The fast food industry is expanding globally over the years despite of downturns in national economies. Due to the rapid growth and success of the service, issues such as workers’ right, pay levels and conditions of work are often questioned. While fast food industries has expanded globally and become multinational corporations (MNCs),to what extent they are able to impose common employment practices on diverse national systems of labor legislations? (Royle, Towers 2002) This essay shall discuss about the similarities and differences between work and employment relations in the fast food industries.
The country that will be discussed is Singapore, Germany and the United States. The discussion shall first begin with information about the fast food industry after which, I shall explore the similarities and also the differences between the work and employment relations of the three countries. Last but not least, I will discuss about the reasons of the similarities and the differences that occur. The fast food industries first originated from the United States. Fast food can include service with or without plates and be consumed inside or outside the business, has limited menus, limited service, and standardization .
Meals are selected by customers from a short list of offerings followed by placing orders at a counter (Leidner,2002). Food is served in a very fast speed: on a tray for dining in, or packaged to take elsewhere. People who are in a hurry and want to have inexpensive meals are the targeted market for this industry. In fact, the industry emphasizes on convenience. The limited offerings and the standardization has permit the use of low skilled and easily replaceable labour. Lobbying the government to introduce lower rates of pay for young workers and demanding for more ‘flexibility’ is in the vanguard of fast-food companies. Royle,2000; Vidal,1997). It is often said that fast-food industries has contributed the growth of part-time, insecure and low paid employment and most of all stopping the access of trade unions to their industry.
I will be using MNCs such as MacDonald’s in this essay because McDonald’s is the market leader in fast-food industry. According to Pereira (2002) ,the suppression of trade union opposition would be rationalized by corporatist government for the sake of industrial peace back hen, being afraid that politicized trade unions will destabilize political regimes or make economically damaging wage demands. However, in order to attract multinational corporations to locate in Singapore, the government introduced the Employment Act and amendments were made to the Industrial Relations Act. The Industrial Relations Act gave more ‘power’ to the employer by excluding issues such as promotion, transfer, retirement, retrenchment, dismissal and work assignment, leaving them to be negotiated between employers and employees. (Pereira,2002) .
The new National Trade Union Congress (NTUC) were also formed in 1961,one of its role is to review the guidelines for wage changes in the country. However, the most important state measure introduced was giving the workers right to choose whether they want to join a union or not, causing important ramifications for McDonald’s Restaurants’ own employee relations. While in Germany , German union generally appear to have high acceptance amongst the German workforce and German employers. McDonald’s has refused to cooperate in the beginning.
Between 1979 and 1990, restaurant managers were mainly secondary school leavers and the crews usually had low levels of educational qualifications while the headquarters teams took in experienced and highly qualified person. Unlike Germany, Singapore’s crews are made up of part-timers, youth who were still in full-time education. Germany which have very low labour turnover because large proportion of fast food workforces are made up of ethnics minorities and economic migrants who are unable to find other jobs.
They were mostly older workers and some even with high qualifications, they tend to work full time and stay in the job longer comparing to youth in Singapore that will leave the job once they graduated from the school in order to find a better job with higher pay or when they are being enlisted to the National Service. Trade unions are indeed important for Germans in order to protect their rights , moreover, why they do not need to endure with the poor working conditions and low pay just because they aren’t any job available for them in the country?
A lot of benefits are provided to the crews in McDonald’s Singapore, they are entitled with annual pay bonuses, in-house medical benefits and their starting salaries are slightly higher than the ‘market rate’. They are provided with air-conditioned working environment and meals are provided by the restaurant. McDonald’s are able to carry out its own HRM programme in Singapore fostering corporate values and discouraging employee resistance and avoiding imposition of collective negotiations and bargaining because the worker has right to either join a trade union or not. (Pereira ,2002).
The ‘Recruitment and Retention’ and the implementation of the company’s disciplinary system for instance is a very successful HRM programme. McAunties and McUncles started when McDonald’s recruit retirees or housewives that are unwilling to commit in a full-time job yet wanting to fully utilize their time. Since then, alterations are made to the employment relations. All these older crews are able to choose their preferred working hours and the restaurant managers became more patient and willing to help these older employees to cope with the training modules. (Pereira, 2002).
Overall the global model of employee relations was maintained in Singapore and Germany. Over the years, McDonald’s in Singapore appear to have improvement in the terms and conditions and working conditions. When McDonald’s first settled down in Germany, they appear as a company that is anti-union. Employees that came to interview were turned down by them once the employee showed interest in unions. This eventually caused a lot of critics on McDonald’s public image. An employee federation was then established by McDonald’s in order to begin negotiations with the NGG for a collective agreement.
