‘One step from being a brothel’: Sex, drugs, harassment alleged in Ivy penthouse

A Herald and Good Food investigation reveals a top Sydney restaurant group allegedly ousted female staff after they reported sexual assaults and encouraged on-duty sex and drug use.See all 16 stories.

Until now, Level 6 has kept its secrets. For more than a decade, the most exclusive club in Merivale’s hospitality empire entertained celebrities, scions living off their father’s fortune, and the company’s own top executives.

The poker table was full, Ruinart Rose champagne flowed, and members could have their pick of dishes from half-a-dozen award-winning restaurants including Uccello, Felix and Bar Totti’s in the glamorous Ivy precinct in the Sydney CBD.

Staff said there were only two areas covered by CCTV, the bar and the poker table, so the rest of the penthouse, which included a spa, sunken lounges and a terrace overlooking the Ivy pool could be a hedonist’s playpen – a claim the company denies.

Now, four former Level 6 employees say the venue created a toxic environment that exploited women, encouraged them to have sex with customers, perpetuated sexual harassment and facilitated frequent drug use.

Level 6 was “one step away from being a brothel”, said one Merivale manager.

Inside the Ivy penthouse’s Level 6.

The private members’ club became the penthouse playground for Merivale executives who oversaw the hospitality superpower’s growth to 70 venues down the east coast, from Newport on the northern beaches to Lorne in Victoria.

The Sydney Morning Herald, The Age and Good Food have spoken to staff from across Merivale’s venues including the Ivy, Hemmesphere, Mr Wong’s, Establishment, Uccello, Totti’s and Queen Chow. They say the company’s cavalier attitude to sex, drugs and safety has put them at risk, while the organisation’s size and its domination of Sydney hospitality have kept staff silent.

“They hire people very, very young. There are thousands of 18- to 21-year-old girls out there who are young, naive and sucked in by Merivale,” the former manager said.

“[They are] ushered into the cult and then … bad things start happening, and they feel like they can’t say anything.”

This masthead put a detailed list of questions to Merivale. In response, it has appointed one of Australia’s leading human rights and discrimination lawyers, Kate Eastman, SC, to lead an investigation into allegations of misconduct at the company, declaring if any are true, it sincerely “regrets any distress caused”.

The company rejected claims it had created an environment that exploited women and put its staff in danger.

“In all hospitality businesses, including Merivale’s, incidents occur involving both patrons and staff. There is no denying this,” a spokesperson said. “However, Merivale handles complaints that are made about such incidents in accordance with its policies and procedures as well as its legal obligations.”

Merivale is the latest major hospitality group to come under scrutiny after The Sydney Morning Herald, The Age and Good Food published an investigation into the Swillhouse Group in August that revealed claims it had ignored allegations of sexual assault and harassment at its venues made by five former bartenders and waiters.

Inside Level 6

Level 6 began with lofty ambitions. The hosts were trained to pour champagne and select cigars to deliver top hospitality to well-heeled clients who paid $10,000 a year for the privilege. Behind the lounge, a photo of a half-naked woman in suspenders set the tone: “Dreamlover” was tattooed across her chest. The poker chips were emblazoned with a woman in red lingerie bending over for the club’s clients.

The glamorous hand-picked staff took home Gucci handbags and up to $600 in tips for a couple of nights’ work from members made up almost entirely of wealthy male customers in construction or finance. In return, bartenders and hosts in their early 20s were repeatedly asked to accommodate their advances.

“It was like a strip club with no one taking off their clothes,” said one former Level 6 staff member.

“It was flirtatious, it was affectionate, it was handsy,” said another. On Instagram, guests and staff occasionally posted about their experiences at the venue.

But now staff claim bad behaviour escalated after 2013, when a strip pole was introduced and drugs became a mainstay of any exclusive evening.

“We were expressly told that if a customer wanted to buy us a drink, we couldn’t refuse,” one former host alleged.

Over time, staff say the members became more entitled and belligerent, as did some Merivale managers who were part of the company’s growing portfolio.

“It’s like the water boiling the frog,” said one former host. “Things happen slowly and then you don’t realise it at the time, but when you look back you think: what was going on there.”

Like a dozen other Merivale employees this masthead spoke to for this story, the former host spoke on the condition of anonymity because of fears of retribution from a company that has become part of Sydney’s DNA.

“They wield such influence and power in the industry,” said one host. “They make you feel as though you are part of the family. So once you’re in, you’re in.”

