The operators of billion-dollar pub empire the Merivale Group have had a bizarre whinge about needing to pay their staff the wages they’re entitled to.
The Fair Work Commission yesterday terminated the company’s Work Choices-era employment agreement, which saw thousands of young workers paid well below the current hospitality industry award.
From March, Merivale will be required to pay current rates and conditions after a campaign run by the union United Voice.
But the company, run by multi-millionaire Sydney pub tsar Justin Hemmes, said in a submission to the Commission that Merivale’s future viability would need to be reviewed.
“Merivale will need to consider the viability of business practices which while viable under the EBA, may not be viable under the modern award,” human resources manager Kate Tones wrote.
The Hemmes family empire includes some 70 hotels, pubs and restaurants throughout Sydney, including the flagship venues The Ivy, The Beresford and The Establishment, as well as the sprawling Newport Hotel on the northern beaches.
Merivale Group is worth an estimated $1 billion to the Hemmes family and Justin is said to have a personal net fortune of $300 million.
Jo-anne Schofield, the National Secretary of United Voice, said one of the young workers who came forward was out of pocket about $3000 per year.
“The outdated industrial conditions in the Merivale agreement preyed on vulnerable young workers, paying them sub-Award rates,” Ms Schofield said.
“Thanks to the young, casual workers who applied to have the agreement terminated thousands of Merivale workers will now be paid the rates that other hospitality workers earn.”
Related story: Inside Australia’s glamour family — the billionaire Hemmes clan
The so-called “zombie agreement” from the Work Choices era of industrial relations under the Howard government was instituted in 2007.
A worker on the old agreement was paid about $24.20 per hour for casual work on any day and at any time, while on public holidays the amount increased only marginally to $25.50 per hour.
Under the 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.
“It’s only right that Merivale has agreed to adopt the provisions of the Hospitality Award and pay employees what they should be earning under current Award rates — and we remain disappointed that it took the threat of legal action to do so,” Ms Schofield said.
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Two former employees of the group told news.com.au they weren’t surprised by Merivale’s resistance to paying staff fairly.
Paul Burns, a radio newsreader who used to work at a Merivale establishment, claimed workers were forced to hand over half of their tips each week.
“They never did really justify it. We had to hand over our tips each night and we got half back and the rest just disappeared never to be seen again,” Mr Burns said.
“And yes, the pay was horrendous.”
Another former employee who worked at the company’s head office said conditions were “just f***ing horrible”.
“Hoards of people mashed into the one office space, one toilet. — I was told I could use one of the venues downstairs if I was busting,” the ex-staffer, who spoke on the condition of anonymity, told news.com.au.
Merivale’s employment practices have made headlines in the past, with a leaked video in 2015 allegedly showing Mr Hemmes ordering a strip search of one of his employees.
Mr Hemmes allegedly suspected the man of stealing thousands of dollars from him and, according to court documents, said: “Do you know who the f**k I am?”
A video emerged allegedly showing a security guard blocking the exit of an office while another patted the former employee down, who had been instructed to strip.
A small quantity of cocaine was found on the man. The man later sued Hemmes for false imprisonment, but the matter settled out of court.
According to the submission to the Commission, 71 per cent of Merivale’s workforce are casual employees and 48 per cent of those work on a visa of some kind.
Ms Tones argued that paying workers their entitled wages and overtime or penalty rates presented a major problem for the company.
She also complained about a requirement to give staff mandatory breaks, given none were currently offered.
In a statement to news.com.au today, Merivale flagged it would have to make “a number of administrative and operational changes” for its staff as a result of the change.
“Merivale will continue to deliver exceptional product and service across all of its venues and will remain a workplace of choice for our staff,” it said.
“Merivale is committed to continuing to be a lead employer in our sector. Our staff are at the heart of our DNA and we keep them front of mind in everything we do. We know our great staff are a key to our success and they will ensure Merivale continues to thrive.
In a summary of its decision, the Commission said it was satisfied the termination of the zombie agreement “would not be contrary to the public interest”.
Mr Hemmes was unavailable for a requested interview.
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