The drinking and dining empire led by high-profile Sydney hotelier Justin Hemmes is facing a push to kill off a workplace agreement that some current and former staff say denies them weekend penalty rates.
Two current Merivale hospitality staff have launched a bid in the Fair Work Commission to terminate a 2007 employee agreement which they say leaves them worse off than if they were covered by the hospitality award.
Although it expired in 2012, Merivale still uses the agreement to pay its staff and is paying them weekend and holiday rates that are consistent with their legal obligations under the agreement.
The Merivale hospitality company owns some of Sydney’s most lavish venues, including Ivy, Establishment and Mr Wong.
The company has rapidly expanded and now owns more than 50 venues across Sydney.
Mr Hemmes, who is CEO of Merivale, is renowned for the extravagant parties and awards nights he throws for staff. He reportedly threw staff a $1 million party in February this year.
An investigation by 7.30 into the business found that some hospitality staff received no weekend penalty rates — and lower penalty rates on public holidays than set out in the hospitality award — since at least 2016.
When the agreement was signed in 2007 it said Merivale employees “shall receive a higher rate of pay” for weekend and public holiday work. They would have received dollar amounts that were 10 per cent more for weekend work and 40 per cent more on public holidays.
But an internal Merivale document dated to 2017 and seen by 7.30 indicates the company paid casual staff the same rate on weekends and weekdays, and paid a public holiday rate between 13-15 per cent higher.
Payslips and timecards reviewed by 7.30 from multiple staff who worked at different Merivale venues reveal the company still pays casual staff the same rate of pay for weekday and weekend work.
In a statement, Merivale’s people experience manager, Kate Tones, said that Merivale’s 2007 employment agreement does not provide a 10 per cent higher rate for weekend work or a 40 per cent higher rate for public holidays. But she said it “does provide for specified minimum dollar rates for ordinary time, weekends and public holidays but these are not equivalent to loadings”.
She added: “Merivale currently pays its employees either at, or in most cases above, the rates outlined in the … [Employee Collective Agreement] for all work performed as it is required to do by law. These rates are updated annually in compliance with our legal obligations.”
“Merivale certainly isn’t paying its employees less than they would have earned in 2007, nor is Merivale paying employees any less than they are entitled to under the law.”
Ms Tones said Merivale was audited by the Fair Work Ombudsman earlier this year and was found to be compliant.
‘I just copped it on the chin’
If casual staff at Merivale were paid under the hospitality award, they would be entitled to penalty rates on weekends and public holidays.
Two current Merivale employees applied on November 2 to the Fair Work Commission to strike out Merivale’s 2007 employee collective agreement, on the basis that it leaves workers worse off than the current hospitality award.
“For a long time I just copped it on the chin,” current Merivale worker and member of union United Voice, Mackenzie Waugh, told 7.30.
“I just didn’t think there was anything I could do about it.”
Mr Waugh, 20, is a law student who also works at the Electrical Trades Union.
“It became clear to me that my case wasn’t isolated and there were other people who were experiencing the same thing as me.”
In relation to the termination application, Ms Tones said in her statement: “We are currently considering what the best outcome will be for the staff and the organisation in the short and long term.”
“However, we reiterate that the Fair Work Ombudsman found Merivale was paying its staff in compliance with the law. As you would be aware, the [Better Off Overall Test] … only applies to the approval of new agreements by the Fair Work Commission, so it has not applied to Merivale.”
Merivale asked former employee to sign gag order
A former Merivale staff member, Maddie Lucre, raised concerns about being denied weekend penalty rates.
Ms Lucre worked at the Coogee Pavilion from January 2016 until July this year. With the assistance of United Voice, where she works in an admin role, Ms Lucre made a claim against Merivale for the weekend and public holiday amounts she claimed was owed to her under the company’s agreement.
She was offered $2,706.72, the amount she claimed she was owed, on the condition that she sign a non-disclosure agreement. No admissions of fault were made by Merivale.
“I know that if I keep my mouth shut then no-one’s going to find out about this,” Ms Lucre told 7.30.
“Merivale has never been held to account for the fact that they are potentially underpaying people.”
Merivale’s Ms Tones said in her statement that “given the thousands of people that work and have worked at Merivale, there have been extremely few employee issues”.
“When on occasion there has been a grievance, Merivale has quickly acted to address the issue commercially and to the satisfaction of the employee.”
Merivale trades on glamorous image
A former Merivale bartender, Myf Nizette, who previously worked at United Voice, told 7.30 that the company trades on its glamorous image of prestige at the expense of staff.
“They’re building this empire and they’re buying up more and more venues within Sydney and probably looking elsewhere in Australia as well, and yet they’re doing that on the backs of workers who are not getting paid properly,” she said.
Ms Nizette worked at Merivale venues the Tennyson and the Vic on the Park, and was employed at Vic on the Park when it was bought out by Merivale. She said that she raised concerns with the company after comparing her rates of pay under the previous owner with those set out under Merivale’s agreement.
She resigned soon after, writing in an email that she felt disillusioned with the company and the way it treated staff.
Merivale ‘zombie’ agreement faces termination
Merivale’s 2007 agreement is what is known as a “zombie” agreement.
Employment lawyer Giri Sivaraman, from Maurice Blackburn, said it was lawful to use these agreements until they were terminated. But he said they are often unfair because they were introduced during John Howard’s WorkChoices regime, which he said imposed a lower threshold for determining whether an agreement was fair to employees.
“It’s taking advantage of what is a real problem with the law, an unfairness in the law, that these agreements can be relied upon,” he said.
United Voice national secretary Jo-anne Schofield told 7.30 the agreement potentially left thousands of Merivale workers worse off.
“What it’s effectively done is locked thousands of young workers into a set of wages and conditions that are now well below industrial and community standards,” she said.