Domino’s defends franchisee ethics

Published: 14 February 2017

Domino's Pizza

Pizza giant faces visa fraud and underpayment allegations

Pizza maker Domino's has defended the ethics of its franchisees following accusations some stores have underpaid staff and one has exploited foreign workers' visa arrangements.

Four franchisees have been let go in the past three years for deliberately underpaying their employees, a statement from Domino's Pizza said on Monday.

The fast food retailer also said it is investigating an allegation of visa fraud raised in a Fairfax Media report on Monday but said it had not previously received any complaints of that nature.

Fairfax Media's report said it has a phone recording of a Domino's franchisee from a store in far north Queensland asking for up to $150,000 in exchange for sponsoring a foreign worker.

In the recording, Fairfax said the franchisee admits to having sold sponsorship to another worker as part of visa negotiations.

Meanwhile, the Fair Work Ombudsman (FWO) is investigating a number of Domino's stores for allegedly underpaying staff.

"In recent months FWO has conducted a number of site visits at Domino's outlets across the country, these visits are continuing and as such it would be inappropriate to make further comment at this stage," a spokesman for the industrial regulator said.

Chair of the Migrant Workers Taskforce, Professor Allan Fels, said that the style of sponsorship arrangements being alleged were alarming and exploitative.

“It’s audacious and horrible to prey on these people,” Professor Fels told The Project. “Dominos should be ashamed of themselves if these allegations are proven.”

These events come just days out from Domino's half year earnings results due to be unveiled to the market on Wednesday.

The company said it works closely with franchisees in relation to marketing, training, technology and administrative support to provide them with the best opportunity for profitability and success.

It said when it has been identified that an employee has been underpaid, the company's first priority is to ensure the employee receives the correct pay.

Domino’s statement in full:

Domino’s Pizza Enterprises Ltd notes recent media coverage regarding its franchise network.

Domino’s believes this coverage did not reflect the strong financial performance of its franchise network, the high ethical standards required of all employees and franchisees, or the healthy levels of collaboration between the Company and franchisees.

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. This means the number of these small businesses that did not make a profit in the previous 12 months continues to reduce, to 21 last financial year.

87% of new store owners in this past year came from within the existing Domino’s network, either existing franchisees or store managers – which is strong endorsement of the franchise system.

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.

Domino’s has a dedicated investigative and auditing compliance department, which investigates franchisees for noncompliance with their employment law obligations. The team works closely with the Fair Work Ombudsman under the Self Compliance Deed.

In the past three years, Domino’s has removed four franchisees, operating seven stores, from our system for deliberately underpaying their employees.

Where Domino’s has identified an employee has been underpaid, the company's first priority is to ensure the employee is repaid correctly.

Domino's has found no evidence of a link between franchisee profitability and breaches of employment obligations in this time.

Domino’s has not previously received any complaints of visa fraud, but is investigating an allegation raised in today’s report. Domino’s has requested any available evidence to assist this investigation.

Domino’s reports its half year results on Wednesday 15 February 2017 and looks forward to clear disclosure around these matters and setting the record straight.

with AAP
© 2017 AAP