Controversy continues over hotel group Merivale’s now defunct collective agreement governing its 3,000-strong workforce, with reports suggesting that it may face a class action for alleged wage underpayment.
Kellie Pledger of national law firm Adero told My Business sister publication Lawyers Weekly that Merivale could face a class action from its employees following three months of due diligence.
“Adero is investigating potential underpayments owing to hospitality and restaurant employees engaged by at least 70 hospitality venues operated by the Merivale enterprise in Sydney, New South Wales,” the firm has stated on its website.
“Adero has been instructed that employees of Merivale are entitled to a higher base rate of pay than they are currently receiving. Notwithstanding the operation of the Merivale Collective Agreement 2007, all potential class members are covered by the Hospitality Industry (General) Award 2010 or Restaurant Industry Award 2010, both of which set a higher base rate of pay than the Merivale agreement.
“Section 206 of the Fair Work Act 2009 (Cth) requires the base rate of pay in a collective agreement to be equal or greater than the rate stipulated in the award.
“Employees may also be entitled to a casual loading of 25 per cent in addition to their base rate of pay.”
Justin Hemmes (pictured)-owned Merivale has again disputed that it has not done anything wrong, and said that if such a class action did eventuate, “given the absence of any underpayment, the only winners out of any proposed class action, as always, will be lawyers and litigation funds”, Lawyers Weekly quoted the company as stating.
“Merivale was comprehensively audited by the independent regulator, the Fair Work Ombudsman, in 2018 as part of the Hospitality Compliance Campaign, and on 13 July 2018, the Ombudsman determined that Merivale was in full compliance with all of its legal obligations. This demonstrates that any proposed action has no legal basis. Merivale also continually undertakes internal audits and is confident that there is no systemic underpayment,” it said.
“In fact, the type of claim ventilated in media reports is not about systemic underpayments but rather is based on a creative, novel and strained interpretation of the industrial instrument, which is contrary to the Fair Work Ombudsman’s interpretation.”
The company — which owns dozens of high-profile pubs, restaurants and venues across Sydney — previously denied a media report that its Enterprise Bargaining Agreement (EBA) allowed it to pay its workers as much as half that stipulated by the industry award.
“Merivale is confident all staff have been paid in full and it has been compliant with all relevant legal standards and the applicable industrial instruments,” it said.
The News Corp report had also claimed that Merivale “whinged” about being forced to pay award rates and that doing so may make some operations unviable, which the company also denied.
The controversy erupted after the Fair Work Commission granted an application by two employees to have the agreement torn up. The decision will take effect from 4 March 2019, at which point employee wages will revert to the industry award.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.