A McDonald’s franchisee has been removed from his four Auckland restaurants after it was revealed he was requiring some staff to sign a letter making them liable for $3000 if they left.
The fast-food giant was notified of Prakash Hira’s conduct earlier this month about workers receiving ‘commitment to employment’ letters to cover hiring, onboarding, training, and “several administrative” costs.
According to Unite union who represents workers at McDonald’s branches, the letter has been sent since 2019 and while it is unknown how many people were asked to sign these letters, a McDonald’s spokesperson said they were aware of ‘a handful’ of people.
Hira was stood down from operating the stores when McDonald's became aware of the "unapproved policy” earlier this month, a McDonald's spokesperson said. The company explained it had decided to remove Hira from its system after concluding its investigation and will continue operational management of the restaurants while it implements next steps.
The decision to remove Hira from its franchise system has been welcomed by Unite Union national director Mike Treen, however, he noted that franchise models expose workers to exploitation, as terms set by franchisees that may be unlawful are ignored until publicly criticised. Treen said the union would seek compensation for members who have paid Hira money promising to stay in employment.