On 22 July 2026, the Federal Court handed down a decision in Gall v Domino’s Pizza Enterprises Limited with significant practical consequences for franchisor liability in Australia.
The Court found that Domino’s could be held liable, under Australian Consumer Law, for misleading conduct arising from its own centralised training, payroll and compliance systems, which told franchisees the wrong industrial instrument and resulting rates of pay.
The lead applicant’s loss was assessed at $11,869.33 plus interest, but the broader exposure across the network remains undetermined.
So, what happened?
Riley Gall brought a class action against Domino’s Pizza Enterprises Limited after alleging he had been underpaid while working as a casual delivery driver for a Queensland Domino’s franchise.
What made the case unusual wasn’t the underpayment allegation itself, but the legal pathway.
Rather than suing his employer under the Fair Work Act, Gall sued the franchisor under section 18 of the Australian Consumer Law, alleging that Domino’s had engaged in misleading or deceptive conduct toward its franchisees, which ultimately resulted in his underpayment.
What the Court found
When issuing the decision, Justice Murphy didn’t point to a single statement by Domino’s as a determinative and critical misrepresentation, but rather found that a combination of ordinary, well-intentioned business practices had, cumulatively, conveyed a representation of fact that turned out to be wrong.
More specifically, the Court found issue with:
- the franchise disclosure and compliance documents provided to franchisees;
- Fair Work training materials, which stated that two enterprise agreements (from 2001 and 2009) governed pay and conditions for drivers and in-store staff (when it fact it did not cover many franchise locations);
- Domino’s own audit program, which checked franchisees against the enterprise agreement rates;
- Domino’s payroll systems, which came pre-configured with those incorrect rates and other governance oversights.
The Court held that, for a significant part of the network, Domino’s pay tables were incorrect as the Fast-Food Industry Award 2010, not the enterprise agreement, actually applied.
The resulting error materially impacted employees given that the Award was materially more generous on casual loading, weekend and public holiday penalties, and delivery and laundry allowances.
Two findings of the Court stand out for any organisation running centralised systems across a network.
- Good faith was not a defence. Even an honest belief that the enterprise
agreements applied did not prevent the representations from being misleading under
consumer law. - Wording mattered. The Court noted that presenting the advice as a qualified
opinion, rather than a definitive statement of fact, may have led to a different
outcome.
The outcome, and what’s still unresolved
While the lead applicant’s claim has been determined, the broader class action and Domino’s overall financial exposure remain unresolved. Domino’s is reviewing the judgment, including potential grounds of appeal.
Why this matters for franchisors
Centralised payroll, training and compliance systems remain critical for franchise networks. This decision doesn’t change that – it highlights that those systems must be accurate, appropriately governed and regularly reviewed.
Platforms should independently verify industrial settings, minimise manual intervention and prevent unauthorised local changes that could introduce payroll errors.
Where to start: a franchisor perspective
As a franchisor, this decision is a timely reminder to stress-test your own position before a
regulator, employee or class action lawyer does it for you.
Questions worth considering are:
- What, if any, governance and compliance support and systems are implemented across
your franchise network. - Are your systems designed, configured and regularly reviewed by workplace relations
experts, with governance controls that prevent unauthorised variation? - Are your systems configured to the minimum standards and implemented against a
strict governance framework which prevents localised variation or possible user error. - When was your payroll system’s configuration last checked against the current conditions and entitlements?
- Could you show a regulator, today, the reasonable steps your business has taken to prevent underpayment across every location?
- Do you have visibility across your network, or are localised systems creating blind spots?
- Do you have a system and process which permits employees of a franchise business to raise concerns for review?
- If time and attendance data has to move from one system into another for payroll processing, is that transfer automated and verified, or does it rely on manual export and import steps that could introduce error?
A conversation worth having
If you’d like to better understand how this decision may affect your business, or discuss practical steps to strengthen your payroll, compliance and governance framework, our team is here to help.
