Inequality writ large in the NSW hospitality industry as a company grows wealthy by denying a fair rate of pay to its workforce

Multimillionaire Justin Hemmes comes from a privileged background having inherited the bulk of his wealth rather than earned it independently of the family company.

Yet as CEO of M.R.V.L. Investments Pty Ltd since March 2015 at which point the Merivale portfolio was said to contain more than 50 restaurants, bars, pubs and hotels in Sydney, with an estimated value of more than $1 billion he kept the family company’s wages bill so low for est. 3,000 employees - lawfully so under a Howard Government Workchoices-era collective agreement - that words fail me.

Merivale.com, retrieved 22 January 2019:

Owned and run by the Hemmes family for over 60 years, Merivale began as an iconic fashion house started by John and Merivale Hemmes. Merivale’s fashionable beginnings were soon followed by a venture into hospitality, opening a Thai tea café within their Sydney CBD fashion building in 1970. From here, Merivale’s hospitality roots were firmly planted.

Merivale is now led by CEO Justin Hemmes, whose creativity and knack for pushing the boundaries has made Merivale what it is today. Hemmes has become a pioneer within the Australian hospitality industry, growing the ever-expanding Merivale portfolio to over 70 brands and venues.

Financial Review, 23 May 2018:

Prominent Sydney hotelier Justin Hemmes has ridden the property boom all the way to this year's Rich List.

Hemmes and his family have amassed a $951 million fortune via the ownership of 70 pubs, hotels, restaurants and venues in and around Sydney, including The Ivy on George Street in the heart of the CBD.

He joins the biggest group of Rich Listers, property magnates, who this year account for 51 of the 200 names. Hemmes also just misses being among the record 76 billionaires on the list.

ABC News, 12 November 2018:

The drinking and dining empire led by high-profile Sydney hotelier Justin Hemmes is facing a push to kill off a workplace agreement that some current and former staff say denies them weekend penalty rates……

A former Merivale staff member, Maddie Lucre, raised concerns about being denied weekend penalty rates.

Ms Lucre worked at the Coogee Pavilion from January 2016 until July this year. With the assistance of United Voice, where she works in an admin role, Ms Lucre made a claim against Merivale for the weekend and public holiday amounts she claimed was owed to her under the company's agreement.

She was offered $2,706.72, the amount she claimed she was owed, on the condition that she sign a non-disclosure agreement. No admissions of fault were made by Merivale.

"I know that if I keep my mouth shut then no-one's going to find out about this," Ms Lucre told 7.30.

"Merivale has never been held to account for the fact that they are potentially underpaying people."

Financial Review, 21 January 2019:

Merivale is reviewing the viability of its business practices due to the axing of a WorkChoices-era enterprise agreement that gave it a significant commercial advantage in the industry.

The Fair Work Commission on Monday terminated Merivale's long-expired 2007 EA that allowed the hospitality giant to pay some 3000 workers below the award – more than 20 per cent below in some cases – by not applying overtime or full penalty rates for almost a decade.

The decision, which will not take effect until March to give Merivale time to transition to the award, is the result of United Voice taking action on behalf of two casuals who complained they were missing out on thousands of dollars a year……

Ms Tones, quoted by the union's submissions, said that 71 per cent of the company's workforce were casuals and 48 per cent worked on some form of visa.

Under the agreement, casuals were not paid full evening, weekend and public holiday rates or even overtime.

United Voice said one employee was paid $6 an hour less than the award on Saturdays, $10 an hour less on Sundays and $25 an hour less.

The Fair Work Commission having found on 21 January this year it would not be contrary to the public interest to terminate Merivale Employee Collective Agreement 2007 which had passed its nominal expiry date of 21 December 2012, Merivale now appears to be hinting that if it were to pay proper award rates to all its workforce it might have to close one or more businesses because it may not be able to afford a higher wages bill.

Again, words fail me.

NOTE: Justin Hemmes joined Twitter in March 2010 as @justinhemmes. Although he seems to have tired of the account sometime in 2014 it is still active and Twitter will allow civilised comments on this site.

