McDonald's told to pay overtime to manager

McDonald's Co. (Japan) on Monday was ordered to pay 7.5 million yen to a branch manager who had often worked more than 100 hours of overtime a month without being paid.

In a landmark ruling, the Tokyo District Court agreed with the argument of Hiroshi Takano, 46, that the fast-food giant's policy of making outlet managers ineligible for overtime pay violates the Labor Standards Law.

The court said Takano should not be viewed as a legally defined manager because he had almost no influence on decisions concerning the menu, operating hours or work force recruitment.

Judge Iwao Saito said the position of Takano is not "tantamount to a managerial post."

Takano is the manager of a McDonald's outlet in Kumagaya, Saitama Prefecture.

An official of McDonald's said the company is considering appealing the ruling to a higher court.

Monday's ruling will likely have an impact not only on McDonald's, which has about 1,700 managers for its directly run outlets nationwide, but also on Japan's food-service and retailing industries.

Many outlet managers at these companies work long hours without being paid for overtime.

The Labor Standards Law stipulates that an employer is not obliged to make overtime payments to those in managerial and supervisory positions.

Monday's ruling was the first on this stipulation concerning an outlet manager working at major food-service chain.

Takano filed the lawsuit in December 2005, seeking around 11 million yen, including 7.85 million yen in unpaid overtime over two years.

The ruling said managers and supervisors under the Labor Standards Law should be given important job responsibilities, decision-making authority and relevant wages.

At McDonald's, however, annual salaries of store managers could be even less than those of their subordinates, depending on the company's personnel assessment.

After the ruling, Takano said McDonald's should address the long working hours of its employees, including store managers, if the company wants to fulfill its service policy to customers.

"The company should shoulder full responsibility for the working hours (of its employees)," he said.

Takano joined McDonald's in 1987 and started working long hours in 2004 after he became manager of an outlet that had no other regular full-time workers under the company's cost-cutting policy.

He clocked in around 5 a.m., and his overtime hours totaled up to 137 hours a month, Takano said.

The hard work caused Takano to suffer a minor stroke in April 2005, prompting him to sue his company, he said.

According to judicial precedents and the government's guidelines in 1988, managers and supervisors under the Labor Standards Law should be entitled to strong discretion over labor management, flexible hours and commensurate salaries and benefits.

Serious cases of overwork and underpayment of restaurant managers have been highlighted in recent years. An increasing number of managers have formed or joined unions to jointly negotiate with management since 2005.(IHT/Asahi: January 29,2008)