Federal Court Rules Against Domino's Pizza Enterprises in Gall Class Action Over Enterprise Agreement Misrepresentations

Details of Federal Court Judgment and Misleading Conduct Finding

On 23 July 2026, the Federal Court of Australia issued its judgment in the Gall class action, initiated on 24 June 2019, with the trial held in November 2022. The 560-page Reasons for Judgment addressed a "novel" legal issue concerning whether Domino's statements about certified enterprise agreements applying to franchisee employees constituted misleading and deceptive conduct under Australian Consumer Law.

The dispute relates to the period from 24 June 2013 to 23 January 2018, during which Domino's relied on enterprise agreements certified by the Australian Industrial Relations Commission and Fair Work Commission as applicable to all corporate and franchised stores. Despite prior acceptance of these agreements by the Workplace Ombudsman in 2009 and the Fair Work Ombudsman in 2011, the Federal Court found a coverage clause in a 2005 enterprise agreement invalid. Consequently, the Court ruled that Domino's historical representations about the agreements' application were misleading and deceptive.

Enterprise Agreements and Contested Coverage Clause

The litigation focuses on the scope of certified enterprise agreements governing employment terms at Domino's stores during the relevant timeframe. Lead applicant Mr Gall argued that these agreements did not apply to certain franchise stores, whose employees should have been covered by the Fast Food Industry Award 2010. He claimed Domino's representations to franchisees that the certified agreements applied led to employees being paid under those agreements rather than the Award. Mr Gall characterised these as representations of fact or opinion.

The Federal Court determined Domino's conduct was representations of fact. Alternatively, even if considered opinions, Mr Gall failed to prove Domino's lacked reasonable grounds for those opinions. The Court found that, legally, the certified agreements' construction rendered Domino's factual representations misleading and deceptive under Australian Consumer Law and proceeded to assess loss and causation for Mr Gall's claim.

Calculation of Mr Gall's Individual Loss and Underpayment

The Court assessed Mr Gall's loss at about $11,869.33 plus interest, relying on expert evidence and inferences about his likely remuneration under Award rates. This was not a simple pay rate difference calculation but a detailed evaluation of probable earnings under the Award framework.

Mr Gall's claim included underpayment and loss of opportunity components. While the Court ruled in his favour on underpayment, the loss of opportunity claim was dismissed. This loss assessment pertains solely to Mr Gall’s individual claim; other group members’ claims require separate proof of causation and loss in future hearings.

Ongoing Uncertainties Around Group Member Claims and Exposure

Domino's broader exposure to other group members remains uncertain and unquantifiable. The company noted this depends on future hearings to identify group members, establish individual causation, and calculate losses. Potential exposure also hinges on the exhaustion of appeal options by both Domino's and group members.

Not all 35 Common Questions in the proceeding were resolved in the July 2026 judgment. Identification of specific franchise stores allegedly subject to the Award and their employees was also not determined. Significant factual and legal issues remain before potential liability scope can be fully assessed. Domino's has committed to updating the market per continuous disclosure requirements.

Domino's Current Review and Appeal Considerations

Domino's is thoroughly examining the 560-page judgment to determine its stance and possible appeal grounds. The company has not disclosed whether it will appeal or the specific grounds under consideration. Given ongoing court proceedings, Domino's refrains from further comment on merits or strategy, aligning with standard practice for listed companies in litigation.

The judgment did not issue final orders. Justice Murphy directed parties on proposed orders and requested short minutes of order within seven days ahead of his retirement. The Court also intends to refer remaining proceedings to mediation, suggesting potential settlement or dispute resolution before final orders.

Novel Legal Issue and Australian Consumer Law Application

The Federal Court described the case as "novel," noting the litigation’s unique legal framework. Instead of Fair Work Act claims, Mr Gall pursued proceedings under Australian Consumer Law, focusing on whether Domino's conduct was misleading or deceptive in supplying services—specifically, franchise employment arrangements—rather than direct employment law breaches.

The detailed 560-page judgment anticipates appeal to the Full Court, providing a comprehensive evidentiary record. This novel use of consumer protection law in the franchise employment context may influence future interpretation and communication of enterprise agreements within the franchise industry.

Background of the Class Action Initiation

Domino's Pizza Enterprises operates Domino's stores across Australia via corporate and franchised models. The class action was initiated by Mr Gall on behalf of franchisee employees working as delivery drivers or in-store staff from 24 June 2013 to 23 January 2018. Domino's announced the Gall class action to the ASX on 25 June 2019, following formal commencement.

Mr Gall alleged that certain certified enterprise agreements did not apply to some franchise stores, whose employees should have been covered by the Fast Food Industry Award 2010. He claimed Domino's misrepresented coverage to franchisees, causing underpayment relative to Award rates.

Market and Investor Impact of the Judgment

For investors, the judgment marks a significant development in a prolonged legal dispute disclosed since June 2019. The misleading and deceptive conduct finding establishes legal liability extending beyond Mr Gall’s claim, with potential exposure to other group members though quantum remains uncertain. The immediate quantified liability of approximately $11,869.33 plus interest is likely immaterial in absolute terms, but broader group claims may have greater impact.

The Court’s indication to refer remaining proceedings to mediation could offer Domino's an opportunity to resolve group claims without protracted litigation, though mediation outcomes remain uncertain. Investors will monitor financial reports and updates on provisions or contingent liabilities related to this case. The appeal process and its results will also attract close market attention, especially if Domino's challenges the misleading conduct finding or loss calculation methodology.

Regulatory Background and Fair Work Compliance Considerations

The case’s background reveals a complex regulatory history. Investigations by the Workplace Ombudsman (2009) and Fair Work Ombudsman (2011) had accepted the certified enterprise agreements later deemed invalid by the Federal Court due to a coverage clause. This prior regulatory acceptance formed Domino's reasonable basis for relying on the agreements during the relevant period. The Court’s contradictory finding raises potential compliance and interpretation issues across the franchise sector.

The judgment highlights the need for precise drafting, interpretation, and communication of certified enterprise agreements covering franchise operations. As franchisor, Domino's operates within a complex regulatory framework requiring clear guidance to franchisees on employment obligations. The Court’s finding of misleading representations about agreement coverage underscores the importance of ensuring compliance with both consumer and employment laws within franchise relationships.