They say the company and some of its managers frequently put them in vulnerable situations and drove a top-down culture that made its leaders and high-flying clients untouchable.

The experience of employees across Merivale is not uniform. The company has employed more than 50,000 people over 30 years from takeaway chicken shops to high-end restaurants.

In interviews with employees, guests and models who frequented its bars and restaurants as far back as 2008, some enjoyed their time at Sydney’s largest hospitality company, including what they saw as unofficial perks: cocaine, partying and access to some of the country’s wealthiest people in its most celebrated venues.

But the power imbalance between older men and younger women deepened as the company grew into a billion-dollar behemoth, filtering down from the senior levels.

Former Merivale bartender James Henderson.Credit: Louise Kennerley

‘It’s disgusting’

James Henderson, a bartender at Ivy and Bar Totti’s, resigned from Merivale in August.

“It’s disgusting,” he said. “They use women as objects.”

Henderson claimed the venues groomed female staff and customers for VIP entertainment. The 21-year-old said he had been offered cocaine by a manager and that he had witnessed another pull out drugs at the Slip Inn bar with no consequences. Henderson alleges the company failed to keep him safe after he was attacked by a guest at a Merivale venue.

In an email to the company’s human resources department in August, Henderson said staff were scared to speak out.

“The culture at Merivale [is that] you can’t report anything to the police, otherwise you would be terminated,” he wrote.

Merivale rejected the claims made by Henderson, describing him as “well known to the human resources department” and said that it had extensive and rigorous training in place that encouraged incidents to be reported to management and the police.

But when police were preparing to enter the Ivy clubs, downstairs managers would send a “blue lights” message over an internal WhatsApp chat or say “code blue” over the radio to warn Level 6 staff that police were imminent.

“We used to have to send out messages in the management group chat if police were present so that whatever was going on in Level 6, they could hide it,” said one former Merivale manager.

The company said alerting staff to police was “standard industry practice”.

“Every team member and especially our managers have duties under the law to assist police,” a spokesperson said. “They cannot do so if they are unaware of their presence on site.”

‘Difficult to say no’

Level 6 managers would also warn staff when Merivale managers were in the venue, drunk and high.

Some staff would be open to partying, but others were not.

“You’d sort of be pressured into drinking with them. It would be very difficult to say no in that situation,” one host said.

The managers would oscillate between Level 6 and the nearby cocktail lounge, Hemmesphere.

The interior of Hemmesphere.

“[One] would grab you and throw you on the couch and put his hand up your skirt,” the host said.

“He went underneath my clothes and grabbed my underwear.”

The host said a manager asked her: “Why have we never f---ed?”

“I was disgusted. I couldn’t believe it. This is my place of work and this is happening. You certainly didn’t feel like you could do anything about it.”

In a separate incident, another manager allegedly forced himself onto the host so hard it winded her.

“It was awful,” she said. “It was a bit of a boys’ club and their attitudes towards women just got worse. They just felt like they could do whatever they wanted to do, and the girls were there for their kind of entertainment.”

In one incident at a manager’s party, two former Level 6 hosts said they were asked to line up in lingerie with half a dozen other women, sit on the manager’s lap, snort a line of cocaine and tell him how much they were worth before he paid them in cash for the night’s work.

The incident was corroborated by a third staff member who was also at the party.

“He’s got a girl in his lap and he is asking each of us, one at a time, how much we think we were worth. Then putting a bunch of notes in your hands like, ‘OK, you go, bye, next’.”

On another occasion, a manager allegedly took two women home, locked them inside his house and pressured them to take cocaine.

“He bluntly says we are not allowed to leave, girls would pay to be in this position,” one host said the manager told her.

When they tried to leave, he ran in front of their car to stop them. “He comes running out, throws himself on the car and says, ‘No one is leaving this house’,” the host said.

“He was trying to drag me into the bedroom, and I was in a very vulnerable position, being in a house with someone refusing to let us leave.”

They escaped when he passed out.

Merivale said it took the allegations extremely seriously.

“Merivale has no records of these allegations of misconduct,” a spokesperson said. “The several incidents alleged by The Sydney Morning Herald are largely historical and date back as far as 2011, and with the limited information that has been provided to us, we have been unable to properly investigate the allegations.”

Level 5

Below Level 6 is Level 5, a carbon copy of the Ivy penthouse above it. Level 5 would occasionally operate as a function area but also as a private party zone for Merivale managers and special guests.

“You would enter the room and a manager would be having sex with, like, three girls on the couch, and just tell you to put the drinks on the table,” one host said.

