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Two takeaways from the Pizza Hut pay saga

Two takeaways from the Pizza Hut pay saga

David Bates
1 February 2017

By David Bates

Ordered a pizza lately? If you have, there’s a good chance the driver who cheerily delivered it to your door was being underpaid by their employer.

What percentage of the Pizza Hut franchises investigated by the Fair Work Ombudsman (FWO) do you think were found to be fully-compliant with Australia’s hopelessly complex, arcane and inflexible employment laws?

80%? 50%? 30%?

No, just 8%.

That’s right, of all the Pizza Hut franchises audited by the FWO, 92% failed to demonstrate they were fully-compliant with the Fair Work Act and the applicable Modern Award.

Examples of common breaches included incorrectly classifying employees, failing to issue fully-compliant pay slips, failing to maintain correct time and wages records and, in some cases, incorrectly classifying employees as ‘independent contractors’ and paying drivers on a ‘per delivery’ basis.

The person in charge of the FWO, Natalie James (who issues countless press releases and apparently complains about being held accountable for the actions of the agency she leads), jumped on the telly to tell us she hopes Pizza Hut will now “step up, take responsibility, put in place step to make sure that their workers are paid correctly”.

So here’s two things every employer can take away (pardon the pun) from this latest (remember 7-11?) underpayment fiasco:

Takeaway #1: Our employment laws are not fit for the 21st century, and even employers who try to do the right thing find it virtually impossible to make heads or tails of the Fair Work Act and Modern Awards.

Here’s the proof: Pizza Hut franchisees apparently all had access to expert HR advice as part of their franchise agreement. However, that advice didn’t include guidance explaining which industrial instruments apply to specific employees within specific outlets. Put another way, small business owners now need to have a law degree and a Masters in Employment Law in order to understand their obligations.

Takeaway #2: the FWO is a disaster. Here’s the proof:

a) the FWO is, by law, responsible for educating Australian employers and employees about Fair Work practices, rights and obligations

b) the Fair Work Act has now been in operation for over six years.

c) 92% of Pizza Hut franchisees investigated by the FWO didn’t appear to have been educated about Fair Work practices, rights and obligations.

If I did my job as badly as Natalie James’ agency does theirs, I’d be asked to explain why I shouldn’t be dismissed for serious misconduct.

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