Crust Pizza drivers ‘paid $5 per delivery’

GOURMET pizza chain Crust has been accused of exploiting young workers by paying them less one third of the legal minimum wage.

Fair Work has recovered nearly $70,000 for Crust employees since 2010.

CRUST Pizza has been accused of exploiting young workers by paying them less one third of the legal minimum wage.

Instead of an hourly rate, delivery drivers at one NSW franchise are paid on a per-delivery basis, missing out on penalty rates, superannuation and casual loading, in breach of federal workplace laws.

According to one employee, who did not want to be named for fear of losing his job, drivers at the store were paid $5 per delivery and required to pay for all their own fuel costs.

“On a busy night I make $100 because I’ll do 20 deliveries, on a quiet night maybe $50,” he said. While he might make up to $400 per week, the man in his early 20s said he can spend up to half of that on fuel.

Under the fast food industry award, the minimum wage is $738.80 per week.

“I’ve told them I spend a lot of money on fuel, I tell them it’s hard to pay for fuel, but I just get mucked around. I don’t feel comfortable asking for more money,” he said.

The young man said drivers were pressured into accepting cash-in-hand payment for fear of losing work, saying other drivers who had opted for an hourly rate had lost shifts as a result.

“If I was getting enough shifts I would want to be paid [an hourly rate],” he said. “I do a lot of work in the store anyway, I answer phones and everything.”

The driver, who has been working at Crust for more than two years, said he didn’t want to cause trouble because it was hard to find work in his area.

“My boss at one point asked if I wanted to get paid per delivery or per hour but he said [if you get paid per hour] you’d be paying tax, which I was a bit worried about because I’ve never paid tax before,” he said.

“This is my first proper job. I’m finding it difficult to find work at the moment so I just kind of go with it. This is the best work I’ve managed to find. I’m looking for other work so I can get out of fast-food. Anything, really — Coles, Woolworths.”

The pizza chain, part of Retail Food Group, has previously been in trouble with the Fair Work Ombusdman for underpaying employees.

A spokesman for the FWO said the agency had received 53 requests for assistance from Crust Pizza employees since 2010, and had recovered a total of $69,208 in underpayments for 15 workers in that time.

In 2015, the former owner-operator of one NSW outlet was fined $3825 for refusing to reimburse eight employees who were underpaid almost $26,000.

Last year, two former long-term workers in the ACT told The Canberra Times underpayments were “widespread” as the cash model was structured into the franchisees’ business.

A spokeswoman for Crust parent company Retail Food Group said the company had “no insight into the particular circumstances you have mentioned, and therefore cannot comment in respect of them”.

But she said pay rates applicable to Crust team members, including delivery drivers, would “vary dependent upon a number of factors” such as whether the employee was casual or fulltime, their age and “timing of hours worked”.

“All franchise partners are obliged to comply with relevant employment laws and industrial awards,” she said. “A failure to do so is not in line with Crust’s values, and we have a zero-tolerance policy for franchise partners who fail to properly discharge their obligations to team members.

“Crust takes all wage complaints seriously, and encourages team members who suspect that they are not being paid in accordance with the relevant award to report their concerns to Crust’s management team.

“All complaints are investigated within 24 hours by our compliance specialist, and to date, the very limited number of matters that have been referred to us have been promptly dealt with to the satisfaction of all parties concerned. We therefore encourage the driver you have been speaking with to contact us so that we might investigate the matter.

“As well, in order to assist our franchise partners in regards to compliance, we provide them with subsidised membership with the National Retail Association as part of our internal franchise partner support program, Foundations.

“This membership includes access to the NRA’s workplace advice line and an online portal where franchise partners can access documents, forms and industry research. It also provides franchise partners with access to a range of NRA-accredited training programs and opportunities.”

But Giri Sivaraman, principal at Maurice Blackburn lawyers, said a take-home pay of $200 per week for a fast-food worker was “shocking”.

“On top of that, bear in mind that [delivery] is actually dangerous work,” he said. “You’re at a much higher risk if you’re constantly on the road, you have to deliver to people’s houses, you have to pay for your own insurance, and if you have an accident you’re stuffed.”

Mr Sivaraman said there seemed to be a “real problem” with the franchise model. “Where head office isn’t involved or actively policing and ensuring correct pay, there is a lot of scope for rogue franchisees to underpay workers or cut corners,” he said.

“What we really need is some kind of legislative change which puts the head franchisor on the hook for underpayments of franchisees.”

Mr Sivaraman said fast-food delivery drivers were often vulnerable to sham contracting arrangements, where employers attempt to disguise employees as “independent contractors”, usually to avoid paying legal entitlements.

“Sham contracts are a well-oiled tool for companies to avoid labour law regulations,” he said. “There is nothing genuine about these contracts, they’re just an artifice used to avoid award rates and pay incredibly low amounts to drivers.

“Every time you shine a light into a new industry or employer, you seem to expose more wage theft. Really if just means wage theft and worker exploitation is a burning issue in Australian society.”

The FWO spokesman said the agency had “no current matters involving allegations of sham contracting at Crust Pizza outlets”. “A check of our records shows one incident of sham contracting and that was resolved in May 2015 with a total $1707 in unpaid wages being made,” he said.

“Any worker who considers they are being underpaid or their employer is not meeting their workplace obligations should be encouraged to contact the Fair Work Ombudsman Infoline on 13 13 94.”

Last week, the FWO released the results of a sweeping audit of Pizza Hut stores, which uncovered “widespread” exploitation of young delivery drivers, including underpayment and sham contracting arrangements.

Franchise operators were found to be underpaying staff had paid their workers on a per-delivery basis at rates ranging between $5.70 and $8.

Last year, private equity fund Chester Moynihan bought the Pizza Hut master franchise from US-based Yum! Brands, subsequently snapping up 50 of 100 the failed Eagle Boys stores, bringing its store network to around 320, making it the nation’s second-largest pizza chain behind market-leader Domino’s which has more than 600 outlets.

Crust Gourmet Pizza has 140 outlets across Australia, New Zealand, Singapore and the US and has a 4 per cent market share in Australia, according to IBISWorld.

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