If you have indulged in a takeaway pizza on a Sunday or a public holiday you might be familiar with paying a surcharge for the privilege.
Restaurants and food chains use surcharges to make up for the cost of penalty rates, rather than absorb them into their bottom line.
But, despite a decision by the Fair Work Commission that has seen penalty rates fall substantially since July last year, many restaurants and cafes continue to charge the same Sunday surcharge.
Harry Connor has worked in numerous restaurants and cafes over the past 17 years, so he has a good grasp of pay and working conditions in the sector.
He had only been working at an inner-city Melbourne cafe for a fortnight, but had covered two public holidays in that time.
On both those days, he claims the cafe added a surcharge to customer bills but nothing was passed onto the cafe’s employees.
“I find that quite shocking,” he said.
“There was no public holiday rate passed onto the staff, nor even a weekend rate passed onto the staff.
“It’s done in a very underhanded, very sly way.”
Mr Connor took his concerns about pay, and several other issues he was concerned about, to management.
In response, management terminated his employment contract.
He said the reason management gave him was he was causing problems and he was difficult to work with.
“It’s the same line bosses often give you when you query your pay,” he said.
“I’ve actually been told point blank by employers that this is how the hospitality industry is these days, like it or lump it.”
Angry and upset at having just lost his job, Mr Connor went to the union that represents hospitality workers, United Voice.
It organised legal action, which may lead to court proceedings, but the cafe has agreed to a reconciliation process over the next few months.
In the meantime, Mr Connor wants to highlight how widespread he believes the phenomenon has become.
“There needs to be a serious overhaul of the industry … of public holiday surcharges, and definitely a serious investigation into the payment of existing pubic holiday pay rates and existing weekend rates,” he argued.
Fast food surcharges stay the same
It is also happening in the takeaway sector.
Antony — who declined to give his last name — bought a pizza from Domino’s North Tamworth store.
He told RN Breakfast he was confused by a sign on the counter explaining: “On Sundays we apply a 10 per cent surcharge … to allow for penalty rates for our team members.”
Domino’s has not changed its 10 per cent Sunday surcharge despite a reduction in penalty rates. (Audience submitted)
It confused Antony because he said the employee told him her penalty rate had just been reduced as of July 1 based on a Fair Work ruling.
“I thought, ‘Oh, that’s a bit odd’,” he said.
“I shot off a message to their social media channel and they came back and said, ‘Yes we charge a premium on Sunday because we pay penalty rates’.
“I went back to them and said the Fair Work Commission had reduced Sunday rates, effective July 1 but I didn’t get a response after that.
“I think it was just a standard response they send people that complain about Sunday premiums.”
Sunday casual workers in the takeaway sector used to get a wage rate 175 per cent above the normal weekday rate.
On July 1 last year, penalty rates for casuals were cut by 5 percentage points.
Then, again, on the July 1 this year, they were cut by a further 10 percentage points, leaving the penalty rate at 160 per cent of the weekday rate.
Sunday pay rates for permanent fast food staff have dropped from 150 per cent to 135 per cent over the same period.
“She [the Domino’s sales assistant] told me she was no longer getting the previous Sunday rate,” Antony told RN Breakfast.
“I’m sure she’s being paid the correct amount by law, but that amount is significantly reduced from the July 1, but Domino’s are still charging a premium.”
RN Breakfast asked Antony if the surcharge Domino’s were displaying on their counter was the same surcharge as in June.
“Yes, it’s exactly the same,” he said.
Surcharge doesn’t cover full cost of penalties: Domino’s
Domino’s Australia and New Zealand CEO Nick Knight confirmed that was the case in an interview with RN Breakfast.
“Yes, we haven’t reduced the penalty rate surcharge,” he said.
“But what I can make clear today is that Domino’s do pay a penalty rate, and the surcharge that we do charge in no way fully covers the extra cost of penalty rates paid to team members on that day.”
The ABC asked Domino’s if its profits had gone up as a result.
“Yes, but they also went down significantly when we started paying penalty rates,” Mr Knight added.
Former delivery driver Ron Higgins also spoke out about Sunday surcharges.
He argued Antony’s story was consistent with a broader Domino’s strategy of maximizing profits for the parent company, Domino’s Pizza Enterprises, at the expense of franchisees.
“Domino’s would often target sporting events, offering a 30 per cent discount,” he said.
“They’d then sell double the number of pizzas, so Domino’s hierarchy have made double the amount of money, but the poor old franchisee had worked for nothing.”
He said the franchisee cops the discount, while Dominos gets the turnover from the increase in sales (because it charges the franchisee the same cost for the ingredients).
“You wouldn’t be a franchisee for love of money,” Mr Higgins said.
Antony said he was simply angry about why customers were charged extra on weekends, and where that money was going.
“If they came out and said, ‘We’re charging a 10 per cent premium on Sundays because we need to make more money, or we want to increase our profit’, or whatever, you know, I’d probably just make the decision and say, ‘OK, yeah, I’ll do it [order a pizza],” he said.
“But this was misleading.”