Australia's Domino's Pizza sued for underpaying staff, shares slide

By Shriya Ramakrishnan

(Reuters) - Australia's Domino's Pizza Enterprises was hit on Tuesday by a class-action lawsuit over employee underpayment which the fast-food chain said it would defend itself against, but its shares fell more than 6% to a four-year low.

The suit, filed by law firm Phi Finney McDonald in the Federal Court of Australia, alleges that Domino's misled franchisees by telling them not to pay delivery drivers and in-store workers wages as per industry standards.

According to the Australian Fair Work Commission, fast food employees are entitled to a minimum weekly wage of A$813.60 ($565.86).

The suit was filed on behalf of Australian employees who were employed as delivery drivers or in-store workers between June 24, 2013 and January 24, 2018, Phi Finney McDonald said.

The claim alleges that benefits mandated under the Fast Food Industry Award 2010 like casual loading, travel costs, penalty rates, mininum three-hour shifts and laundry allowances among others were systematically avoided by Domino's.

“Domino’s workers should have been paid under the Award, but they were not. It is only fair that Domino's pay employees what they’re owed," Brett Spiegel, principal lawyer at Phi Finney McDonald, said.

The law firm added that the misconduct was revealed through an investigation spearheaded by the Retail and Fast Food Workers’ Union (RAFFWU).

“Some workers are owed tens of thousands of dollars. It’s nothing short of a disgrace," said secretary of RAFFWU Josh Cullinan, as quoted in the law firm's statement.

A spokesman of Domino's Pizza Enterprises, which is the largest franchisee of the Domino's Pizza brand outside the United States, did not immediately respond to a request for comment.

It posted a 9.2% fall in its first-half net profit in February. The company had also said it expected earnings before interest and tax (EBIT) for fiscal 2019 to be at the lower end of its guidance range of A$227 million to A$247 million.

($1 = 1.4378 Australian dollars)

(Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Darren Schuettler and Muralikumar Anantharaman)