After 4 years, the first collective agreement finally came to effect, the collective agreement has also led to a change in the corporation’s official policy towards unions. However many claimed that the involvement of McDonald’s in BdS were only a form of ‘communication’ to improve public image, work councils are not carried out in the franchises. Some improvements have been achieved in the context of pay and working conditions have slightly improved after the collective agreements negotiated.
McDonald’s have captured company-level work council so far but the amount of work council is too small, this means that there is little effective monitoring of working conditions at restaurant level. Although the legislation is important for the worker’s right, it still depend on the willingness of employer to bargain in ‘good faith’. The meaning of the legislations can be turned into vice-versa by employers, according to their own advantages. (Royle,2002) United States is the root of the fast food industry that has extended globally throughout the years.
By expanding their business throughout the world, they have sought to implement not only food, styles of eating and forms of sociability developed for the American market, but also American patterns of employee relations and working conditions in new context. (Leidner ,2002) Unionization does not exist in the United States McDonald’s unlike Singapore that the employees have right to choose whether to be a member or the union. The fast food industry in United States relies on low-paid, part time workers whose jobs are highly standardized. All of these aspects has causes very high rates of labour turnover making unionizations impossible.
Fast food employer have difficulties finding and retaining workers due to the tight labour markets this few years. Managers in the United States can make decisions and establish policies with minimal intervention by federal and state government due to the extremely low rates of unionization. ‘Employment-at-will’ is the legal principle governing employment relations in most circumstances and by agreeing to other employment terms such as signing a union contract or by issuing an employee handbook that specifies a ‘just cause’ for discharge standard, employers may forfeit the power to dismiss workers at will. Leidner 2002). By keeping labour and other operating cost down , the fast-food industry will be able to make profits. Therefore, problems such as low wages, minimal benefits, tight staffing are unavoidable(Leidner 2002). All of these problems however did not lead to unionization in the fast food industry in United States. First of all, employees are hired by franchisees and not the companies itself. The decentralization greatly increases the difficulty of organizing unions. Secondly issue is that the high labour turnover in this industry.
This is the differences between Singapore and United State McDonald’s. Studies have shown that nearly 70per cent of the workers in United States are youngsters while in Singapore we have the McAunties and the McUncles. The youngsters have no knowledge of unions and they have low expectations of wages and benefits. The old workers in Singapore are mostly part-timers too however, they are more exposed to what union is. Moreover, Unions emphasize on seniority rights which youngsters did not bother about. When most of the workers are made up of part-timers, it is difficult to gather all the crews together.
Contracts made between franchisees and the company require the owner to meet company specifications by following wide range of company procedures. Training programmes are produced by the corporate for the crew and the managers either in Singapore or United States. The part time employees in United States McDonald’s were not given fringe benefits, unlike Singapore crew that are given seven days of paid annual leave, in-house medical benefits. They are also entitled to annual pay bonuses. United States workers are only given discounted meals in the restaurants but Singapore’s crew are given free meals every day.
When talk about benefits in United States, trainers speak of crew meetings, work-evaluation sessions and incentive systems offering prizes for good work. (Leidner 2002) Other than that, part-timers in United States are not guaranteed a specific number of hours of work per week. In Singapore, part time crew could work for as little as 4hours a week up to a maximum of 40 hours a week. (Pereira, 2002) They get to choose their preferred working hours too. Fast food employment is also seen as first work experience for teenagers who are unskilled, because the task given is simple and no experience is needed.
On the other hand, youngsters did not have the intention to stay in the fast food industry for a long period, once they are graduated they are qualified to get jobs with higher pay and better working conditions. Unionized can never be possible because the working span of a crew in fast food industry is too short. McDonald’s in Singapore and United States both maintain the global employment relations model. Although McDonald was originated from the United States, over the years it has been expanded globally .
No matter with or without interference of unions, McDonald’s has implemented its employment relations. This can be done because of the franchise system. (Royle,Towers 2002) McDonald’s as the franchisor ,not only supplies the product, but also lays down precisely the rules and the procedures that have to be followed by the franchisees. This is just like purchasing a ‘blueprint’ of the company itself. McDonald has become the market leader no matter in countries which is mandatory of trade union or not and a careful selection of training of management helps to maintain a strong corporate culture.
