Domino’s hit by claims that franchisees are asking employees for cash in return for visas

Allegations that franchisees at Domino’s Pizza spoke to workers about paying for visa sponsorship have prompted employment lawyers to remind businesses about the potential consequences of failing to comply with immigration and workplace laws.

The reports, which come from a Fairfax investigation into the popular pizza network this week, include a phone recording from a conversation between a franchisee and an individual that was working undercover for Fairfax, in which the franchisee says the caller may need to pay “$100,000 plus” for a potential visa sponsorship.

Responding to the claims, Domino’s says it was not previously aware of any allegations of visa fraud across its network, but is investigating the claims now.

The weekend’s reports also raised a number of other concerns at the fast food company, including allegations of significant underpayment of staff wages and severe costs pressures being placed on franchisees. Domino’s says it has a committed team to watch workplace compliance issues, and on the whole there are “healthy levels of collaboration” between head office and franchisees.

In a statement to the ASX, Domino’s said it has requested evidence around the claims of the requests for money for visa sponsorship to conduct its own investigation into the matter.

The company will report its half-year financial results to the market on Wednesday.

Australian workplace laws apply for visa holders

When it comes to businesses hiring visa holders or setting up sponsorship for workers, following the requirements of the Immigration Department, along with Australian workplace laws, is absolutely key to avoiding disputes down the line, says Holding Redlich partner Rachel Drew.

“First of all, there needs to be a genuine position available, so an employer cannot create a position just for the purposes of obtaining a visa,” Drew says.

“You need very clear terms around what the position is, what the position description is, it needs to sit within the list of what the Department of Immigration requires.”

Taking the requirements seriously on the particular visa or sponsorship arrangement you are working with is vital, says Drew, and bodies like the Fair Work Ombudsman are watching compliance closely.

“They prioritise those complaints [from visa holders] because there does seem to be a tendency around some employers to take advantage of the fact that the visa holder wants to remain in Australia,” she says.

The Ombudsman has outlined migrant workers as a key area of focus for its compliance operations, and said in its most recent annual report that is has upped the level of compensation secured for this group. Visa holders make up around 7% of the country’s workforce, the Ombudsman says, while 13% of the workplace dispute forms finalised in the 2015-16 year involved a visa holder.

Three-quarters of court actions launched by the Ombudsman against businesses involve an individual that holds a visa, a figure that is up from 46% in 2014-15.

The Ombudsman says the unique vulnerabilities of migrant workers make their relationships with businesses a key area of focus.

“New to our country, they commonly don’t have a high understanding of the rules that apply in workplaces or where to get help if they are unsure,” the Ombudsman said of these workers in its most recent annual report.

Drew says businesses need to understand the Department of Immigration also has its own processes in place to discourage individuals from using sponsorship and visas systems improperly, and these processes come with their own set of penalties.

“From the Department of Immigration’s perspective, they have set very clear rules to discourage taking advantage of visa holders,” she says.

The process of resolving any issues raised about a business’s behaviour on these issues can be time-consuming and business owners would want to avoid them, says Drew.

“A breach of those obligations can result in fines as well as prosecutions,” she says.

Workplace lawyer Peter Vitale says that once a visa holder is working for a business, its crucial to remember that Australian workplace laws still apply to that staff member, and there can’t be any amendments to conditions or entitlements because of their visa status.

“The Fair Work Ombudsman has litigated fairly extensively against businesses who exploit or underpay workers on a visa arrangement,” he says.

The focus is now firmly on these issues, with an increase in reports of improper behaviour toward migrant workers, as well as penalties for this conduct, says Vitale.

“What we’ve seen is an emerging pattern of unscrupulous franchisees taking advantage of employees that are perhaps not fully informed,” he says.

SmartCompany contacted Domino’s for additional comment but was referred to the company’s statement to the ASX.

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