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Update: Domino's Pizza Enterprises Misled Franchisees by Instructing Them to Underpay Workers, Australia's Federal Court Rules

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(Updates with a statement from Domino's in the fifth paragraph and stock movement in the last paragraph.)

Domino's Pizza Enterprises (ASX:DMP) misled franchisees by asking them to underpay thousands of delivery drivers and in-store staff under obsolete employment agreements that did not include key entitlements, Australia's Federal Court ruled on Wednesday.

The class action filed in 2019 by Riley Gall, a former Domino's delivery driver, covers workers employed by Domino's Australian franchisees between 2013 and 2018.

The company's conduct was "objectively wrong" when it instructed franchisees to pay workers under outdated agreements as opposed to the applicable Fast Food Industry Award, which carries better terms and conditions, the court said.

It added that the determination of claims for loss and damage by group members will require a further hearing.

In a Thursday statement, Domino's Pizza Enterprises said the court assessed Gall's loss at AU$11,869 plus interest, but "potential wider exposure to other alleged group members remains highly uncertain and unquantifiable." The company added that it is reviewing the judgement to assess its options, including a potential appeal.

Its shares fell past 2% in recent Thursday trade.

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