Hospitality group may have underpaid workers $126 million

Source: Merivale website

Hospitality group Merivale has allegedly underpaid its workers $126 million over the past six years, with employment law firm Adero filing an open class action lawsuit on behalf of former and current workers.

According to Adero, group members allege they were regularly paid for a 38-hour work week, while working at least 50-hour weeks without overtime payments. The firm alleges Merivale failed to pay the minimum Award entitlements to its staff. 

“The class action will provide access to justice for hospitality workers who would not otherwise have the financial means necessary to fight such a wealthy and litigious employer,” Adero said. 

“It is a David v. Goliath battle in the truest sense.”

Merivale Group holds over 70 brands and venues under, and has been owned and run by the Hemmes family for over 60 years – now led by CEO Justin Hemmes. 

Australia Payroll Association chief executive Tracey Angwin said she believes the underpayment to be due to annualised salaries not bring enough to cover conditions of the relevant awards based on hours worked. 

Angwin also notes that should Adero’s claims be proven true, it would be impossible for Merivale to defend. 

A Merivale spokesperson told news.com.au the class action was baseless.

“Merivale has always acted with the interests of its workforce squarely in mind and does not anticipate that its employees will in any way benefit from these proceedings,” the spokesperson said.

“Nevertheless, if necessary, Merivale will vigorously defend any claim.”

The alleged $126 million underpayment is massive in scale, dwarfing the $7.8 million self disclosed underpayment by Made Establishments that led to the business entering voluntary administration earlier this year

“Other factors were generally difficult trading conditions in the hospitality industry in recent years due to the expansion of the on-demand economy via services such as UberEats and Deliveroo, increasing costs, fierce industry competition and changes in consumer tastes to favour cheaper mid-tier dining options,” said administrator KordaMentha partner Craig Shepard.

Made Establishments founder George Calombaris said the decision was made with deep sadness.

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