KFC and its franchisees have agreed to pay $28.8 million to settle a class action brought by current and former employees.
A class action is a type of lawsuit where many people are represented by one entity.
The employees alleged KFC refused to grant their legally entitled paid breaks.
The settlement covers more than 80 franchise operators and over 700 KFC stores across Australia.
It is still subject to approval by the Federal Court.
Rest breaks
KFC employees are entitled to a ten minute paid rest break for every shift of four hours or more.
For shifts longer than nine hours, they are owed two paid rest breaks.
These rights are set out in KFC’s National Enterprise Agreement, approved by the Fair Work Commission.
A breach of the agreement can result in legal action and fines for the employer.
Class action
The class action was filed in the Federal Court in October 2023 by law firm Gordon Legal, backed by the SDA (one of the unions for retail and fast food workers).
A separate class action ran at the same time, led by Shine Lawyers and the Retail and Fast Food Workers Union (RAFFWU).
The employees alleged KFC and its franchisees consistently failed to provide paid 10-minute rest breaks, breaching their agreement and the Fair Work Act.
Around 90% of affected workers were estimated to have been under 24 at the time.
Shine Lawyers said many were young people who “would not have had the confidence or knowledge to speak up and demand the breaks they were owed.”
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Gordon Legal’s lead applicant Roshanpal Singh said the case was about more than money.
“Those rest breaks weren’t a luxury, they were something we were legally owed,” he said.
Settlement
Earlier this year, the parties agreed to settle without going to trial.
KFC and its franchisees have now confirmed they will pay $28.8 million in total, covering both class actions.
The Federal Court is expected to approve the settlement at a hearing in April.
Then, a registration period will begin where workers can sign up to receive compensation.
You are eligible if, between October 2017 and December 2023, you:
- worked at a KFC
- for at least one shift of four hours or more, and
- were not given a paid 10-minute rest break on some or all of those shifts
The exact payout will depend on how many people register for compensation.
Other cases
The SDA is also calling on McDonald’s, which it says is in a “similar position,” to settle a class action from its current and former employees who were allegedly denied paid rest breaks.
Gordon Legal has also launched a separate class action on behalf of more than 15,000 past and present employees of burger chain Grill’d over the same issue.
Gordon Legal Senior Associate Guy Tiffany says the KFC settlement sends “a powerful message to fast food giants and other employers of inexperienced workers.“
