Pizza giant Domino’s has been forced to draw up a new employment agreement for its 20,000-strong workforce after its existing ones were found to pay workers below award rates.
In a brief statement, Domino’s said it welcomed the Fair Work Commission’s decision to terminate its existing enterprise bargaining agreements (EBAs), which will be replaced by 24 January 2018.
“Domino’s did not oppose the termination of the existing EBAs. It requested, and was granted, a period of time to allow the business to transition to the new proposed EBA currently under negotiation by the parties,” it said.
“This new EBA would apply to the 20,000+ employees throughout 660 Domino’s stores across Australia.”
According to The Australian Financial Review, the company stands to lose between $35 million and $50 million a year from the new agreements being hiked to at least match industry award rates.
“We never provided the $35-$50 million range to media. We have only ever confirmed that this figure is in line with previous guidance provided to the market which is approximately 2 per cent of store sales,” a Domino’s spokesperson told My Business.
Based on the company’s network sales of $2.318 billion last financial year, that would equate to $46.37 million.
The exact size of the wage increase costs are yet to be finalised, with the spokesperson confirming that it is continuing its negotiations with the Fair Work Commission.
“The terms and details of the new agreement will be announced once the parties have reached agreement,” the spokesperson said.
“The new agreement will provide terms better off than the current award for our employees.”
However, the spokesperson would not respond to My Business’ questions about how the company would recoup the cost of higher wage costs, and whether it could lead to job losses.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.