Why Justin Hemmes’ pub empire could be forced to repay $ 129 million in penalty fees, unpaid overtime, and below-awarded wages to 14,000 employees
- Federal court ruled that Merivale’s 2009 WorkChoices Agreement had not been approved
- 14,000 employees can receive arrears for overtime and fines
- Merivale is likely to appeal as the court may waive damages
- Adero Law started the class action in 2019, seeking damages of $ 129 million
Justin Hemmes’ pub empire could be forced to pay workers $ 129 million in unpaid wages after a massive blow to the court’s defense.
The federal court ruled that Merivale’s 2009 WorkChoices Agreement was not valid, despite passing a so-called “ fairness test. ”
More than 14,000 employees would then instead be covered by the industry price and would have to pay back fines and overtime between 2013 and 2019.
Merivale CEO Justin Hemmes. The hospitality could be forced to pay back more than $ 100 million in unpaid overtime and fines
A restaurant from the Ivy Precinct, one of Merivale’s showpieces
Merivale said the decision was “ extremely concerning ” because it believed it had passed the so-called fairness test in place at the time.
It is expected to appeal by asking the court to waive compensation at its discretion because the regulator falsely approved the wage agreement.
The Workplace Authority, since replaced by Fair Work, controversially approved it in 2009 after first rejecting it for failing the fairness test.
Merivale appealed and threatened to take the Authority to court, and Acting Director Penny Weir made a backflip based on unspecified “ administrative issues ” facing the company.
The company now states that even if the regulator was wrong in approving it, 12 years have passed and the company made business decisions based on its validity.
These include getting into debt to grow the business and organizing the schedules around the lack of penalty rates and minimum wages.
14,000 current and former Merivale employees are represented by Adero Law in a class action against the hospital giant for underpaid wages
Merivale used the lower wages and fines to gain a huge competitive advantage in the hospitality industry and was forced to drastically re-evaluate the company when the deal ended in 2019.
Adero Law, who is leading the class action, told Daily Mail Australia it would counter any appeal by claiming that Merivale’s employees are the real victims.
“We think we can overcome Merivale’s argument,” said Tom Hakkinen, senior associate at Adero Law.
Even if Merivale is an innocent party because they depended on a Commonwealth officer, the workers are a third party affected and also an innocent party we’d say are more innocent – and they had no idea what was going on about the hand. ‘
“Merivale certainly should not succeed against its employees’ safety net rights.”
“There has never been any precedent that it has allowed an employer to escape paying safety net wages to employees,” said Adero’s director, Rory Markham.
Mr. Hakkinen said the court should take into account that “Merivale had a huge advantage in the industry over competitors who did not have a wage deal that undermined the price.”
Adero Law claimed that Merivale had a huge advantage in the industry over competitors who did not undermine price when paying staff
Judge Thomas Thawley told the court this week that the then-law said an agreement ‘stopped working’ once it failed the fairness test and employees were automatically entitled to arrears. Australian Financial Review reported.
“If honesty testing decisions were meant to be revoked and re-made, it would be expected that this would have been explicitly addressed in the legislation, given the highly regulated structure displayed in Division 5A,” he said.
Justice Thawley said the regulator acted “beyond control” by approving it anyway.
But he added, “ The ramifications of that in terms of whether the Merivale Agreement or the ruling applies and the relief that this court would provide at a final hearing … have yet to be determined. ”
When the class action began, Merivale said it “firmly believes there is no basis for any action.”
Merivale was contacted for comment.