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“Wage theft”: Merivale faces class action for grossly underpaying workers

Left: The Ivy Pool Club, one of the 70-odd venues owned by Merivale Group. Right: Merivale CEO Justin Hemmes. (Photos: Merivale, Getty)

Pub empire Merivale Group is being hit by a class action after it significantly underpaid its employees thousands of dollars for several years.

On Monday, the Fair Work Commission (FWC) terminated the hospitality giant’s long-expired 2007 Employee Collective Agreement that meant it was not required to pay almost 3000 staff overtime or full penalty rates for nearly a decade. The employee agreement (EA) expired on 21 December 2012.

Canberra-based law firm Adero‘s principal Rory Markham told the AFR the firm was accepting class action registrations from current and former Merivale employees to claw back any underpayments.

“We have received a surprisingly high level of interest from Merivale employees expressing their frustration with low, flat rates of pay while working predominantly on nights, weekends and public holidays,” Markham said.

Many workers were left “significantly worse off than they otherwise would be under the hospitality modern award,” he added.

The termination will take effect on 4 March, a request by Merivale and granted by the FWC to allow it to transition to the industry award rates.

An application for the termination of the agreement was put to the Fair Work Commission by two former Merivale staff alongside trade union United Voice, who campaigned on their behalf.

Business practice under review

Merivale, which owns some 70 pubs, restaurants and venues across Sydney such as The Ivy, The Establishment and Coogee Pavilion, has said it will have to review its “business practices” as a result of the EA termination.

“Merivale will need to consider the viability of business practices which while viable under the EBA, may not be viable under the modern award,” Merivale group human resources manager Kate Tones said in a submission to the FWC.

“Given the differences between the operation of the two systems, and the functional adaptations required by this transition, there will be a number of administrative and operational changes for Merivale and its staff,” Merivale said in a separate statement.

Angry Twitter users jumped on the news immediately, pointing out the unfairness of a multi-million dollar business empire that underpaid its workers.

“Empires are unviable m8,” tweeted Alison Pennington, a research economist for the Australia Institute’s Centre for Future Work. “Piss off & backpay yr wrkrs on yr way out!” [sic]

United Voice’s submission said one employee was underpaid $6 an hour on Saturdays, $10 on Sundays and $25 an hour on public holidays.

A different employee was paid $3,100 less than the award rate, which came to 22 per cent of his salary.

“The outdated industrial conditions in the Merivale agreement preyed on vulnerable young workers, paying them sub-award rates,” said United Voice national secretary Joanne Schofield.

“It’s only right that Merivale has agreed to adopt the provisions of the hospitality award and pay employees what they should be earning under current award rates – and we remain disappointed that it took the threat of legal action to do so.”

The Australian Unions tweeted: “Spare us the chicken little act.

“If your business model is dependent on underpaying people for years, perhaps it’s not a very well run business.”

Merivale is estimated to be worth $951 million to Hemmes family, who has owned it for more than 60 years. It’s led by multi-millionaire CEO Justin Hemmes who is alleged to have a personal net fortune of $300 million and last year cracked through to the 2018 AFR Rich List.

Some were indignant about the injustice and wanted to take matters into their own hands.

Others simply ridiculed the blatant hypocricy.

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