Justin Hemmes’ Merivale empire to defend case over alleged underpaying of staff

Justin Hemmes’ billion-dollar Merivale empire will “vigorously defend” itself over allegations it underpaid staff as much as $129m.

Justin Hemmes from Merivale Group. Picture: Sam Ruttyn

Justin Hemmes’ billion-dollar Merivale empire will “vigorously defend” itself against a class action alleging it underpaid thousands of staff as much as $129m.

The Federal Court action claims Merivale’s 2007 Work Choices agreement was never validly approved and an estimated 8200 staff across the group’s restaurants and bars should have been paid industry award rates for the past six years, the maximum underpayment claim period under the Fair Work Act, the Australian Financial Review reports.

The hospitality empire has yet to receive any class action documents but Merivale spokeswoman Sue Cato said the group “firmly believes there is no basis for any action”.

“From the scant information at hand, the only basis for this claim seems to be that the Federal Government regulator is alleged to have got it wrong when it approved the enterprise agreement some ten years ago which cannot be Merivale’s fault,” Ms Cato said.

In January the Fair Work Commission terminated the company’s 2007 employee collective agreement.

Under the old agreement a casual worker was paid about $24.20 an hour on any day and at any time, while on public holidays the amount increased marginally to $25.50 an hour.

Under current awards, a casual worker would be entitled to an hourly rate of $27.48 Monday to Friday evenings, $30.33 on Saturdays, $35.39 on Sundays and $50.55 on public holidays.

Ms Cato said Merivale regularly reviewed its compliance regarding employee entitlements, had them independently assessed by external parties and was confident in its position regarding the treatment of its employees.

“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,” she said.

“Nevertheless, if necessary, Merivale will vigorously defend any claim if it is lodged.”

Canberra law firm Adero is leading the class action and states on its website that there was potential underpayments by at least 70 hospitality venues operated by Merivale enterprise in Sydney.

“Adero has been instructed that employees of Merivale are covered by either the Hospitality Industry (General) Award 2010 or Restaurant Industry Award 2010, both of which set a higher base rate of pay than the Merivale Collective Agreement 2007,” it states.

“Adero has also been instructed that as a result of the Merivale agreement employees are not receiving weekend penalty rates and other entitlements that they would receive if they were paid as per the relevant Award.”

Ms Cato said Adero’s class actions were typically funded by litigation funders whose interests in the proceedings concerned receiving very large commissions from proceeds which the courts awarded to class action members.

“The scale of those commissions have previously been the subject of adverse criticisms from a range of courts,” she said.