Embattled pizza giant Domino’s faces calls for an independent compensation scheme for exploited workers as well as heightened scrutiny from the workplace regulator and the Senate amid allegations of widespread wage fraud.
The chairman of the migration workers taskforce Professor Allan Fels said Domino’s needed to take the lead and arrange a “genuine” and “independent” compensation scheme for underpaid workers, who he believes could be in the thousands.
“It is hard to believe that underpayment at Domino’s doesn’t number in the thousands,” he said. “Once systemic underpayment occurs, it spreads quickly through much of the system.”
Fairfax Media on the weekend exposed allegations that Domino’s franchisees were engaged in widespread underpayment of workers and, in some cases, visa fraud. It also produced evidence that many franchisees struggled to make a profit.
Despite denials from the company of any issues, Domino’s shares were down as much as 6 per cent in morning trading before closing at $61, down 4.76 per cent for the day.
Professor Fels chaired the 7-Eleven wages review scheme, which has so far paid out $73 million to underpaid workers. Domino’s has more than 14,000 workers across its 600 network of corporate and franchised stores.
“It looks as if illegal visa payments are occurring on a worrying scale,” Professor Fels said.
Domino’s would not say whether it would consider a compensation scheme but a spokesman told Fairfax Media that “where an employee has been underpaid, the first priority should be to ensure they are repaid correctly”.
“We have never been contacted by Professor Fels, but would welcome the opportunity to have a discussion with him and outline our rigorous systems and processes in place to identify unethical behaviour by a limited number of franchisees.”
Meanwhile, the Fair Work Ombudsman said it would also be “conducting further investigations over the next few months” and work with other agencies “if the need arises”.
Nationals senator John Williams said there needed to be a wider inquiry into the $170 billion franchise industry, particularly after the latest Domino’s wage fraud scandal.
“This needs to be looked at and I intend to call an inquiry after the life insurance and whistleblower inquiries are complete,” he said.
Domino’s has launched an investigation into a franchisee after Fairfax Media obtained a phone recording of the store owner asking for money in exchange for sponsorship at a Domino’s store in regional Queensland.
The Department of Immigration would not say whether it was also investigating the case, but said it was illegal to ask for or receive a benefit for visa sponsorship with penalties including two years’ imprisonment and fines of up to $324,000. It said it takes all allegations of visa fraud “very seriously”.
Domino’s won’t say how many suspected instances of underpayment it has come across in its network but Fairfax Media has compiled a list of hundreds of employees from Victoria, NSW, Queensland and South Australia where Domino’s’ own audits found potential fraud and underpayment.
The company said many instances of underpayment were just “simple misunderstandings” and warned against conflating “deliberate and accidental employee underpayments”.
The company announces its half-year results on Wednesday.