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Domino’s tried to avoid paying around $10 million in legal costs after its loss in a Federal Court underpayment class action.
Now-retired Federal Court Justice Bernard Murphy found the pizza chain breached Australian Consumer Law by instructing franchisees to underpay thousands of drivers and in-store workers under outdated employment agreements between 2013 and 2018.
Employees paid under enterprise bargaining agreements rather than the Fast Food Industry Award 2020 missed out on a number of entitlements, including the 25 per cent loading for casual workers and additional penalty rates after-hours, on weekends and public holidays.
When the judgment was handed down on 22 July, Phi Finney McDonald principal lawyer Brett Spiegel said it was a “great result” for the firm’s class action members, including lead plaintiff Riley Gall.
“This systematic underpayment over a five-year period is not only unlawful, but also not a viable or legal business model.
“This landmark victory highlights the harm widespread and systemic wages underpayment inflicts on a vulnerable labour force. And it’s a timely reminder for employers to pay their workers what they are owed under the applicable award or agreement,” Spiegel said.
In a decision published on Monday, 3 August, Justice Murphy awarded judgment for Gall in the sum of $11,869.33, plus interest, and ordered Domino’s to pay costs, to be assessed on a lump-sum basis.
While Domino’s accepted the result would ordinarily mean Gall should have an award of costs in his favour, it argued the interests of justice in the present case “require that costs do not simply follow the event”.
The pizza chain argued it succeeded on the “important issue” of whether it held reasonable grounds for representations of opinion, and that these issues “generated significant evidence, expert analysis, documentary material and legal submissions” for both sides.
It also claimed Gall was unsuccessful in his loss of opportunity claim, and this was a “distinct, readily separable issue to which the parties and the court dedicated material time and resources”.
If the court would not grant the parties time to file additional costs submissions, Domino’s alternative submission was that costs be reduced by 30 per cent to reflect its success on those key issues and address the considerable resources already spent.
Justice Murphy rejected all of Domino’s contentions, having not been persuaded to reduce costs or award costs to Domino’s.
On the 30 per cent reduction submission, Justice Murphy said there was no evidentiary foundation to support the reduction “of that magnitude” and, even if it had been successful, the appropriate reduction “would not have come to anywhere near 30 per cent”.
“That would be a very substantial reduction in a case in which I would be unsurprised if party/party costs were not in the order of around $10 million. The issues on which Domino’s relied were not issues which involved substantial costs,” Justice Murphy said.
Domino’s objections to costs being awarded on a lump-sum basis were also rejected by the court, with Justice Murphy finding there was no reason to think this assessment could not be calculated fairly.
Given the class action’s size and complexity, Justice Murphy said it was a “paradigm case for the use of the lump-sum costs assessment regime”. Had it been done through traditional taxation, as submitted by Domino’s, “it is likely to be onerous, time-consuming and expensive”.
Justice Murphy also ordered that security for costs be released to Therium, the litigation funder behind the class action.
Domino’s opposed this order pending the filing of its proposed appeal.
If released before the determination of this potential appeal, and that appeal is successful, Domino’s argued it would be “unsecured with no prospect of recovering its costs from the applicant or group members”.
Justice Murphy rejected this point due to the obligation Therium would have to pay any adverse costs order should Domino’s be successful.
“There is no reason to believe, and Domino’s has not proffered one, to indicate that if the costs order was reversed following a successful appeal, the costs could not or would not be met by Therium,” he said.
Further, Domino’s has not identified any grounds for its appeal, and the Federal Court was unable to have regard to its merits.
“It is relevant too that the funder has been held out of its funds for many years. I consider it appropriate to release the security of costs,” Justice Murphy said.
Citation: Gall v Domino’s Pizza Enterprises Limited (No 6) [2026] FCA 1061.
