Order up: Cheese, no surcharge

New Zealand pizza lovers will not have to fork out extra dough for a pizza on Sunday, despite Domino’s enforcing a surcharge on that day across the ditch.

Domino’s Pizza has begun paying its Australian workers an extra 25 per cent when they work on Sundays, which the fast-food giant claims will be paid for by a surcharge on orders.

The company says the 10 per cent surcharge, which will be applied only on Sundays, is aimed at helping to absorb the costs of the wage increases, as it tries to bring its pay rates in line with industry practice.

However, Domino’s Pizza New Zealand communications manager, Angela Hayes, said the surcharge did not apply in its New Zealand businesses.

In a statement to the Sydney Morning Herald, the company said the pay increase and surcharge were among a number of models successfully tested on customers, and agreed on by franchisees.

The change also comes as franchisees are also coping with rising costs and mandatory store improvements.

Domino’s had been working towards introducing penalty rates for the more than 12 months leading to concerns about the impact on franchisee profitability, the Sydney Morning Herald reported.

In July, Deutsche Bank found that introducing penalty rates could reduce Domino’s profitability by 24 per cent, noting that Pizza Hut and McDonald’s paid 7 per cent higher base rates.

Domino’s dismissed the report as ‘‘inaccurate’’ and said it was done without its input.

Staff have now been operating under an enterprise agreement more than three years out of date, leading Domino’s to bring in ‘‘transitional’’ wage increases while it negotiated a new agreement.