Merivale sued for $129 million in ‘unpaid wages’

Pub baron Justin Hemmes’ billion dollar empire is accused of underpaying staff up to $129MILLION as it is claimed one pastry chef worked an extra 800 hours a year for no pay

  • Merivale being sued for six years of backpay allegedly owed to 8,200 workers
  • Lawyers claim workplace agreement that slashed pay and rates was never valid
  • Staff should instead have been paid industry award that is 20 per cent higher
  • Regulator rejected it in 2009 calling it unfair but ‘wrongly’ reversed decision 
  • Merivale says it ‘firmly believes there is no basis for any action’ and will fight suit

Massive pub conglomerate Merivale is being sued for $129 million in unpaid wages to thousands of staff over six years.

A class action lawsuit filed in the Federal Court on Tuesday claims the booze empire owned by Justin Hemmes underpaid up to 8,200 workers.

Canberra law firm Adero alleges Merivale used a workplace agreement slashing wages and penalty rates that was never validly approved by regulators.

It is alleged staff should have been paid the industry award and are owed backpay for the past six years – the longest a claim can be made under the Fair Work Act.

A class action lawsuit filed in the Federal Court on Tuesday claims the booze empire owned by Justin Hemmes (pictured) underpaid up to 8,200 workers.

Mr Hemmes (pictured with Kate Fowler), who owns 70 pubs, bars, and restaurants across Australia, cancelled the agreement in January and now pays all staff award rates

Mr Hemmes (pictured with Kate Fowler), who owns 70 pubs, bars, and restaurants across Australia, cancelled the agreement in January and now pays all staff award rates

The lawsuit further claims that even if the agreement was valid, salaried chefs were owed overtime for regularly working 55-hour week.

One pastry chef at Merivale’s French restaurant Felix cited in the lawsuit was allegedly paid paid $48,000 a year for a 38-hour but rostered on for about 55 hours a week. 

Merivale’s alleged underpayment issues first came to light last year when it was revealed it paid 3,000 staff under the 2007 agreement that paid 20 per cent below award.

Mr Hemmes, who owns 70 pubs, bars, and restaurants across Australia, cancelled the agreement in January and now pays all staff award rates.

However, Adero claims the Workplace Authority wrongly let the agreement stand 10 years ago and it was never valid in the first place. 

Documents cited in the lawsuit show the regulator rejected the agreement in 2009 as it failed the ‘fairness test’ put in place by the Rudd Government.

Merivale's alleged underpayment issues first came to light last year when it was revealed it paid 3,000 staff under the 2007 agreement that paid 20 per cent below award

Merivale’s alleged underpayment issues first came to light last year when it was revealed it paid 3,000 staff under the 2007 agreement that paid 20 per cent below award 

Merivale carried on paying staff bargain basement rates for a decade after the 2007 agreement was controversially approved

Merivale carried on paying staff bargain basement rates for a decade after the 2007 agreement was controversially approved

The test was meant to undo the Howard Government’s WorkChoices laws and prevent deals like Merivale’s that exploited workers from being struck.

Workplace Authority originally threw out the deal meant workers from 2007 needed to be backpaid to the award, but Merivale instead threatened to go to court.

The regulator then rowed back its rejection on the grounds of Merivale’s unspecified ‘administrative issues’.

‘You outline significant administrative issues experienced by your client and this provides grounds to rescind the original notice advising you that the agreement does not pass the fairness test,’ acting director Penny Weir wrote. 

This was despite the same email to the company’s lawyers informing them the decision couldn’t be changed under relevant legislation.

On June 10, 2009, it approved the agreement and Merivale carried on paying staff bargain basement rates for a decade. 

Workplace Authority originally threw out the deal meant workers from 2007 needed to be backpaid to the award, but Merivale instead threatened to go to court

Workplace Authority originally threw out the deal meant workers from 2007 needed to be backpaid to the award, but Merivale instead threatened to go to court

Merivale said it had not yet been formally served with the lawsuit and therefore only had 'scant details', but would fight it anyway (pictured is one of Merivale's pubs)

Merivale said it had not yet been formally served with the lawsuit and therefore only had ‘scant details’, but would fight it anyway (pictured is one of Merivale’s pubs)

The company said it had not yet been formally served with the lawsuit and therefore only had ‘scant details’, but would fight it anyway.

‘Merivale firmly believes there is no basis for any action,’ it said. 

‘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.’

The company claimed it could not be liable if the regulator incorrectly approved the enterprise agreement 10 years ago. 

Adero said more than 200 current or former employees had expressed interest in joining the class action so far. 

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