Skip to content

Domino’s Pizza and Enterprise Agreements in Franchising

Enterprise agreements in the franchise space are common, especially among large franchisors. It provides certainty for employers and employees across the network, allows for greater financial forecasting and enables franchisors to put in place network-wide employment systems based on the terms of the agreement. 

However, enterprise agreements can have potentially detrimental effects on franchise networks, particularly when the fixed terms of such an agreement ends. In this article, we revisit enterprise agreements and how their use in the Domino’s Pizza franchise demonstrates the negative flow-on effects of large scale enterprise agreements in franchising.

What is an Enterprise Agreement?

An enterprise agreement sets out the minimum employment conditions of workers and can apply to a single business, group of companies (e.g. franchisees of a franchise) or, in some cases, an individual employee. The agreement is only binding if a majority of affected employees agree to its terms. The Fair Work Commission must also approve the proposed enterprise agreement, and ensure it passes the ‘Better Off Overall Test’ (BOOT) (set out in section 193 of the Fair Work Act 2009 (Cth)). In effect, the Commission must find that each employee under the Agreement will be better off overall than under the relevant modern award.

Domino’s Case

In 2009, an enterprise agreement for Domino’s employees was registered, which has now expired.

The Domino’s 2009 wage agreement did not pay the penalty rates stated in the Fast Food Industry Award 2010. Although the Domino’s enterprise agreement may have passed the BOOT in 2009, the applicable award – particularly increases to penalty rates introduced post-2009 – meant their Agreement was very unlikely to pass the BOOT today. The current award includes loadings for work after 9 pm Monday through Friday, and on Saturdays, Sundays and public holidays.

As a result of their expired agreement, and the changes to the award, Domino’s franchisees will have to pay its staff significantly more than it had been. The likely effect is that Domino’s will experience a material increase in labour costs this year that could stifle expenditure on other areas, including innovation and promotion.

Therefore, while the previously operative enterprise agreement may have benefited the Domino’s franchise network significantly between 2009 to now, it makes the future of the pizza giant somewhat unclear. A potential franchisee, for example, cannot rely on the financial success of another franchise in assessing the viability of its potential investment. The significant increase in labour costs could see some employees at risk if, for example, Domino’s introduces a policy of hiring cheaper workers (such as young workers) and outsources tasks previously undertaken by employees.

At present, the likely result of the agreement ending is unclear, and negotiations for a new arrangement are ongoing. Although the future financial success of Domino’s will remain to be seen, at least for now, their employees will receive higher salaries and penalty rates for overtime and weekends. 

Continue reading this article below the form
Loading form

Key Takeaways

Enterprise agreements can be a great way for you to bargain and negotiate with employees. However, to gain the Fair Work Commission’s approval, it must pass the BOOT test as well as a slew of other requirements. If you have an enterprise agreement in place in your company or franchise network, ensure that it has not become outdated in the face of amendments to awards. If you have any questions, get in touch with our employment lawyers or franchise lawyers on 1300 544 755. 

Register for our free webinars

ACCC Merger Reforms: Key Takeaways for Executives and Legal Counsel

Online
Understand how the ACCC’s merger reforms impact your legal strategy. Register for our free webinar.
Register Now

Ask an Employment Lawyer: Contracts, Performance and Navigating Dismissals

Online
Ask an employment lawyer your contract, performance and dismissal questions in our free webinar. Register today.
Register Now

Stop Chasing Unpaid Invoices: Payment Terms That Actually Work

Online
Stop chasing late payments with stronger terms and protections. Register for our free webinar.
Register Now

Managing Psychosocial Risks: Employer and Legal Counsel Responsibilities

Online
Protect your business by managing workplace psychosocial risks. Register for our free webinar.
Register Now
See more webinars >
Emma Jervis

Emma Jervis

Read all articles by Emma

About LegalVision

LegalVision is an innovative commercial law firm that provides businesses with affordable, unlimited and ongoing legal assistance through our membership. We operate in Australia, the United Kingdom and New Zealand.

Learn more

We’re an award-winning law firm

  • Award

    2025 Future of Legal Services Innovation Finalist - Legal Innovation Awards

  • Award

    2025 Employer of Choice - Australasian Lawyer

  • Award

    2024 Law Company of the Year Finalist - The Lawyer Awards

  • Award

    2024 Law Firm of the Year Finalist - Modern Law Private Client Awards

  • Award

    2022 Law Firm of the Year - Australasian Law Awards