Big-name company does away with zero hours contracts

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Restaurant Brands – the owner of KFC, Pizza Hut, Carl's Junior and Starbucks in New Zealand – has agreed to put an end to its use of zero hours contracts.

Russel Creedy, Restaurant Brands’ chief executive, told Radio New Zealand yesterday about the motivation behind the change.

“Having permanent staff who stay with us, loyal, long tenure, is part of a successful business model for our industry,” he explained.

Creedy added that although the company had zero hours contracts in place, they had never really been practised.

“It's no secret that in our industry we employ a fair number of students, and unfortunately all the universities have student exams at the same time,” he said. “So there's generally a bit of an exodus of hours worked around exam times and that is problematic for us, because the students are not always available. So getting greater security for availability is important and valuable to us.”

The collective agreement between Restaurant Brands and Unite Union – which represents around 2000 workers in New Zealand’s fast food industry – will take effect in July, and will cover workers regardless of whether they are union members. 

Although the company undergoes annual negotiations with the union, Creedy said that this is the first year that guaranteed hours have “hit the list”.

According to Creedy, the ‘always on call’ nature of zero hours contracts is not beneficial for business due to varying competency levels.

“We spend a lot of money on training,” he told Radio New Zealand. “Staff go through intensive training courses, but it really takes up to a year for them to become competent in several jobs in the restaurants.”

He added that because of this, having permanent staff is a part of a successful business model in the industry.

Creedy referred to the decision as a “no-brainer”, saying that he “didn’t agree with zero hours contracts anyway”.

"This is a gigantic step forward for workers in the fast food industry" said Unite Union's national director, Mike Treen.

Treen said Restaurant Brands will end zero hours contracts by July - now he wants McDonald's, Burger King and Wendy's to follow suit.

He added that the union is hoping other fast food giants including McDonald’s, Burger King and Wendy’s will follow suit. 
  • Bruce on 17/04/2015 1:41:04 p.m.

    Well, like a good many of us, Mr Creedy would seek an economic advantage where he thought there was one to be had, and for as long as it were tolerated by the workforce (who are relatively disempowered) and broader society. None of us like backing down from a position, as a negotiator, letting someone minimise bad press fro the sake of hundreds of workers' wellbeing is what is known as a victory :-)

  • GB on 14/04/2015 12:07:18 p.m.

    Mr Creedy has some interesting banter and is endeavouring to make himself look good by giving rationales for loosing zero hours contracts. He even says he doesn't agree with them.
    What intrigues me then, is, given the solid rationales for loosing zero hours contracts, what were the overwhelming rationales and motivations for having them in the first place.

    Or simply is bad press sufficient per se to change a major staff retention tool?

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