis and Mr Stanton when they were Area Supervisors rang every day about it. If he did not meet his target on one day he was told in no uncertain terms to sort it out.
The Area Supervisors were under pressure from above. Mr Coton gave me details which gave this the ring of truth.
The pressure to keep labour costs down resulted in unacceptable practices.
Men under eighteen worked beyond their legal time at night, but were clocked off at the correct time and given a "bonus" instead. At least two, three or four times a week someone who was under eighteen would be asked to stay on after midnight.
The schedule could be used in a discriminatory way to favour some crew at the expense of others.
It was an unwritten rule that those who were interested in promotion would have to work very long hours to impress. It was not unusual for Mr Coton to work seventy hours a week.
People from head office visited about once every month or six weeks. Such visits meant an all night close to 4 or 6am. An average close would be at about 1 or 1.30am.
Most seriously, people had their clock cards altered and hours docked off their time. He said that he was taught to do this by Mr Davis. It was done by Mr Davis when he was manager and by Mr Coton when he was manager. It was happening when the restaurant was made Store of the Year. The watering down would also have been happening then. It was extensive, by Mr Coton's account.
Mr Coton said that he did not know whether altering clock cards was just something which was done at Colchester branch level. He got the impression that other people knew, but he did not know for sure.
He remembered Ms Golding being injured. She was not paid "hush money". She was about to go on holiday so she was given something to compensate her for her lost time.
Mr Coton said that many of the company procedures were fine in theory or on paper, but in practice it was impossible to comply at restaurant level due to the pressure from above. "There are two types of McDonald's. There is the Manual, what happens at training, and what happens on the Full Field Audits, and there is what happens when those things are not going on. You know when a Full Field is going to happen; if not you are notified. You normally find out the day before it is going to happen. You are ready for it. You have your people on. So it tends to be a time when you perform at your best because you know they are happening. Then what actually happens when they are not there, it is slightly different. There are two or I felt there were definitely two distinct lines. There was the book, what happened when people came down and visited you, and how the stores were run when you were left on your own."
At Colchester there was always a problem getting enough crew members, according to Mr Coton. But the messages were conflicting. He was told that more crew were needed, but than he was told that labour costs were too high.
I was shown various Performance Reviews. The whole tenor of the Performance Reviews of Mr Coton by Mr Davis was pressure to do better. "Chase the tenths of a %". Mr Davis's Performance Reviews showed that he was put under pressure by his first Area Supervisor when he first became Restaurant Manager. No matter how well they did, they were expected to do better.
Mr Omid Shafibeik worked at the Colchester restaurant for a short period in 1984 and a ten month period in 1985 to 1986 when Mr Davis was the Restaurant Manager. The management knew that he was an Iranian with no family in this country, who could only work at weekends but who was very dependant on his money from McDonald's.
He gave evidence of long shifts, working all night, being made to do dirty jobs or threatened with cuts in his hours if he refused to stay on past the end of his shift. A taxi home was never provided. Girls under eighteen worked after 10pm and boys under eighteen worked after midnight. He remembered seeing Ms Golding's burns. Others suffered serious burns.
Mr Kevin Harrison worked for McDonald's between September,1986, and September,1987. He spent three month at Colchester as a Second Assistant Manager before transferring to Ipswich.
He said that labour costs were an obsession. He thought 10% was acceptable when making his statement but he put it at 12 to 14% in the witness box.
It was quite common for managers to instruct people to go home if things were slack.
He thought there were late night closes; twice in three months at Colchester and more at Colchester than Ipswich.
Mrs Catherine Harrison spoke of pressure to finish breaks early, at Colchester and all the other restaurants at which she had worked.
She was aware of people working long shifts at Colchester and she said that she sometimes worked from 5pm to 4am when she was at the Romford restaurant.
She recalled late closes about every couple of months when "bigwigs" visited and there was panic about the visits.
She said that burns and cuts were not taken seriously. "Hustle" meant "move quickly".
She did say that she recalled times at Colchester when Mr Davis or his predecessor was the Restaurant Manager and her paid hours were short. She kept a record of her hours. She queried it and the pay was added to her next payslip. She kept a record of her hours and I assume that the managers must have come to know that when she made her first query.
Rap Sessions and Crew Meetings improved matters of complaint for a week or two, but not in the long run.
Both Mr Davis and Mr Stanton denied any knowledge of or participation in watering down drinks etc or paring food portions or docking hours.
Mr Harney who was a crew member, a Floor Manager, a Trainee Manager, and Second and First Assistant Manager at Colchester between July,1984, and May,1989, was sure that no docking took place under Mr Davis because when he was an hourly paid worker (until February,1988,) he generally checked his hours and he only discovered a discrepancy once. That was between August,1987, and February,1988, when Mr Coton was the restaurant manager. He worked long hours by choice as a Floor Manager. He knew the crew well. No one ever spoke of their hours being docked.
