Aussie hospitality giants face underpaid employee claims

Casino operator Star Entertainment Group will face a $13 million provision for remediation related to staff underpayment, while Sydney pub baron Justin Hemmes faces a $129 million class-action bill for underpaid employees within the coming weeks.

Star identified underpayment of wages to nearly 2200 salaried team members through a six-year retrospective wage review of salaried team members underpinned by modern awards.

There were cases of team members who found themselves not to be ‘better off overall’ because the annual salary was not sufficient in comparison to what people earned for equivalent award entitlements such as overtime and penalty rates.

The United Workers Union and Fair Work Ombudsman have been informed about the underpayment and Star said it has “improved its processes, systems and training” and has a plan to ensure salaried staff are paid correctly in the future.

Star managing director and chief executive Matt Bekier apologised to team members impacted by the payment.

“We are committed to doing the right thing by acting transparently.

“Our priority is to address this issue and to ensure that it doesn’t happen again,” he said.

Hemmes, the head of the Merivale Group, which owns 70 pubs, hotels, restaurants and other venues in the Sydney area, is facing the bottom end of a lawsuit from disgruntled former staff alleging the firm had underpaid its employees.

Group members alleged they were paid for 38 hours per week, but were actually working at least 50 hour weeks without overtime payments.

Adero Law, the firm representing the former Merivale employees, described the action as a “David v Goliath battle in the truest sense.” The firm claims Merivale failed to pay the minimum Award entitlements under the Fair Work Acts 2009 and the relevant modern award.

The suit means that Hemmes could be forced to pay up within weeks, but Adero Law’s principal Rory Markham believes the matter could be resolved before going to trial.

Both parties have begun mediation but Markham told the Daily Mail there was a “strong prospect” it could be settled before the 3 June deadline sought by the former employees.

“Because of mediation privileges, I am not at liberty to say exactly what has been relayed to me by Mr Hemmes’ lawyers. But what I can say is that mediation is likely to achieve a resolution,” Markham told the Daily Mail.

This comes after Hemmes claimed he would not settle out of court.

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