Justin Hemmes’ pub empire Merivale uses a system logging every worker’s unpaid hours
A billion-dollar pub empire has such a sophisticated system that it even logs how many hours workers do unpaid, a landmark case alleges.
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The billion-dollar hospitality empire run by Sydney pub tsar Justin Hemmes uses a sophisticated system that specifically records every single hour of work its staff performs without getting paid.
These records will form a key part of a class action being brought against Sydney hospitality group Merivale, which 235 former and current employees have already signed up to, alleging long-term, “systemic” and widespread underpayments.
Employment law firm Adero, which is bringing the case against Merivale, estimates there are 8000 former and current employees who could be eligible for compensation.
The explosive $126 million claim centres in part on allegations that permanent, salaried staff were paid for 38 hours a week of work but expected to put in at least 50 to 55 hours with no extra pay.
And news.com.au understands Merivale’s own time and attendance system, in use across its venues, allegedly recorded the sheer extent of underpayments.
In late 2016, the company rolled out new software called Kronos, which is an automatic employee time-tracking program that works as a time card, at its 70 venues spanning pubs, clubs and restaurants.
It allows staff to “thumb on” via an electronic thumbprint scanner at the start of a shift and “thumb off” when they leave, with their shift details recorded.
The end result is a detailed overview of every employee’s hours, broken down further by ordinary pay, overtime, days in lieu taken and so on.
One category in the system is “hours not paid”.
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A Kronos time card obtained by news.com.au shows one chef’s summary over a three-month period, revealing they worked 120 hours without any form of compensation.
That chunk of free labour represented one-third of the total hours that chef worked during that time frame.
The worker received an annual salary of about $60,000, meaning they missed out on about $3900 before tax for the unpaid hours worked.
Adero litigation co-ordinator Nicholas Driver said Merivale’s payroll system was sophisticated.
“These guys, I’ll give them credit, they’re very well-organised and well-run,” he told news.com.au.
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Accessing the back-end of Kronos, managers can see how many hours any employee has put in – and which of those were unpaid.
“This shows that they didn’t leave anything to chance,” Mr Driver said.
“Adero is unsure how Merivale can defend claims of hours work but not paid given employees logged their shift start and finish times with fingerprint scanners at their workplaces.”
A Merivale spokesperson strongly denied all allegations and said the company “regularly reviews its compliance regarding employee entitlements”.
“Full time Merivale employees have been paid annualised salaries with hours averaged over 52 weeks as permitted under the enterprise agreement that applied to Merivale employees from 2007 until 2019, and in accordance with the Hospitality Industry (General) Award 2010 since the agreement was terminated by consent,” the spokesperson said.
“Merivale categorically denies that any of its employees have been required to work unreasonable additional hours against their will.
“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.”
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Antonio Chiamenti worked at Merivale for five years as a chef at its flagship Coogee Pavilion venue in Sydney’s eastern suburbs.
He told news.com.au the timekeeping system detailed every single hour that was worked, including those not compensated.
“But on the pay slip you get, it says 38 hours worked. They just change it,” Mr Chiamenti alleged.
News.com.au has also viewed pay slips for employees that note the total hours worked in a week as 38.
Mr Chiamenti said weekly rosters were approved on a Sunday evening and then posted.
“It’s 50 to 55 hours for each chef, always, at a minimum,” he said. “Then the pay slips are changed (to say 38 hours).”
Adero has repeatedly requested these time card records for its lead plaintiff to establish an alleged pattern, but Merivale has refused.
The firm now hopes the Federal Court will compel the company to hand them over at a directions hearing on Thursday.
A Merivale spokesperson said the company would vigorously defend the class action, which it described as baseless.
On the eve of the first hearing this week, news.com.au has exclusively obtained a cache of documents, from rosters allegedly showing 16-hour workdays to internal time cards tracking the number of unpaid hours worked.
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The second and most significant part of the case relates to the employment agreement covering every Merivale worker, permanent and casual, which Adero argues was terminated in 2009 and stopped operating from that date.
“If the court agrees with our argument that the agreement shouldn’t have been used, then all Merivale hospitality workers since 2014 will be entitled to compensation,” Mr Driver said.
Adero calculates that number could be as high as 8000 workers over a six-year period – the maximum claimable period for damages under the Fair Work Act – with each entitled to between $3400 and $10,900 per annum, Mr Driver said.
Originally published as Justin Hemmes’ pub empire Merivale uses a system logging every worker’s unpaid hours