A dish served cold: Lessons learnt from the employee agreement termination at Justin Hemmes' Merivale empire

Finance Journalist · 25 January 2019
Multi-millionaire Justin Hemmes’ pub and restaurant empire Merivale has had its outdated workplace agreement terminated by the Fair Work Commission, after the United Voice union alleged it was underpaying staff well below the current hospitality industry award.
Merivale employee agreement
Source: Kasarp studio (Shutterstock)

For an expert breakdown of the Merivale case, how the ruling may affect the industry, and tips for employees on checking their payslips and super contributions, we talked to Patrick Turner, an employment and industrial lawyer with Maurice Blackburn.

What was the issue with the Merivale employment agreement?

Mr Turner said the Merivale agreement was what is commonly referred to as a ‘zombie’ workplace agreement, meaning it was outdated and out of touch with current community and industry standards of pay.

Originally drafted in 2007 during the Howard Government’s Work Choices era, the agreement expired in 2012 but continued to be used by the company for its 3000-strong workforce across more than 70 Sydney venues.

Under the agreement, Merivale was not obliged to pay current award-level overtime or penalty rates to its casual staff, who made up 71% of its workforce, according to the union’s submission to the Fair Work Commission (FWC).

“It’s no surprise that the rates of pay in such an old agreement have been outstripped by the bare minimums set out in the current hospitality industry award,” Mr Turner said.

“For example, it’s been reported one worker (from Merivale) was being paid $6 an hour less than the award for work performed on Saturdays, $10 an hour less on Sundays and $25 an hour less on public holidays.

“For those working in low-paid jobs such as those in the hospitality industry, these numbers can result in very significant underpayments.”

Was the agreement lawful?

Mr Turner said that while the Merivale agreement was problematic and did not keep pace with the expectations of current payment conditions, it was a lawful agreement.

Under the Fair Work Act, agreements from the WorkChoices era can continue to operate after their nominal expiry date until the FWC approves a replacement or termination.

“If it wasn’t for a few brave union members and United Voice making an application to terminate, then the Merivale agreement could have remained in force for years to come,” he said.

Are similar outdated agreements still being used across the hospitality industry?

The ABC recently reported tens of thousands of Australian employees are still locked in ‘zombie’ workplace contracts, and are often completely unaware of their entitlements under the Fair Work Act.

Mr Turner agreed, saying there were potentially a large number of outdated agreements like the one in effect at Merivale, particularly in workplaces with low union membership.

“It is not just limited to the hospitality setting, it is also occurring in retail settings and the fast food industry,” he said.

What can we take away from this case?

While the Fair Work Commission decision earlier this week was more of a formality (as Merivale had already agreed to the termination of the agreement following the publicity around employee complaints), Mr Turner said decisions like this showed the tide was turning when it comes to people fighting back against unfair workplace conditions.

“Employers in Australia should be aware that there is much greater scrutiny now of companies that pay sub-standard rates to workers,” he said.

“Relying on out-of-date agreements to suppress pay is part of the reason we are seeing stagnant wage growth in this country.

“It’s apparent from stories like Merivale that people are increasingly standing up and saying that this is not acceptable, we need to move with the times.”

Tips on checking you are being paid correctly and where to go for help

If you are concerned that you are being underpaid, or simply want to check whether your rates of pay are in line with current standards, Mr Turner suggested considering the following tips:

  • Do a thorough check of your situation. Check your employment agreement and your pay slips. Next, access the Fair Work Ombudsman online tools, where you can check your pay rates and what award you may be covered by.
  • Consult free services. There is a Young Workers Centre in Victoria designed specifically for young workers in the hospitality industry and in other low-paid workplaces. It offers free advice about rates of pay and if workers are being paid correctly. There are also free online resources offered by each state government, including the SafeWork NSW website, which provides a range of support services to workers such as free visits, videos, webinars and events.
  • Speak to professionals. For further assistance and advice about your rights at work, contact your union (if available) or the Fair Work Ombudsmen, or consult an experienced employment and industrial lawyer. If you’re based in NSW, Victoria, Queensland or WA, the FWC states that it may be able to arrange free legal advice for you, provided that you meet certain eligibility criteria.

How about my super?

As with your regular pay, Mr Turner said it was also important to check your superannuation contributions to make sure you’re getting paid your full entitlements.

“Based on my work with a range of employees seeking assistance, I have found that it is very common for superannuation obligations not to be met, or only to be met in part, in many different industries,” he said.

“If you are looking to check if you’ve been paid the right amount of super, you can contact your super fund anytime and request an update about your balance and when payments have been made.”

Currently, under Australian law, if you are 18 years old or over and getting paid $450 or more before tax in a month, then you are entitled to super guarantee contributions, irrespective of whether you work part time, full time or as a casual and even if you are a temporary resident of Australia.

This means if you meet the criteria, your employer is, at the time of writing, required to pay an amount equal to 9.5% of your salary into your super fund account, which is on top of your ordinary salary or wages. The amount contributed should be displayed on your pay slip.

Super payments must be made at least four times a year by the due dates, however they can also be made more regularly as long as the total amount is paid by the quarterly due date.

“If you are concerned there has been an underpayment when it comes to super, then reach out to the Fair Work Ombudsman, your union or an experienced employment lawyer,” Mr Turner said.

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