Restaurant Brands International Inc. | Competitive Employment Standards, Including Wages and Benefits

AGM date
Resolution details
Company ticker
Resolution ask
Report on or disclose
ESG theme
  • Social
ESG sub-theme
  • Labour standards
Company sector
Consumer Discretionary
Company HQ country
Resolved clause
That shareholders of Restaurant Brands International (RBI) ask the board of directors to analyze and report on how its business strategy will be resilient in the face of increasing labour market pressure while sustaining shareholders’ financial return and long-term value. The report should, at minimum, (1) explain how the Company’s strategy, programs and incentives enable franchisees to adopt competitive employment standards, including wages and benefits and (2) demonstrate the effectiveness of its strategy through the disclosure of aggregated human capital performance indicators and information.
Supporting statement
As countries recover from the Covid-19 pandemic, Canada and America’s labour-force participation rates remain particularly low. In 2021, national statistics agencies recorded historic numbers of job vacancies—in October, that number reached 11 million in the U.S. and exceeded 1 million in November in Canada. Research shows that quits are at a record high as workers have more confidence in their job prospects and transition from unemployment to employment has been particularly low. This phenomenon is often referred as the Great Resignation. A study from the bank RBC anticipates labour shortages to become even more extensive in the future. However, experts say that employment conditions, including low wages and benefits, are key factors driving the increase of job vacancies. A report from Mercer reveals that frontline workers, low wage, minority and lower-level employees are more likely to be looking to leave—at rates significantly higher than historical norms. Accommodation and food services are the sectors recording the largest increase of job openings. This trend is particularly concerning as the average turnover rate in the fast food industry has reached 150% in the U.S. The retention challenges the sector faces may adversely impact customer satisfaction, operational efficiency and restaurant profitability. Research indicates a high employee turnover rate may increase labour expenses as it can cost an employer approximately one-third the amount of an employee’s yearly earnings just to replace a lost worker. RBI has a recruitment and retention probelm. Company emails leaked to the press in November 2021 revealed that several Tim Hortons restaurants are facing a hiring crisis. Jose Cil, CEO of the Company acknowledged that attracting and retaining great talent for its restaurants represent a big priority for […] franchisees all around North America. However, in contrast with many employers that decided to improve wages and benefits to attract and retain a skilled workforce, RBI has not explained how its business strategy enables franchisors to compete effectively in a constricted labour market. Franchisors’ inability to establish competitive working conditions and successfully attract and retain an operational workforce may threaten their ability to achieve their productivity goals and financial objectives, and negatively impact shareholders’ long-term value. Therefore, it is critical for shareholders to understand how RBI intends to support franchisors – which operate 95% of the Company’s branded operations – in navigating the uncertainties of the shifting labour market through the adoption of competitive employment standards, including wages and benefits.