Merivale accused of $126 million wage theft

10 March, 2020 by
Hospitality Magazine

Sydney hospitality empire Merivale has been accused of underpaying employees an estimated $126 million.

Employment law firm Adero launched a class action against Merivale on behalf of the group’s workforce in December 2019, and a directions hearing is now set to be held in the Federal Court this week.

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The case is primarily based on two allegations: Up until March 2019, Merivale employed and paid workers under a Work Choices-era agreement from 2007, which has resulted in alleged underpayments.

The Fair Work Commission called for the agreement to cease in January 2019 and ordered the group to pay its workers according to the award. The termination took effect on 4 March 2019.

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Adero estimates 8000 workers fall into the six-year claimable window under the Fair Work Act, with employees potentially entitled to a maximum of $10,900 each, resulting in an estimated $126 million in underpayments.

“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,” Adero litigation coordinator Nicholas Dwyer told news.com.au.

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Adero also alleges a number of salaried workers were paid for a 38-hour week, but worked an average of 55 hours or more without being compensated. Under the award, staff need to be paid for any overtime above 38 hours.

One chef told news.com.au he “felt like a slave”, with another claiming he was told by a doctor to stop working after repeated long hours in the kitchen.

Merivale has responded to the allegations, with a spokesperson calling them “baseless”.

“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 added.

“Merivale categorically denies that any of its employees have been required to work unreasonable additional hours against their will.”

Image credit: DL Photography, Business Insider