would you like fries with that 10 minute break?

In 2023, a nationwide class action was filed in the Federal Court of Australia against McDonald’s Australia Limited and a series of franchisees, coordinated by the Retail and Fast Food Workers Union (RAFFWU) and supported by Shine Lawyers. The claim focused on systemic non-compliance with the Fast Food Industry Award 2010 (Cth), specifically regarding the provision of paid 10-minute rest breaks for employees working four-hour shifts or longer.

history

An earlier Federal Court decision involving a McDonald’s franchisee confirmed that failures to provide paid rest breaks under the Fast Food Industry Award constituted unlawful conduct. That decision informed subsequent union investigations and contributed to the emergence of broader claims alleging systemic non-compliance across the franchise network.

The alleged non-compliance came to light through a combination of individual worker complaints, union investigations, and earlier enforcement proceedings involving McDonald’s franchisees. In some cases, workers alleged they were informed that breaks were unavailable, optional, or conditional in ways not permitted by the Award.

This proceeding arises from alleged systemic non-compliance with statutory rest-break entitlements under Australian industrial law within the McDonald’s franchise network. The claims are brought in the context of Australia’s award-based employment system, where minimum conditions of employment are prescribed by legally binding industrial instruments and enforced through the Fair Work Act 2009 (Cth).

McDonald’s Australia operates a franchised business model. While individual franchisees are the direct employers of staff and bear primary responsibility for compliance with workplace laws, the franchisor exercises varying degrees of operational oversight through standardised systems, training frameworks, rostering tools, and brand-wide operational policies.

Procedural History

The Federal Court accepted the class action, which named multiple franchise groups and represented hundreds of restaurants nationwide. Early procedural steps addressed representative standing, aggregation of damages, and McDonald’s operational oversight. McDonald’s Australia denied direct responsibility, contending that franchisees were independent employers. The claimants argued that standardised corporate rostering, training, and management processes contributed to a pattern of non-compliance, creating a nexus of accountability for the franchisor.

In October 2023, the Federal Court dismissed an application by the Shop, Distributive and Allied Employees Association (SDA) seeking to stay the proceedings, confirming that the class action could continue. The dismissal emphasised the Court’s role in safeguarding the procedural rights of employees in large-scale representative proceedings.

Legal Considerations

The central legal questions concerned:

• Whether franchise-level failure to provide lawful rest breaks constituted a breach of the Fair Work Act 2009 (Cth).

• The extent to which McDonald’s Australia could be considered responsible for employment practices implemented by franchisees.

• The procedural and substantive standards applicable in large-scale class actions involving systemic contraventions of industrial awards.

  
  

The case also intersected with established legal principles regarding corporate oversight, franchisor liability, and the statutory protections afforded to employees under the Fair Work Act. A notable procedural aspect involved the potential use of common fund orders (CFOs) to facilitate funding of representative proceedings, a framework clarified in Elliott-Carde v McDonald’s Australia Limited (2023) FCAFC 162.

Court Findings to Date

To date, the Federal Court has allowed the proceedings to continue. No settlement has been publicly reported, and there has been no judicial determination on liability or damages. Procedural rulings have established that McDonald’s Australia may face legal scrutiny for operational influence over franchise employment practices, but the Court has not yet concluded on whether these constitute breaches of the Award or the Fair Work Act.

The Federal Court has confirmed the viability of the class action, reinforcing the capacity of unions and representative organisations to pursue systemic claims affecting large numbers of workers. The dismissal of the SDA’s stay application highlighted the Court’s commitment to maintaining procedural access for affected employees.

Shine Lawyers is still seeking and encouraging those to register who meet the following provisions in the

McDonald’s Breaks Class Action:

Be a current or former McDonald’s employee who has worked shifts of four hours or more:

• In a McDonald’s corporate store between 7 December 2015 and 27 May 2022;

AND/OR

• in a McDonald’s franchised store between 28 May 2016 and 27 May 2022;

AND

• not have been given 10 minute breaks during one or more of these shifts;

AND

• have not claimed in other Court proceedings, whether through an agent or representative or otherwise, the same or similar relief, compensation and remedies sought in this class action.

Practical Implications

The ongoing proceedings have significant implications for both franchisors and franchisees across Australia:

1. Franchisor Accountability: The case underlines the potential for franchisors to be held responsible for systemic non-compliance in franchise operations where corporate procedures, rostering, or training materially contribute to breaches.

2. Employee Protections: The action reinforces the Fair Work Act’s provisions ensuring that employees are entitled to lawful rest breaks, and that representative mechanisms can address widespread non-compliance.

3. Class Action Mechanics: Procedural developments, including the clarification of CFO frameworks, provide guidance on the management, funding, and judicial oversight of large-scale class actions.

4. Compliance Incentives: Even in the absence of a settlement or finding of liability, the ongoing litigation acts as a cautionary example for corporate entities operating through franchise networks, highlighting the importance of robust compliance and monitoring systems.

   
   

Broader Significance

The McDonald’s class action contributes to evolving jurisprudence on franchisor liability and collective employee claims in Australia. It demonstrates the judicial willingness to maintain representative proceedings where operational control by a corporate entity is potentially linked to systemic breaches of industrial awards.

The case also emphasises the role of unions as enforcement actors in instances where government agencies may not intervene, highlighting the strategic and practical importance of union-supported class actions in enforcing statutory entitlements.

Professional Significance

The ongoing McDonald’s proceedings provide insight into several key areas:

• Risk Assessment: Corporate entities must assess operational and procedural exposure when employment management is devolved to franchisees or similar third parties.

• Compliance Oversight: Systems for training, rostering, and policy enforcement must be designed to ensure statutory compliance, even in distributed operations.

• Representative Litigation: The mechanics of class actions, including CFOs and procedural safeguards, are critical considerations for both plaintiffs and defendants in high-volume claims.

• Policy and Governance: The case underscores the importance of integrating corporate governance, compliance culture, and employee rights protections into operational decision-making.

  
  

Conclusion

The McDonald’s Australia class action remains a live Federal Court proceeding. While no settlement has been publicly recorded, the case continues to shape the legal landscape regarding franchisor accountability, employee entitlements under the Fair Work Act, and procedural standards for large-scale representative claims.