FAIR GO 101: It's Time To Change The Rules

Big business groups are already out attacking out our #ChangeTheRules campaign.

RT if you think workers need more secure jobs and a wage rise. #auspol pic.twitter.com/NPNIwAku86

— Australian Unions (@unionsaustralia) March 11, 2018

Will all working women in Australia ever achieve equal pay?

Most Australians appear to understand that gender-based discrimination against women is a fact of life females of all ages have to cope with at some point in their lives - often at multiple points in their lives.

This poll gives a clear indication of the level of community awareness of this issue.

Essential Report, Sexism and Discrimination Against Women, 5 December 2017:

A majority of respondents think there is a lot or some sexism in the media (64%), politics (60%), advertising (60%), workplaces (57%) and sport (56%).

Women were more likely than men to think there is a lot or some sexism in all areas – but especially in workplaces (women 67%, men 46%) and politics (70%/49%).

There has been some small changes in these figures since this question was asked in January last year – sexism in workplaces has dropped 4%, in the media up 6%, in sport down 4% and in schools up 8%. However, there has been more significant change in the differences between men and women on some issues. On sexism in the workplace the gap between perceptions of men and women has increased from 12% to 21%.

Despite society knowing that gender-based discrimination against women exists, institutions put in place by government to allegedly mitigate inequality and ensure fairness still manage to entrench such discrimination.

The shorter version of the observations and conclusions set out below is that if you are a female worker on minimum wage working in an industry sector which employs significantly more women than men, then you still cannot reliably look to either the private sector or the Liberal-Nationals version of the Fair Work Commission for the equal pay first promised by the Conciliation and Arbitration Commission in 1972.

Excerpt from Barbara Broadway & Richard Wilkinson, Melbourne University (October 2017), Probing the effects of the Australian system of minimum wages on the gender wage gap, pp.3-4:

In Australia, minimum wages are binding for a large part of the labour market: in 2014, 24% of all employees were paid the applicable minimum wage. Based on the above studies, one would therefore expect minimum wages in Australia to reduce the gender wage gap substantially. However, somewhat unusually, the Australian labour market contains many different minimum wages arising from industry and occupation-based ‘awards’ made by an industrial court. These awards specify legally binding minimum rates of pay, which vary considerably across occupations and industries, applying not only to the low-pay sector of the labour market, but to occupations of all levels, including high-skilled, high-paid jobs such as airline pilots, university professors and medical practitioners.¹ The effects of these many minimums will therefore depend, in quite complex ways, on how men and women are distributed across occupations and industries and how minimums are distributed across occupations and industries.

The industrial court does not set different wages for men and women. However, it could, in principle, produce a gender wage gap by setting lower minimum wages in occupations and industries in which women are relatively more concentrated. A gender wage gap caused by legally set minimum wages could therefore be greater than or less than the gender wage gap created by market wages.

Indeed, the raw median gender wage gap among full-time employees in Australia is, at 18%, in the middle range of all OECD countries (Figure 1)², providing a hint that the minimum wage system does not reduce the gender wage gap as much as might be expected given the high proportion of employees that are paid the applicable minimum wage. This is reinforced by the finding that the raw mean gender wage gap among full-time employees is approximately 20% (and indeed the gap has persisted at this level since the early 1990s (ABS 2016), despite relative growth in female educational attainment and work experience)…….

We therefore doubt that the observed job-femaleness penalty is actually derived from compensating differentials determined by the Fair Work Commission. Rather, what seems more likely is that the award-wage decisions have been influenced by observed “typical” wages in industries and occupations, and male-dominated fields have benefited from a long history of strong unionisation that led to higher average wages.

In any case, irrespective of whether non-skill-related differences in award wages are justified by other job characteristics, what is clear is that the gender wage gap among minimum-wage employees is greater than it would be were award wages neutral with respect to the gender composition of jobs.

Indeed, the gender wage gap within the award system would probably be negative if minimum wages depended only on the skill requirements of jobs, since the observed human capital of female minimum-wage employees is on average greater than the observed human capital of male minimum-wage employees…..

