Inner west stalwart Ray Reilly is battling a tsunami of criticism of his group and himself, following a muck-raking article in News.com.au claiming “ongoing and systematic” wage theft from minimum wage workers.
Monday’s story – sensationally headlined “Sydney pub empire underpaid staff by $100k” – has seen re-prints across the country, and scores of people taking to social media condemning the group over the one-sided portrayal of events.
Mid-2018, the Reilly Group paid out over $102k to 31 staff, following a collective letter of demand received from them outlining incorrect rates of pay – mostly at Reilly’s much-lauded The Henson, in Marrickville.
The article spoke of former employee Myf Nizette, also a former employee of Merivale in 2017, and for hospitality union United Voice, who had a position as a bottleshop attendant at The Henson for a few weeks before noticing she wasn’t receiving the correct rate of pay.
Nizette reportedly spoke to other employees on the matter, for which she was cautioned by management regarding employees’ private business. Conversations led to involvement by other staff members, similarly claiming to be receiving the incorrect rate.
Speaking for the Reilly Group was lawyer Dion Manca, who provided News with responses to accusations, and details on the company’s policies, including the exitance of the employee manual, which outlines many of the questions around managing problems.
Explaining that all workers are employed on Grade 1 of the Award during their three months introduction and training, this was mis-interpreted as applying an ‘Introductory Level’ of pay – a formal classification applying to newcomers to the industry.
Ray Reilly came to Australia around two decades ago as a backpacker, finding promise in the hospitality industry, working up to owning his first pub – Surry Hills’ Trinity Bar. In 2013 he bought the closed and de-licensed Henson Park Hotel, working for several years to have its hotel licence reinstated and building what has become a legend of the precinct, widely known for its family-friendly atmosphere, no pokies, extensive charity work* and locally-sourced produce.
The Henson was voted Time Out magazine’s Pub of the Year in 2012, while it was technically still a restaurant. This origin further complicated the situation, as staff began on a restaurant award. Not having gaming machines, it was believed no staff were to be on Grade 3 casual pay.
The Hospitality Award in NSW specifies 41 different categories of staff, with most frontline employees classified as Grade 1, 2 or 3, with increasing hourly rates, based on the type of duties performed.
While there is no denying all staff should receive their correct pay rate, it is worth noting that Grade 2 awards only 3.8 per cent more money per hour than Grade 1, and Grade 3 a further 3.5 per cent increase.
The $102,796 back-paid to employees is a total calculated over four years – since The Henson was still a restaurant. Last year Reilly Group paid more than $4.5 million in wages to its staff of 105 workers and scores of ancillary staff across its three pubs.
In response to the accusations of underpaying staff by putting them on the wrong award, the Group says it was an “honest mistake” that was identified, and outstanding money paid in full – plus interest – and not a case of systemic underpayment of employees.
“The misclassification of employment of the affected employees was an oversight and error, which arose due to a misinterpretation of the relevant Award conditions, which was swiftly investigated, reviewed (including professional independent review) and rectified,” provided Counsel.
The independent review, conducted in association with the AHA’s Hospitality Legal found the amount owing to staff to be $59,900. This amount was disputed by the 31 employees submitting the claim, requesting over $100k, which was not disputed and subsequently paid.
Ms Nizette, reported as having been terminated as a result of her complaint, was in fact made redundant because a full-time attendant was required for the bottleshop and she was only available two shifts per week. Disputing the News version of events, Reilly Group stated no casual staff were hired in the bottleshop following her termination.
Other issues raised, such as the practice of making staff stay back as de-facto security and more salacious accusations, were responded to with statement that “complaints, enquiries or allegations” on such matters had not been raised with the Group, and outside the company’s ability to comment.
News’ article did not choose to mention the group’s high staff retention rate, that some staff have been employed for ten years, ongoing training and development, or sponsorship of migrant workers, nor Manca’s statement over the underpayment:
“The staff payment error was an isolated issue, promptly and satisfactorily addressed and any attempts to somehow leverage that error so as to paint a picture that Reilly Group operates venues that are unfair and unsafe for workers is completely false and inappropriate.”
While possibly guilty of being naïve in the pay errors, Reilly group reports it has overhauled its procedures and processes, and management admits at times they are still “learning as we go”.
The settlement to staff initially came with request to agree to not discuss the matter, including speaking to media. The workers refused, and the confidentiality was not pursued.
But in the wake of the ruling against and media frenzy over Merivale’s controversial EBA, some paid-out former Reilly Group staff saw opportunity to put in the knife.
Comments from armchair warriors and even patrons barred from the pubs have stained Facebook pages and forums, while the group’s three venues are being hammered by patrons tainted by grapevine news.
Marrickville local group member Joe Cohen observed “this pub group are scumbags ripping off already lowly paid Hospitality workers” and asked Sydneysiders to boycott the businesses, prompting responses such as “I’ll never spend a dollar at these pubs”, and “Shameful. Won’t be going to the Henson or the rest anymore”.
Thankfully some had the foresight to question what they had heard, Lissa Sharp offering “Since when did we start believing in an article in newsdotcom … & in its entirety. I think they deserve better than the firing squad” – only to be rebuked and forced to apologise by others.
Far from an entitled businessman getting rich by swindling a dollar from beleaguered young staff, Reilly has quietly become one of the most actively community-minded publicans in the industry, sponsoring literally dozens of initiatives, including Ray and five other senior staff sleeping on the streets to raise over $20k for Newtown Community Centre’s homeless appeal.
A harangued Ray Reilly told PubTIC he is trying not to let the ordeal get to them.
“This happened last July, we held up our hands and realised we were wrong. Our only error was not being smart enough to know the award inside out and possibly growing too fast too soon.
“We know a lot more now. We engaged with independent and experienced professionals to help us with this and we continue to work with them and seek out ex-employees of the businesses.
“My team have taken it hard, however we know that what we do in business and in life is only ever good. We are hospitality true and true. It’s in our blood. All we do is look after people day-in and day-out, and we will continue to do so.”
*Reilly Group is involved with charities: Reclink, local schools, Newtown Mission, Maggies Rescue, Addison Road Community Centre, Stepping Stone House, Harp to Henson charity ride, Shitbox Rally for cancer research, Boomerang Bags, and more.