Hospitality giants face legal hurdles in employment agreement cases

01 April, 2021 by Vanessa Cavasinni

Within days of each other, Brisbane’s Mantle Group and Sydney’s Merivale have had decisions made against them in ongoing cases regarding their employee agreements.

According to News Corp, Mantle Group have been ordered to repay two former casual staff members in an ongoing investigation by the Fair Work Ombudsman, looking into its decades-old enterprise agreement.

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The Mantle Group owns and operates a number of hospitality brands, including the Pig ‘N’ Whistle franchise comprising six British-style pubs across Brisbane. The two ex-employees who have brought the case against Mantle Group were previously employed within the Pig ‘N’ Whistle franchise.

A spokesperson for the Fair Work Ombudsman reiterated to Australian Hotelier that the investigation was still ongoing.

“The Fair Work Ombudsman is conducting an investigation in relation to Mantle Group including Staff Services Employment. As this matter is ongoing, it is not appropriate to comment further at this time.”

A spokesperson for Mantle Group told News Corp that it rejected any wrongdoing and that the group was confident there was no basis for any claims or actions by current or ex-staff.

Mantle Group has not responded to Australian Hotelier’s requests for comment.

Merivale hits class action speedbump

A class action was brought against Merivale by law firm Adero at the beginning of 2020, in which it alleges that the group’s employment agreement is invalid and that salaried staff were expected to work a 50-55 hour week, while only being paid for 38 hours.

Merivale’s employee agreement, created in 2007 and amended in 2009, varies from the Hospitality Award, and Adero has contended that Merivale’s agreement was not a valid one. Merivale’s defence has been that the 2009 amendments to its employment agreement were made on the behest of the Workplace Authority, in which the regulator stated that the amended agreement passed the fairness test and thus was valid. Merivale also argued that the regulator rescinded the original decision that the 2007 agreement did not pass the fairness test.

This week Federal Court Justice Thomas Thawley made a preliminary decision that the Workplace Authority Director was in error to approve the amended 2009 agreement. Merivale’s continuing argument is that it should not be held responsible for the errors of the Workplace Authority.

“The preliminary interlocutory decision that the regulator was in error in its exercise of its powers in approving the Merivale collective agreement which had passed the legislative fairness test, is extremely concerning,” stated a Merivale spokesperson.

“Merivale relied on the regulator’s decision to approve the collective agreement and it complied with the collective agreement on this basis and structured its operations accordingly.

“Under the decision, the Court has not decided that the Merivale collective agreement was invalid in that it did not apply to its employees.”

Adero principal, Rory Markham, gave Australian Hotelier his view on the case and how it would proceed further.

“The Merivale decision has established that the MRVL agreement was not made within the jurisdictional power of the Workplace Advocate. It follows that 14,000 people were not paid overtime, allowances and loadings during the claim period on the representation that the collective agreement was valid at law.

“The matter will now resolve on discretionary factors in terms of the ultimate relief to be granted under a judicial review application and by operation of compensation relief under s545 of the Fair Work Act. Merivale will lead evidence that it is suffered serious detriment by operating i[t]s business on the understanding that it had a lawful collective agreement; including hiring more staff, taking on debt facilities and acquiring large hospitality venues within its operations. It will claim that changing the position at law for the MRVL agreement would be unjust in all the circumstances.”

Markham concluded: “In contract, the 14000 workers will say that that were denied more than $150 million in award safety net payments and were never informed about the acts of the Workplace Advocate or Merivale that has now led the Federal Court to determine that the MRVL agreement was beyond power.  The group will also submit that there is no precedent in industrial relations law to permit, by discretion, an employer to pay less than the Award Safety Net and NES. There is also no conduct on behalf of workers that could have contributed to Merivale’s  alleged detrimental reliance and the group is a highly vulnerable and young workforce.”

The court will reconvene in a fortnight to hear further arguments on the case, at which time Merivale will argue that it cannot be held responsible for the failings of the regulator.

“Employers should be able to rely on decisions made by regulators regarding the validity of their enterprise agreements when structuring their business operations and paying their employees,” continued the Merivale spokesperson.

“Given the large number of employers and employees who rely on employment regulators’ decisions, such errors can have significant impact on these businesses and their employees.

“Merivale will continue to defend this class action until the final hearing and denies liability in relation to the claims in the proceedings.”