Domino’s hits back at claims of systematic exploitation

DOMINO’S has denied that its business model is built on exploitation, blaming a few bad eggs for the alleged underpayment of workers.

Domino’s chief executive Don Meij says there is “no excuse” for underpaying staff. Picture: Dan Peled

DOMINO’S has hit back at claims its business model is built on exploitation, blaming a few bad eggs for underpayment exposed in media reports.

The company, which is Australia’s biggest pizza chain, defended its franchise model and said it took a “zero tolerance” approach to wage breaches.

“Domino’s has found no evidence of a link between franchisee profitability and breaches of employment obligations,” the company said in a statement, following a Fairfax Media expose alleging widespread underpayment of wages, the deliberate underpayment of penalties using a delivery scam and the illegal sale of sponsorships of migrants for as much as $150,000.

Franchisees claimed to have no choice but to underpay workers if they wanted to make a profit, and instructed store manager to keep labour costs below 27 per cent of sales “by any means”, the report alleged.

But Domino’s chief executive Don Meij hit back at the allegations, saying a statement that the company took a hard line on underpayment and had terminated the franchise agreements of four franchisees operating seven stores for doing so in the past three years.

“There is no reason, and no excuse, for any Domino’s franchise to not pay their employees correctly,” Mr Meij told The Australian.

“This unethical behaviour does not discriminate based on earnings and is, in our opinion, driven by greed at the expense of employees.”

Running a Domino’s store in full compliance with employment obligations “has never been more profitable or rewarding than it is now,” he said, expressing disappointment that “the actions of the very few tarnish the great work of so many.”

He said 97 per cent of Domino’s franchises were profitable after expenses including wages and that in the past two years, average franchise profitability had risen 31.7 per cent to $137,000.

The company said in a statement that the number of unprofitable franchises was declining and had hit 21 stores in the last financial year, out of about 714.

“Domino’s works closely with franchisees in relation to marketing, training, technology and administrative support to provide them with the best opportunity for profitability and success,” the statement said.

“There is no reason, no excuse, and no tolerance for any Domino’s franchise that chooses not to pay its employees correctly or fails to meet expectations around ethics and governance.”

The company promised to investigate claims of visa fraud.

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