“I walked in and he would be having sex with someone in the shower, asking me to take an order for something.

“Next week, they would have someone being brought up with him to Level 6 for drinks. And that was the next flavour of the month.”

The female guests and hosts accompanying the manager would get so drunk that one Level 6 staff member would occasionally position themselves in Level 5 to make sure they were OK.

“You would go down and the girl would be really drunk and quite young. So a few times I would place myself in the room or just be really annoying to hang around to make sure that nothing would happen,” the staff member said.

Merivale said it had no record of these allegations of misconduct.

“We deal with any allegation with an open mind and the objectives of getting to the truth and taking appropriate action,” a spokesperson said.

When managers regularly arrived for long lunches at Merivale venues accompanied by younger women, the kitchen would joke about their age disparity.

“They’ve found another 20-year-old,” said one chef. “It was noticed. It was a pattern. It was something that was joked about more than anything among the men in my kitchen.

“I just remember it always making me feel quite uncomfortable because they always seem to be quite enamoured by power and money. I just always feared for these young women who were quite possibly being manipulated into sex.”

SafeWork NSW is now investigating Merivale after the ABC published claims in September that it condoned drug use at its venues, failed to adequately respond to allegations of sexual assault and screened uncensored CCTV footage of people having sex at an awards night.

Merivale said it had no record of the incidents described by the ABC, that it was lawful for the company to capture CCTV footage, and there “can be no reasonable expectation of privacy for any patron attending”.

Swillhouse, whose chief executive Anton Forte stepped aside on Friday, is also under investigation by SafeWork NSW.

One employee, who worked at Merivale and later at Swillhouse, said Sydney’s second most prominent hospitality group was a terrible company.

“But Swillhouse is such a small fish in comparison to Merivale,” she said.

The former employee claimed staff would be encouraged to take VIP clients to Level 6 while young women would be picked out of the line at venues for special treatment. She said staff were terrified of Merivale’s leaders, driving a culture that led many of its employees to turn a blind eye.

“If they’re serious about safety, it’s clear to me and everyone who works in hospitality that they’ve lost our confidence, they lost it a long time ago. They are the problem, and the only solution to fixing it is if they resign,” she said.

“I just personally don’t want these men [at Swillhouse and Merivale] continuing to run these companies in a way that puts other women in danger. I was very young when it happened. I wish I had done more.”

A hospitality giant

Merivale began as a small, family-owned millinery and fashion retailer founded by husband and wife team John and Merivale Hemmes in 1957. It has since become the most powerful hospitality group in Sydney.

Justin Hemmes, who took over the company from his parents in the mid-1990s, led an aggressive expansion into the hospitality sector with the acquisition of several Sydney pubs, including the Slip Inn and The Grand Hotel. The Merivale Group portfolio has now grown to over 70 venues with an estimated worth of more than $3 billion and a combined total of 17 chefs’ hats awarded by The Sydney Morning Herald Good Food Guide in 2023.

Justin Hemmes has built an extensive hospitality empire.Credit: Edwina Pickles

As the group grew in prominence, it threw its weight behind political issues, advocating for marriage equality and the end of lockout laws. Hemmes has also made significant financial contributions to political parties, donating $100,000 to the NSW Liberals and $300,000 (from the company Hemmes Trading) to the Liberal Party in 2021-22. In 2019, he hosted a $3300-a-head fundraiser for the party at his Vaucluse mansion, The Hermitage. Last year, Liberal senator for NSW Andrew Bragg revealed the Christmas party he was hosting was sponsored by Merivale. The Herald is not accusing Hemmes of sexual misconduct.

Merivale said that like many other employers, it had progressively improved its policies regarding appropriate workplace behaviours since 2011 and that there “was no measure upon which we could be sensibly described as a rogue hospitality operator”.

“Merivale has created an inclusive, diverse and respectful workplace environment for our staff, as well as for our customers,” a spokesperson said. “We are committed to Merivale being a place where respect is the centre of our culture. The allegations put to us by the SMH in no way reflect the fair and respectful culture we strive for.”

‘A can of worms’

The standards set at Level 6 filtered through the rest of Merivale’s establishments, particularly in the Ivy precinct, where staff said “night-time economists” would scour the restaurants and bars to select young, good-looking female customers to join private parties hosted by older men.

One Merivale patron, Jess Helinski, told the ABC she was mistakenly presented as a sex worker to VIPs after being rushed through the Ivy line by a Merivale host.

