Business

Domino's Pizza hit by class action lawsuit

A lawsuit will accuse Domino's Pizza Enterprises and its franchises of underpaying workers. (AAP)

A class action lawsuit paid for by a London-based litigation funding giant alleges that Domino's Pizza franchises systemically underpaid workers for years.

Domino's Pizza Enterprises has been hit by a class action lawsuit that claims the Australian pizza giant and its franchises systemically underpaid workers for five years.

Law firm Phi Finney McDonald alleges that most delivery and in-store Domino's workers were paid less than they should have from June 24, 2013 through January 24, 2018.

"The class action alleges that Domino's improperly told its Australian franchisees to pay delivery drivers and in-store workers under the inapplicable employment agreements," said Phi Finney McDonald on a website devoted to the class action.

Domino's told its franchises to pay workers according to an enterprise agreement rather than the fast food pay scale determined by the Fair Work Commission, a practice the pizza giant says it stands by.

"Domino's is of the view that those industrial agreements applied to its franchisees at all relevant times," Domino's said on Tuesday.

The union representing fast food workers, the SDA, does list on its website a Domino's enterprise agreement - approved by Fair Work Australia - but the effective dates were from June 4, 2010 until June 3, 2013.

The SDA has been approached for comment on whether there was an extension in place through to early 2018.

Phi Finney McDonald said that underpayments involved casual workers not being paid a 25 per cent loading bonus and workers not receiving penalty rates for working after-hours, on weekends or on public hours.

Also, workers didn't receive three-hour minimum shifts or laundry allowances.

The agreement on the SDA website does include double-time for public holiday work but the casual loading rates are 21 to 23 per cent rather than 25 per cent.

"We think based on our calculations this potentially effects tens of thousands of Domino's workers, past and present, between the period of 2013 and 2018," Phi Finney McDonald principal lawyer Brett Spiegel told AAP.

"We believe that for many workers we're talking thousands of dollars and for some workers it will be more than that," Mr Spiegel said.

The Retail and Fast Food Workers' Union said it discovered that workers were being underpaid after a "detailed forensic investigation".

"The scale of Domino's misconduct is unprecedented," RAFFWU secretary Josh Cullinan said.

"Domino's CEO Don Meij took home a multi-million dollar pay packet every year, while drivers and store employees never saw a lot of the money they earned."

Riley Gall, a former delivery driver at two Domino's franchises, is leading the class action on behalf of other employees.

Global litigation funding provider Therium Litigation Finance is funding the lawsuit.

It has previously funded Australian class action lawsuits against Commonwealth Bank, Spotless Holdings and GetSwift.

The London-based company is one of the world's largest litigation funders, paying for litigation in return for a slice of any successful returns.

Domino's Pizza Enterprises said it was served with the class action in Federal Court on Tuesday and that it would defend the proceeding.

Domino's had already said its view is that workers' pay and conditions should have been determined by the industrial agreements, rather than the Fast Food Industry Award 2010.

"Domino's takes the proper payment of its team members seriously. Any formal proceedings received will be reviewed and actioned in the ordinary course," the company said.

A parliamentary inquiry this year called for an overhaul of Australia's franchising system to be overhauled, prompted by allegations of misconduct by Domino's, 7-Eleven, Pizza Hut, Caltex and Retail Food Group.

At 1425 AEST, Domino's Pizza Enterprises shares were down $1.91, or 4.96 per cent, to $37.19.

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