Comparing mean wages of award-reliant men and women shows there is indeed a gender pay gap among award-reliant employees, although it is considerably smaller than among non-award-reliant employees. The mean wage is $20.74 for men and $18.63 for women, corresponding to a mean gender pay gap of approximately 10%, compared to 19% among non-award employees.

1 These minimum wages are, however, less likely to be binding in high-paid occupations, where greater proportions of employees receive a salary that is above the applicable award rate.

2 Note that the OECD estimates are not entirely comparable across all countries because of differences in the way the median gender gap is calculated. For example, the wages variable may be measured over an hourly, weekly, monthly or annual time-frame. Figure 1 nonetheless provides reasonable indicative information on where Australia fits relative to other OECD countries.

Coalition senators cut and ran from their own Ensuring Integrity bill

Turnbull Government official spin on the Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 :

Amends the Fair Work (Registered Organisations) Act 2009 to: include certain serious criminal offences as a new category of ‘prescribed offence’ for the purposes of the automatic disqualification regime in relation to registered organisations; establish an offence for a disqualified person to continue to act as an official or in a way that influences the affairs of an organisation; allow the Federal Court to prohibit officials from holding office in certain circumstances or if they are otherwise not a fit and proper person; allow the Federal Court to cancel the registration of an organisation on a range of grounds; allow applications to be made to the Federal Court for a range of other orders; expand the grounds on which the Federal Court may order remedial action to deal with governance issues in an organisation; expressly provide that the Federal Court may appoint an administrator to an organisation or part of an organisation as part of a remedial scheme; introduce a public interest test for amalgamations of registered organisations; and make minor and technical amendments.

The Australian Senate refused to support this bill on 17 October 2017 so the Turnbull Government read the bill a second time, had a short speech read into Hansard and immediately adjourned the debate.

The Senate next sits on 13 November 2017 and one suspects that attempts to swing the cross benchers towards supporting this bill has ratcheted up more than a few notches.

If you don’t agree with this almost constant attack on the existence of unions in Australia then your state senators can be contacted here.

Do it for the right reasons - fairness & equality

The time is now. #VoteYES pic.twitter.com/3quRceLks0

— Dean Smith (@DeanSmithWA) September 7, 2017

Why doesn't the Turnbull Government do more to address domestic tax avoidance?

So why is it that the Turnbull Coalition Government, home to more than one millionaire, continues to allow a set of taxation rules which favour those with both wealth and high incomes over those with only average to low incomes and little to no wealth?

@unionsaustralia

According to the Australian Taxation Office (ATO) – now underfunded, undermanned and demoralised – there is an issue with trusts being used for tax avoidance:

We focus on differences between distributable income of a trust and its net [taxable] income which provides opportunities for those receiving the economic benefit of trust distributions to avoid paying tax on them.

In other words; discretionary trusts are used by high-income earners to distribute investment income to beneficiaries on lower marginal tax rates, in the process reducing the overall amount of tax paid and current rules allow income to be diverted to other family members, such as stay-at-home mothers or fathers, or to dependents over the age of 18, such as children at university, college or Tafe.

Australian Finance Minister and Liberal Senator for Western Australia Mathias Cormann characterises proposals to alter taxation rates on trusts to minimise their use as tax avoidance vehicles as a “tax grab”. Well he would wouldn’t he, with so many political mates to defend.

As for collecting existing tax liabilities……

The ability to enforce payment obligations and pursue avoidance schemes has diminished since 2014 when first the Abbott Coalition Government and then later the Turnbull Coalition Government cut ATO staffing numbers.

The Community and Public Sector Union clearly told the Treasurer in 2017 that:

While the public is supportive of tackling corporate tax avoidance to raise revenue for public services, there are limits to what the ATO is able to do due to significant under resourcing. Despite a growing population and increased expectations from the community, ATO ongoing staffing levels have declined. Between 2013-14 and 2015-16, Average Staffing Levels at the ATO fell by over 4,000 or by nearly a quarter. The audit team, responsible for enforcing the tax compliance of individuals and multinational companies, was hit particularly hard by these job cuts. While there was an increase in the 2016-17 Budget, it has not reversed the significant cuts experienced over the last few years.

