A Fair Work Commission decision on Sunday penalty rates is imminent, but market darling Domino’s Pizza Enterprises has kicked off 2017 by asking customers to help pay for a weekend pay increase for the company’s “vital” team members.
Domino’s, which booked a 44% profit increase in 2016 at $92 million, announced a 10% Sunday surcharge last week to help cover a 25% hourly loading for team members working on Sundays.
“This will ensure the Sunday adult rates for our team members is between $29.16 and $29.97 an hour for in-store employees and $26.04 an hour for drivers, plus $2.27 for each delivery in their private vehicle,” a Domino’s spokesperson told SmartCompany.
Domino’s is still negotiating an expired enterprise agreement, with the company saying it expects a resolution in the first half of the year. The company says “significant disruption in the industrial relations environment” has led to the drawn out process, and says the wage increases come “as the negotiations have taken longer than anticipated”.
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The changes came into effect on January 8, and mark a significant pay increase in particular for the company’s delivery drivers. Domino’s says this change is about a 40% increase on what drivers took home a year ago, with SmartCompany understanding the hourly Sunday rate for drivers one year ago was $18.99 an hour.
“The voluntary increase and surcharge were among a number of pricing models successfully tested with our customers, and agreed upon with our franchisees,” a spokesperson says.
Online, however, the feedback from customers was mixed—some congratulated the pizza chain for rewarding its staff and others were concerned about the previous low rates of pay. However, many people questioned why customers should have to foot the bill for staff penalty rates when a listed company like Domino’s is known for its increasing profits.
“Who was the smart cookie that came up with this dumb idea?” one customer asked on Facebook.
While businesses have previously told SmartCompany about the need for a surcharge to assist with the payment of staff’s public holiday penalty rates, a consistent surcharge applied to weekend work is less common in Australia.
The Domino’s announcement comes at a tense time for penalty rate discussions in Australia, as the business community waits to hear the Fair Work Commission’s decision on whether Sunday rates should be pulled in line with Saturday rates.
While an outcome was expected in September 2016, the commission delayed its decision after allowing more times for community submissions on the issue. Business groups have campaigned strongly for the change, arguing a 24/7 working environment means Sunday work should no longer be considered a special category.
The Productivity Commission recommended in 2016 that Sunday penalty rates in the hospitality and retail industries come into line with those applied on Saturdays.
Peter Strong, chief executive of the Council of Small Business of Australia, told SmartCompany last year the system is already way to complicated, and businesses wanted a more straightforward way of calculating hourly rates.
“It’s pretty black and white,” he said.
“There are a bunch of people who can’t open their business because they have to pay higher rates [on Sundays].”
* This article was updated on January 11 to include that Domino’s hourly casual driver rate was $18.99 at the beginning of 2016.