Hospitality giant Merivale has warned employees against taking part in a class action for alleged underpayments of up to $129 million, saying they are unlikely to benefit from the claim which the company would vigorously defend.
“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,” a Merivale spokeswoman said.
Adero, a Canberra-based law firm that specialises in class actions, said it has filed Federal Court action against Merivale alleging a WorkChoices agreement which resulted in the underpayment of penalty rates and other benefits was not validly approved ten years ago. The claim alleges that staff should have been paid industry award rates because the agreement was invalid.
The statement of claim alleges that a pastry chef at Merivale’s French bistro Felix, in Sydney, was paid a base salary of $48,000 for a 38-hour week but was required to work an average of 55 hours or more each week.
It is estimated more than 8000 Merivale restaurant and bar staff could be eligible to claim backpay under the class action.
The Merivale spokeswoman said Adero’s class actions were typically bankrolled by litigation funders “whose interests in the proceedings concern receiving very large commissions from proceeds which the Courts award to class action members”.
“The scale of those commissions have previously been the subject of adverse criticisms from a range of courts,” she said.
If the class action goes ahead, Merivale, which has more than 70 restaurant, pub and hotel venues, would “vigorously defend” any legal claim lodged.
A letter written in June 2009 by Penny Weir, acting director of the Australian government’s Workplace Authority, to Merivale’s lawyers says that a 2007 wages agreement for Merivale staff had not passed the fairness test.
Despite this failure, the Workplace Authority then decided to rescind its previous decision to reject the agreement because of unexplained administrative issues.
“The undertaking submitted on 29 December 2008 was not sufficient for the Agreement to pass the fairness test,” Ms Weir’s letter says. “However, you outline significant administrative issues experienced by your client and this provides grounds to rescind the original notice advising you that the Agreement does not pass the fairness test.”
In the statement of claim, Adero says the 2010 hospitality industry award covered Merivale staff for the past six years, the maximum period claimable under the Fair Work Act.
The Merivale spokeswoman said it had not yet received any class action proceedings via the courts or Adero.
“Responding without service of any class action documents is difficult, however Merivale firmly believes there is no basis for any action,” the spokeswoman said.
“From the scant information at hand, the only basis for this claim seems to be that the Federal Government regulator is alleged to have got it wrong when it approved the enterprise agreement some ten years ago which cannot be Merivale’s fault.
“Merivale regularly reviews its compliance regarding employee entitlements and has had them independently assessed by external parties.”
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