Domino’s Pizza has abandoned a new and potentially more expensive enterprise bargaining agreement for its staff, saying it will instead keep workers on the fast food industry award after its labour costs came in below expectations.
Domino’s workers went onto the fast food industry award in January in an interim measure ahead of a long-fought enterprise bargaining agreement (EBA) being registered with the workplace regulator, the Fair Work Commission.
On Monday Domino’s announced it will not pursue approval of the new EBA and instead keep its employees on the basic award after labour costs came in below expectations.
Domino’s Australia/New Zealand chief executive Nick Knight said wages under the basic award were similar to those in the proposed EBA.
The company said the move was not driven by cost but would “eliminate uncertainty”.
The retail workers union, the SDA, has criticised Domino’s withdrawal from the proposed new EBA, saying workers would miss out on additional benefits secured under the agreement.
“The proposed agreement was reached after lengthy negotiations between the parties,” SDA national secretary Gerard Dwyer said in a statement.
“The SDA will continue to engage with Domino’s with a view to securing an enterprise agreement that delivers for Domino’s employees.”
Mr Knight said Domino’s had been prepared to negotiate the new EBA because it provided additional benefits and the company was “still strongly committed to achieving additional benefits and security for our employees”.
“But (Domino’s) believe this can be achieved more efficiently through input into the current four-yearly review of the Modern Award being conducted by the Fair Work Commission,” he said.
The new wages deal had been a significant issue for Domino’s, with analysts estimating higher labour costs could affect some franchise stores’ profitability and hurt the group’s profit margin.
Domino’s shares rose 75 cents, or 1.8 per cent, to $41.92 on Monday.