Widespread non-compliance with workplace law by Pizza Hut franchiseees has been revealed in a Fair Work Ombudsman (FWO) Activity Report going back two years.
The FWO audited a total of 34 franchisees of which 32 engaged delivery drivers – six enquiries are ongoing.
Of the 26 completed audits, 24 franchisees (92 per cent) were found to be non-compliant with only two franchisees found to be meeting all of their legal obligations.
Fair Work audited 26 out of more than 270 stores and identified the breaches in relation to driver pay.
FWO has issued three franchisees enforceable undertakings.
Seven had misclassified delivery drivers as independent contractors rather than as employees.
A total of $12,086 in underpayments was owed to workers, mainly for underpayment of minimum hourly rates and allowances such as laundry while some underpayments were a consequence of the franchisee applying the wrong awardor failing to increase rates in line with Fair Work Commission minimum wage decisions.
In a statement from Pizza Hut Australia CEO Lisa Ransom said one of the three non-compliant franchisees issued with enforceable undertakings, Romaro Holdings, is no longer a franchisee. Pizza Hut has taken over the store management.
Ransom said “Pizza Pan Group has been the master franchisee of Pizza Hut in Australia since September 2016 and takes its responsibilities as the new franchisor and employer very seriously.”
The company has worked with franchisees and the Fair Work Ombudsman and taken expert advice on industrial awards.
Pizza Hut has engaged a third party payroll provider for all corporate stores and given franchisees the opportunity to tap into this resource.
“We have also worked diligently to reinforce to franchisees their obligations as employers, ensure all the appropriate tools are in place for them to calculate reates of pay, and facilitate access to the Fair Work Ombudsman online training tools.”
Ransom said the company has been proactive in developing and finalising a compliance deed with Fair Work Ombudsman.
“Pizza Hut does not tolerate non-compliance and is committed to ensuring all franchisees meet their legal obligations,” she said.