Domino's Pizza Enterprises Ltd (DMP.AU) saw its shares plummet 5.62% intraday following a negative Federal Court ruling related to a class action lawsuit.

The sell-off was triggered by a court judgment that found Domino's had misled its franchisees by instructing them to underpay thousands of delivery drivers and in-store staff under obsolete employment agreements. The court ruled that the company's conduct was "objectively wrong" as it failed to apply the applicable Fast Food Industry Award, which carries better terms and conditions.

The class action, filed in 2019, covers workers employed by Domino's Australian franchisees between 2013 and 2018. The court's decision opens the company up to potential significant financial liabilities from claims for loss and damage, which will require a further hearing to determine.