Former store managers at fast food chain KFC say they were told to manipulate rosters in the lead up to public holidays so the company could avoid giving staff a day in lieu.

Checkpoint with John Campbell has spoken to five former store managers who say they were sent an excel spreadsheet unofficially called a 'yellow list' in the weeks before public holidays.

The managers say employees who needed their shifts changed, stopping them from being entitled to a day in lieu, were highlighted in yellow.

They say yellow lists were sent by either their area manager, or payroll at KFC head office, and were to "control labour costs".

A former area manager who spoke to Checkpoint on the condition of anonymity said she was told to distribute yellow lists to store managers by her regional manager, and remembers them being used as far back as 2004.

Mike Treen, President of Unite Union which represents fast food workers across New Zealand, also said he remembers first hearing about yellow lists around 2004, "right from the beginning when we were first negotiating with [Restaurant Brands]".

Restaurant Brands owns KFC, Pizza Hut, Starbucks and Carl's Jr, and its chief executive since 2007, Russel Creedy, said he had never seen or heard of a yellow list being used at KFC.

He said Restaurant Brands does not have a policy of trying to avoid paying staff days in lieu, but store managers are "required to minimise costs, manage costs effectively, at the time of drawing up a roster".

Mr Treen said he had not heard of yellow lists being used for several years - not since around the time zero-hours contracts began being scrapped in 2015.

But the allegations come at the same time as a government investigation into Restaurant Brands and whether it's been giving staff their public holiday entitlements.

It's not known whether that investigation relates to yellow lists.

Photo: RNZ / Diego Opatowski

The Ministry of Business Innovation and Employment said it has "concerns employees within Restaurant Brands have not received their minimum employment entitlements" but "as this work is ongoing, we cannot provide more information at this time".

Mr Creedy also declined to comment on the investigation.

"Not answering you on this okay, you're not getting an answer, it's work in progress, that's the end of it," he said.

Andrea Melville, who worked at KFC for 17 years - she left in 2015 - said yellow lists were simple.

"Anyone who worked three consecutive days, we had to change the roster so that person didn't work the fourth one, so they didn't get paid if we rostered them off on the public holiday."

Using Christmas Day 2017 as an example, employees at KFC on a flexible roster would be entitled to a day in lieu if they worked three of the four Mondays leading up to it - 27 November and 4, 11 and 18 December.

But if they are not rostered to work on three of those four Mondays, even if they worked every other Monday this year, KFC would not give them a day in lieu because it would then no longer consider Monday to be their "working day".

The Holidays Act states an employee is only entitled to a day in lieu if "the public holiday falls on a day that would otherwise be a working day".

Other fast food chains like McDonald's, Burger King, Dominos, and Wendy's use similar tests to work out what constitutes an "otherwise working day".

Ms Melville said she was praised if she followed a yellow list, but criticised in front of other store managers if she did not.

An email sent to her and other store managers in 2011 by a manager at KFC that Checkpoint has chosen not to name, reads:

"Well done team.... Papatoetoe, East, Manukau, Central, Papakura and Manurewa all with NO STAFF PAID FOR NO WORK ON MONDAY Auckland Anniversary!! You smart cookies!!"

Ms Melville said she understood that to be a congratulatory email, after store managers in those areas manipulated their rosters in the lead-up to Auckland Anniversary Day resulting in no staff paid a day in lieu.

Mr Creedy said he disagreed.

"Well yep I mean 2011 is a pretty long time ago, and we understood that the way rosters were created, the way [days in lieu] were handled, was understood and agreed with the union and all employees at the time.

"So under ... the rules or the way the collective worked at that stage, a store manager was able to roster people to ensure minimum costs, most effective use."

He said the company has since moved to a fixed-shift model, and one of the reasons it did so was to remove the possibly for rosters to be manipulated.

The manager who sent the "smart cookies" email to Ms Melville and other store managers still works at KFC.

Checkpoint tried to contact them but they did not return calls.

The Ministry of Business Innovation and Employment was not able to say when it would conclude its investigation.

The Employment Relations Authority last month ordered fast food chain Wendy's to review all public holidays worked by all staff across all 23 stores since 1 July 2012, determining its day-in-lieu entitlement test illegal.

The ERA ordered Wendy's to consider the circumstances of each employee on a case-by-case basis.

"An individual employee approach is simply part of the price Wendy's pays for the benefit of the convenience it gains by using variable rosters," the ruling said.

Wendy's chief executive Danielle Lendich said the company may appeal.