Domino’s Pizza shares have fallen to a four-year low after Australia’s largest pizza chain was hit with a class action claim from delivery drivers and pizza store staff who allege they were underpaid over a period of almost five years.
The class action claim was filed in the Federal Court on Monday by law firm Phi Finney McDonald and served on Domino’s on Tuesday.
The claim was filed on behalf of staff employed by Domino’s franchisees as delivery drivers or in-store workers between June 24, 2013, and January 23, 2018.
The statement of claim alleges Domino’s misled its franchisees by advising them to pay delivery drivers and in-store workers under a series of incorrect employment agreements when they should have been paid under the Fast Food Industry Award 2010.
The agreements did not include certain entitlements, such as 25 per cent loading for casual workers, additional penalty rates for working after-hours, on weekends and on public holidays, and a laundry allowance to assist with uniform cleaning.
The award also provided for a different and in some cases better allowance for deliveries per shift as well as minimum three-hour shifts. As a result, most in-store workers and delivery drivers were allegedly underpaid.
The claim alleges that workers are owed the difference between what they received and the amount they should have been paid.
“If delivery drivers and in-store workers had been properly paid under the Fast Food Industry Award, they would have received these entitlements,” Phi Finney McDonald said.
The firm is urging people who worked at a Domino’s store during the nearly five-year period to register their interest in the class action.
Domino’s said on Tuesday it would defend the action. Domino’s shares fell 7.2 per cent to a five-year low of $36.30.
“Domino’s is of the view that those industrial agreements applied to its franchisees at all relevant times,” the company said. “Domino’s takes the proper payment of its team members seriously.”
About 90 per cent of Domino’s Australian stores are owned by franchisees, whose labour costs have risen significantly since they switched to the award in 2018.
Domino’s has attempted to help franchisees offset higher labour costs by putting GPS trackers on drivers to increase productivity, introducing delivery guarantees that have been used to lift prices, and introducing new higher-priced menu items and rostering systems.
The class action claim is being funded by Therium Litigation Finance, which will pay the legal fees of Phi Finney McDonald and other expenses.