Merivale said it rejected allegations of “any Merivale employee scouring restaurants and bars to select patrons to join private parties hosted by older men or for any other purpose”.

In 2018, an assistant manager of Ivy Pool Club told a senior manager she had been groped under her skirt by a VIP guest.

When the senior manager went on to raise concerns for the safety of female staff with Merivale headquarters, she said: “[They] told me to be careful, and we were opening a can of worms if we started asking those sorts of questions.” Merivale said it had no record of the allegations.

The former manager said she was scared to speak out publicly against Merivale, fearing retribution.

Paul Mant, group bar manager for Merivale between 2013 and 2022, said in his experience the company did not tolerate harassment and that nor was he aware of any specific instances because he was not the direct reporting manager for staff. He is not accused of any wrongdoing.

Asked if staff may have felt scared to report sexual harassment or assault because of the consequences for their career, Mant said that was an issue for all companies.

“I’d say that’s probably a cultural piece in politics, in media or different industries,” he said. “I don’t think that’s something that will be isolated to Merivale.”

Mant said there was “a clique of customers that we would certainly monitor and took very good care of”. “We certainly made sure that the spenders got the opportunity to spend as was their wont,” he said.

But Merivale went above and beyond for its most lucrative guests, according to multiple staff.

Merivale’s Felix restaurant in the Sydney CBD.

Offered drugs at Felix

In April 2023, one frequent corporate luncher at French restaurant Felix claimed his table was offered drugs by a Merivale manager’s dealer.

“He’s got access to all the good stuff,” the diner said he was told.

The dealer, who looked like a “well-dressed real estate agent”, was flanked by two VIP hosts, who spent part of the lunch sitting on a Level 6 member’s lap and stroking him as the two negotiated a business proposal over a seafood platter.

“I was flabbergasted,” the diner said. “It’s completely bizarre to see it. You know it happens up in Level 6, behind closed doors. I think everyone’s always known it was a lads club, but it’s bleeding down into all these other venues.”

Merivale said it viewed these allegations seriously but that it did not have any record of the alleged misconduct.

In Hemmesphere, guests and staff regularly took cocaine in the bar’s toilets. “It was commonplace to be given drugs and take them,” said one manager.

When one VIP guest pushed a staff member into the bathroom to do a line of cocaine, he ripped open her top. When she raised the sexual harassment with her supervisor, she was told: “Don’t beat yourself up about it. It happened, now just move on.”

Merivale managers said they were told where six CCTV blind spots were located across the Ivy precinct.

“If you want security to take people there to beat them up, then you take them there. If you want to have sex with someone, you take them there. If you want to do drugs somewhere, then you go there,” one manager said.

Merivale said the assertion of staff being directed to CCTV blind spots was “completely false”, as was the claim that blind spots were being utilised for unlawful and improper purposes.

Staff claims at Totti’s Bondi

At Totti’s in Bondi, some staff had a scale on which they would rate the waitresses and hosts based on whether they would sleep with them. One of the chefs would frequently isolate a junior employee, follow them into the cool room, block the door and tell them he was going to grab them.

“I think my tactic at the time was sort of to just hold him off. I didn’t feel confident enough to sort of, you know, fight back or confront him,” the employee said.

“Because of the culture I’m describing, I thought in no way that anyone would support me or do anything to this chef. And I guess if anything, I thought I would probably lose my job. I was basically intimidated into keeping my mouth shut.”

Totti’s famous puffy bread has become an Instagram favourite.Credit: James Brickwood

Merivale said there was no record of the incidents. “We want to set the highest standard for our industry to follow,” a spokesperson said.

But one Level 6 host said Merivale set a different kind of standard.

“Women have been objectified and commodified and treated poorly,” she said.

“It was a culture that [Merivale] started, and it has a trickle-down effect, and they became more and more emboldened. If that can be addressed and [they can be] held to account, then I think that’s really important.”

Merivale said it was unaware of the extensive list of allegations until it was questioned about them last week.

“Merivale’s only priority here is the safety and wellbeing of our team and our guests,” a spokesperson said.

“If any of these allegations are even remotely true, we sincerely regret any distress caused.”

Kate Eastman will investigate the allegations raised by this masthead. Credit: Janie Barrett

The company has now charged Eastman with investigating allegations of misconduct, but former staff are sceptical complainants will come forward to an internally appointed silk.

“Ms Kate Eastman, SC, will be available to receive any further information about these allegations which can be made anonymously to ensure confidentiality, and she will only use any information provided to her to conduct an independent investigation,” Merivale said in a statement.