Mr Skehel said that he only discovered pay docking when he was told in May or June,1991. Mr Tim Taylor and Mr John Atherton who were higher up the management tree said that they knew nothing of pay docking until it was revealed that Mr Coton had been doing it.
All the Second Plaintiff's higher management witnesses said that McDonald's was primarily concerned with sales and looking after the customers rather than cost cutting. Targets were not arbitrarily imposed. It is clear from Mr Davis's Performance Reviews of Mr Coton, when Mr Davis was Area Supervisor and Mr Coton was Restaurant Manager, that Mr Davis was encouraging Mr Coton to get numbers of crew members up and to keep them up. "Under-accruing in labour is a false economy".
Mr Stanton denied the practices of working under eighteens after legal hours, of sending people home when the restaurant was quiet and of punishing them with dirty jobs or cutting hours to force them to work longer than their scheduled hours. All-night closes were only worked once a quarter maybe, and no one was forced to do them. Mr Alimi's hours, as shown on his payslips, were unusual. Scheduling was designed to avoid shortened or awkward breaks. Taxis were available for closes. Safety was not compromised. "Hustle" meant "moving with purpose and despatch", not running or sliding about, and theory was put into practice at Colchester. He may have stood in to run one Rap Session if the visiting supervisor did not attend and he wanted it to take place anyway.
Mr Davis's evidence was to much the same effect. He explained a system of paying for taxis out of the petty cash. He said that a substantial number of crew lived within walking distance of the restaurant and there were adequate buses until 10 or 11pm. If a woman of nineteen or twenty stayed on until 1am to do a close she would be sent home by taxi paid out of petty cash, but taxis were only paid for after midnight.
Mr Davis' own Performance Reviews show that he was reprimanded by his first Area Supervisor (before Mr Stanton) for being undercrewed and told to instigate a comprehensive crew hiring programme as early as September,1985. In October,1986, Mr Stanton told him that the restaurant still suffered from too many crew working more than 35 hours a week. In September,1987, Mr Taylor told him to get more crew on board at Colchester.
Mr Davis said that double or back to back shifts happened very infrequently. There were crew members who asked for double shifts. He could not accept that when the restaurant was busy people needed a full break, not less.
Mr Morris, remembering Pangloss, suggested to Mr Davis: "That is your position, is it not, that is the Company's position? Everything is fine in the best of all possible worlds; everyone is happy at McDonald's, working at McDonald's?"
Mr Davis replied: "I do not think that McDonald's has ever professed to be a perfect company, and I have never said in the course of my evidence that everything at Colchester was extremely rosy. However, predominantly I remember it was most of the crew members there were happy, the management were happy and generally the store well run.".
Mr Harney said that he went on to manage the Clacton restaurant under Mr Davis's supervision between June,1989, and February,1991, and that Mr Davis never put pressure on him or suggested using unacceptable methods to meet costs targets. The targets were realistic and set by Mr Davis and the company after careful discussion with him as Restaurant Manager.
I have reached firm conclusions about the essentials of alleged employment practices at the Second Plaintiff's Colchester restaurant between 1984 and 1991. They are based upon my judgment that Mr Gibney was an essentially honest witness; upon the fact that some of his allegations were supported not just by the evidence of other Colchester witnesses but by the evidence of similar events and practices in some other restaurants, to which I have yet to come; and upon what I see as the inherent likelihood of a system run at local level by relatively young and inexperienced managers and dependent, for its much sought after profits, on fast service by a pre-scheduled number of predominately young employees in a real world where such scheduling can be awry for a variety of reasons.
Although I have yet to come to the evidence of other restaurants, it is convenient to give my essential findings on Colchester now.
The Area Supervisors were very keen to impress by the performance of their restaurants including Colchester and they put a lot of pressure on the Restaurant Managers to squeeze the most out of the restaurant. There may be little, if anything. wrong with this in normal circumstances, but at Colchester there was a problem with the recruitment of sufficient staff for an adequate payroll and there was an obsession with the target set for labour costs as a percentage of takings.
Those matters together must have led to hard and hurried work during parts of some shifts. They led to some crew working relatively long hours in some weeks, although the weekly maximum was probably around 45 to 50 hours, rather than 60 or 70, without what I would see as appropriate recognition by overtime rates.
They led to crew being kept on at the end of their shifts without prior notice, from time to time.
They led to ordinary "closes" being extended longer than they should have been at night although I believe that 3 to 4am was unusual for an ordinary close and that 1 or 1.30am was more usual. They led to all nigh