In the wake of a succession of underpayment scandals in hospitality, Justin Hemmes’ Merivale group continues to be targeted in a trial-by-media class action claiming millions will be owed in backpay.
News of the proposed class action by a Canberra-based law firm first emerged when it filed documents in the Federal Court on Christmas Eve 2019.
Within days the accompanying media statements had made their way into the Sydney Morning Herald, The Australian, the Financial Review, and even international news services such as Yahoo and Britain’s The Daily Mail. A revised version appeared today in News.com.au.
Part of the claim centres around allegations that fulltime employees, mostly chefs and managers, were paid for a contracted 38-hour week but required to work an average of 55 hours. The Award stipulates overtime is to be paid beyond 38 hours worked.
But the more significant aspect of the Action relies on potential judgement that the group’s employment agreement (terminated in January 2019), covering all its workers, was in fact invalid since 2009.
The group’s former Work Choices agreement set standard rates of pay and other entitlements, including public holidays.
The agreement was reportedly terminated in 2009 by the Workplace Authority, now Fair Work, but this was appealed by Merivale and the termination subsequently withdrawn.
Lawyers now suggest the Authority’s reverse decision wasn’t legally valid, based on a complex technical legal point.
If proven correct the suit could expose Merivale to backpay for current and former staff back to 2014, six years being the statute of limitations on such things.
The law firm estimates as many as 8,000 workers could be eligible, and each entitled to roughly $3 – 11k compensation, adding up to a sizeable settlement.
To date 235 former or current employees are reported to have registered.
The firm is understood to be working on a “no win no pay” contingency basis, following its own extensive due diligence. Some reports suggest there may be litigation funders involved, who will look for a major slice of any settlement obtained.
PubTIC sought clarity on the involvement of financing angels, but received no reply from the firm.
The accusations against Merivale – still before the Kangaroo Court of Australian media – touch on the already topical matter of staff underemployment, frenzied by the coverage of the recent collapse of George Colombaris’ Made Establishment business, as well as a backpay judgement against Neil Perry’s Rockpool Group.
Many suggest the sheer complexity of Australia’s casual awards system contributes to the problem, but given the increasing disparity between award pay rates in Australia versus comparable countries, such as the UK*, it might also be argued the rates are at times unrealistic in a cut-throat industry struggling with tight margins. Closed venues employ no-one.
There is also criticism of penalty rates and inflexibility in the awards that can make employing workers cost-prohibitive at some times, notably holidays and weekends, when young workers are often more than willing to work, taking opportunity around study or other employment.
A statement received today from Merivale notes fulltime employees were paid annualised salaries with hours averaged over 52 weeks, as permitted under both its former agreement and the Award.
The document stresses the group is not aware of instances of employees suffering physical or mental injury as a result of working excessive hours, and takes thier welfare seriously.
“Merivale has always had regard to its employees’ health and safety and their personal circumstances, including any family responsibilities when determining reasonable hours.
“Employees have always been permitted to refuse additional hours where such hours would be unreasonable.”
When Merivale’s work choices agreement was ratified in 2009 Hemmes’ was gearing up for stage two of ivy. Since then the group has grown steadily to count more than 60 premises, employing thousands of workers in what is universally acclaimed as a world-class hospitality company.
A spokesperson for Merivale today told PubTIC they have still not received the details of the headlined class action reportedly filed in December.
