Shareholders ask Tim Hortons and Burger King parent company to serve up decent work practice reporting

By June 25, 2019News

After engagement by the Atkinson Foundation and SHARE, 66.5% of Restaurant Brand International independent shareholders supported a proposal asking for disclosure on workforce management

Shareholders have made a strong statement to the world’s fifth-largest fast food company: good workforce management is a good investment.

A shareholder proposal filed at Restaurant Brands International Inc. (RBI) asked directors to report on actions the company is taking to ensure decent work practices are upheld in the company’s nearly 26,000 franchisee operations.

The company is better known by its fast food brands in 100 different countries – Burger King, Tim Hortons and Popeyes Louisiana Kitchen.

At RBI’s annual meeting on June 12, 66.5 percent of independent shareholders voted in support of a proposal asking the company to establish minimum requirements related to workforce practices for the people who interact with customers at its branded restaurants every day.  The proposal was filed by SHARE on behalf of its partner the Atkinson Foundation.

RBI management opposed this proposal and because the company is majority owned by the Brazilian-US multibillion dollar hedge fund 3G Capital, it received only 25.8 percent of votes overall, meaning the proposal did not pass.

However, the fact that it showed such strong support through non-controlled votes demonstrates that for the majority of shareholders, franchisees and their employees are important to the success of RBI and its brands. This is also the first proposal ever filed dealing with the issue of labour standards in “fissured workplaces,” adding to the significance of this vote.

RBI management argues that it is not responsible for the employment practices of its franchisees and that as independent business owners, the franchisees are responsible for handling all employment matters, including all policies for benefits and wages. Clearly the majority of RBI’s independent shareholders do not agree with this sentiment and recognize that there is room for RBI to set minimum requirements and standards as it would do in other aspects of the business.

Atkinson is a Canadian charitable foundation focused on strengthening movements for decent work and a fair economy. It filed this proposal on workplace conditions because of a strong belief that decent work for all is a prerequisite for a healthy economy.

The success of RBI’s brands depends on its hundreds of thousands of employees. As the franchisor, RBI can provide standards and guidance on workforce practices for franchisees to ensure consistent good human capital management across branded locations. It is unclear from RBI’s current disclosure whether and to what extent it does so.

For several years, SHARE has been engaging with RBI management on decent work practices, and the risks of the company’s human capital management are well publicized. In 2018, RBI grappled with unhappy franchise owners and a public-relations debacle over how some franchisees responded to Ontario’s higher minimum wage. This shed light on an important issue that warrants investors’ attention: that RBI is either unable or unwilling to protect a key asset – Tim Hortons’ frontline workers – and by extension to protect the Tim Hortons brand itself.  Is RBI prepared to value its workers as the engine of its successful company, and not just the fuel?

We are going to continue our engagement with RBI management on this pressing issue for the long term value to investors, for the hundreds of thousands of employees working under the company’s brands, and for building a sustainable, inclusive and productive economy.