Fair Work Ombudsman Report Finds Non-Compliance with Pizza Hut Outlets
Friday 27 January 2017 @ 9.27 a.m. | Industrial Law
A Fair Work Ombudsman (FWO) Activity Report has identified widespread non-compliance within Pizza Hut outlets with three quarters of audited outlets failing to comply with workplace laws.
The investigation, which commenced in November 2015 and focused on the engagement of delivery drivers, audited a total of 34 franchisees of which, 32 engaged delivery drivers. Audits have been finalised with respect to 26 of the franchisees who engaged drivers while inquiries into the remaining six franchisees are ongoing.
Outcome of the audit
The audit found that seven franchisees had misclassified delivery drivers as independent contractors rather than employees, meaning full entitlements were not paid. As a result, a total of $12,086 in underpayments is owed to the Pizza Hut drivers after they were not paid the proper minimum hourly rate, or missed out on allowances for laundry.
Three franchise operators — two in Sydney (Penrith and Surry Hills) and one in Queensland (Mango Hill) — paid their workers on a "per delivery" basis at rates as low as $5.70 while failing to issue payslips and keep proper staff records.
Given the extent of non-compliance with respect to arrangements for delivery drivers, preliminary discussions relating to a proactive compliance partnership have been held with the owners of a Pizza Hut franchise.
Reaction from the Ombudsman
FWO Natalie James said most of the 170 workers involved in the audit were aged under 24 and potentially vulnerable to workplace exploitation and are mainly students, including a student visa holder from India:
"We know that younger people, who have less experience in the workplace, are more likely to be unaware of their rights … In some instances, drivers were paid as little as $5.70 per delivery while also being made to cover fuel and vehicle operating costs. The FWO will continue to monitor Pizza Hut outlets and will follow up with those identified through this process to ensure that areas of non-compliance are being addressed … Pizza Hut has not at this stage stepped up and taken responsibility for the workplace arrangements in its network. We are hoping that they will take some action and sign on to a compliance partnership with us and take responsibility to ensure these vulnerable workers are being paid correctly."
The FWO also confirmed that legal action against one franchisee was being considered because of the seriousness of the workplace breaches identified in the audit. Ms James also said that people employed as delivery drivers are often very young, making them more vulnerable to exploitation in the workplace.
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Sources:
Fair Work Ombudsman report reveals non-compliance in major fast-food franchise - FWA Media Release
Pizza Hut Fair Work audit finds delivery drivers underpaid, franchisees breaching workplace laws - abc.net.au
