Only four Domino’s Pizza stores “fully complied” with workplace laws, following an investigation by the Fair Work Ombudsman into 33 of its stores across Sydney, Melbourne, Brisbane and Adelaide.
Newly-appointed ombudsman Sandra Parker said Domino’s head office needs to take action, as its store network continues to have problems complying with workplace legislation.
“The Fair Work Ombudsman has worked with Domino’s head office for several years to try to promote a culture of workplace compliance,” Ms Parker said.
“We expect better from a major network like Domino’s — it should not be up to the Fair Work Ombudsman to find and alert businesses to the systemic issues identified.”
FWO inspectors found that, during a one-month period, 20 out of 874 workers had been underpaid by a total of $1,978.
This was in addition to Domino’s record-keeping breaches, unauthorised deductions and not paying workers delivery allowance, leave entitlements and additional hours worked.
They also issued 17 formal cautions to Domino’s, putting it on notice that further workplace breaches may result in financial penalties.
Many ‘vulnerable’ workers
The investigation also found that the pizza chain employs a large number of vulnerable workers — with three-quarters being under 25 years old, and almost half of them being foreigners on visas.
Furthermore, 65 per cent of the franchisees audited were from non-English speaking backgrounds, and had minimal knowledge or experience of Australian workplace laws.
The ombudsman will continue to monitor Domino’s compliance with the law in the next 12 months.
“This activity will involve unannounced site visits to Domino’s stores to determine whether head office has taken reasonable steps to prevent, detect and address non-compliance within its network,” Ms Parker said.
“We recommend that Domino’s immediately commence a review of the pay and entitlements of all employees across its network, including at both franchisor and franchisee-owned stores.”
It’s not uncommon for large companies like Domino’s and 7-Eleven to point the blame at “a few bad apples”.
Ms Parker has warned that franchisors can now be found legally responsible for any franchisees who exploit vulnerable workers, under new laws introduced last year.
‘One franchisee’ gets most of the blame
Domino’s has been dogged by a number of worker exploitation scandals in recent years.
In a statement, the company said the majority of the underpayments were “administrative errors … for 20 team members across 19 stores over a four-week period”.
It also said the issue affected 19 out of 600 employees, and 97 per cent of employees were correctly paid during the audit period.
“We have been saying for quite some time that there’s no systemic issues across the business, and the results from this investigation, as well as our own nationwide store audit, support this,” said Nick Knight, the head of Domino’s Australian business.
The company’s defence, essentially, was that most of the blame falls to one franchisee. It wrote:
“Specifically, one franchisee with two stores was responsible for over $1,500 of the underpayment.
“The balance occurred across the remaining 17 stores where the average underpayment was under $25 per employee.”
The pizza chain’s underlying profit jumped to a record $136.2 million in the last financial year.
Domino’s boss Don Meij earned $36.8m in the 2016-17 financial year, making him the highest paid chief executive in Australia.