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Merivale hit with $129 million class action for alleged wage theft

Left: Justin Hemmes, the founder of Merivale hospitality group. Right: Ivy. (Source: AAP, Merivale)

Canberra-based law firm Adero Lawyers is suing pub empire Merivale for $129 million for allegedly underpaying up to 8,200 workers over the span of several years.

The class action lawsuit, filed to the Federal Court on Tuesday, claims that the hospitality group’s WorkChoices agreement – which meant it wasn’t required to pay staff overtime or full penalty rates – was never approved by regulators, according to the AFR.

And even if the agreement was valid, Merivale’s chefs are still owed overtime for working 55-hour weeks, the action alleges.

Staff should have been paid the industry award and should be backpaid up to six years, which is the longest amount of time a claim can be made under the Fair Work act, reported the Daily Mail.

“The claim is indicative of an industry-wide problem,” said Adero principal Rory Markham.

“Employers have built empires and expanded their property portfolios on the back of employees being paid below-award wages.”

The Merivale group consists of more than 70 restaurant, pub and hotel venues.

Adero was accepting class action registrations from as early as January this year for current or former employees who were not paid their correct rates or entitlements.

The Fair Work Commission terminated Merivale’s outdated EA agreement – which expired on 21 December 2012 – in late January this year.

Now, the law firm is claiming that the regulator at the time, Workplace Authority, incorrectly approved the agreement in “curious” and “troubling” circumstances and that it was never valid to begin with.

‘No basis for any action’: Merivale responds

SMH reported that Merivale has not been formally served with the lawsuit but would nonetheless fight it.

“Responding without service of any class action documents is difficult, however Merivale firmly believes there is no basis for any action,” Merivale spokesperson Sue Cato said.

“From the scant information at hand, the only basis for this claim seems to be that the Federal Government regulator is alleged to have got it wrong when it approved the enterprise agreement some ten years ago which cannot be Merivale's fault.”

She added that she did not expect that employees would benefit from the class action.

“Merivale has always acted with the interests of its workforce squarely in mind and does not anticipate that its employees will in any way benefit from these proceedings,” she said.

“Merivale regularly reviews its compliance regarding employee entitlements and has had them independently assessed by external parties.”

A spokesperson from the Federal Court told Yahoo Finance that there were no documents in the court system, which could mean the documents have been lodged but not yet filed.

Yahoo Finance has reached out to Adero Lawyers and Merivale for comment.

In the 2018-19 financial year, the Fair Work Ombudsman clawed back over $40 million in stolen wages for underpaid workers.

Corporate Australia has been reeling from several instances of gross and systemic underpayment amongst some of Australia’s most recognised brands and companies.

In other instances of underpayment in hospitality establishments, former MasterChef judge George Calombaris and his fellow judges Matt Preston and Gary Mehigan were dropped from the show earlier this year after Calombaris was embroiled in a highly publicised wage theft scandal centering around his group MAdE Establishment.

Rockpool bar and grill chief Neil Perry was also forced to backpay his own staff $1.6 million.

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