Given the need for more, not less revenue, these previous cuts seem illogical. According to information provided to Senate Estimates by senior ATO staff, the return on investment over the last decade would be between 1:1 and 6:1, or simply put every dollar invested in ATO staff generates between $1 and $6 in revenue.[1] Some had previously estimated that the cuts could lead to a loss of nearly $1 billion in revenue.[2]

This disconnect between public expectations that tax avoidance should be tackled and what the ATO can actually do must be addressed by the Government. It should commit to an increase in base funding and staffing for the ATO if it is serious about tackling corporate tax avoidance and increasing revenue.

It seems that while the Turnbull Government talks about an ideal egalitarian society where inequality no longer exists, behind the scenes it is nobbling one of the mechanism’s available to government to ensure that there is a level playing field for all those with only earned incomes as well as those with earned incomes plus accumulated wealth.                                      

So when Turnbull & Co announced in May this year that it intends introducing a strong Diverted Profits Tax and establishing a Tax Avoidance Taskforce in the Australian Taxation Office (ATO) one has to wonder if current staffing levels allow full investigation of multinationals operating in Australia or whether the taskforce (which has in fact existed since 2016) will be adequately resourced to look into multinational tax avoidance and the black economy as mooted.

One also has to wonder why in the face of widespread use of negative gearing of investment properties and capital gains tax arrangements to avoid paying an appropriate tax rate, the Turnbull Government also fails to reform the taxation system in these areas.

Oh, I forgot……………

A total of 331 of these 541 properties were reportedly owned by the 123 Coalition MP and Senators¹ sitting in the federal parliament in 2015.

NOTE

1. Table 1: 45th Parliament of the Commonwealth of Australia party representation

Source: Australian Electoral Commission (AEC), ‘2016 Federal Election Tally Room’

A reminder to rural and regional businesses that there always needs to be a valid reason based on fact for dismissing staff

FAIR WORK COMMISSION

DECISION U2017/1880 Excerpts, 14 July 20017

[42] In dealing with unfair dismissal claims over the past 20 years a handful of cases remain memorable because of their particular circumstances. In some instances, the case was remarkable because of the manifest absence of valid reason for dismissal, usually accompanied by deplorable procedural deficiencies. In other cases, the audacity of the employee to make complaint about their dismissal was consistent with a history of misconduct that provided unassailable valid reason for which the individual should have been dismissed much earlier. Unfortunately, this case will join the ranks of those elite few which forever remain ignominiously memorable…..

[52] Employees are human beings and not human resources. A machine or item of office equipment might be quickly discarded if it is broken or malfunctioning. However, an employee is entitled to be treated with basic human dignity, and advice of the termination of employment by telephone or other electronic means should be strenuously avoided so as to ensure that the dismissal of an employee is not conducted with the perfunctory dispassion of tossing out a dirty rag……

[59] In summary, this case has involved a very regrettable absence of valid reason for the applicant’s dismissal. Further, it has been highly lamentable to observe the seriously flawed manner in which the employer first determined, and then conveyed the decision to dismiss the applicant. The circumstances of this case provide strong foundation for argument against any lessening of legislative protections for unfair dismissal, a proposition which seems to regularly resurface, and gain a level of publicity that is disconnected with reality.

[60] Regrettably, the dismissal of the applicant was harsh, unjust and unreasonable. Thankfully, the applicant is a person protected from unfair dismissal, and she is entitled to have the Commission provide an appropriate remedy.

Fair Work Commission 2017 Minimum Wage Review - heads workers lose, tails workers lose?

Fair Work Commission (FWC) website 10 April 2017:       

Every year an Expert Panel of the Fair Work Commission must review modern award minimum wages, and set a national minimum wage order for employees not covered by enterprise agreements or modern awards.

Each national minimum wage order made in an annual wage review comes into operation on 1 July in the next financial year, and continues in operation until the next national minimum wage order comes into operation.

The minimum wage hourly rate currently stands at $17.70 – and yes, we all probably know of an adult who is not even receiving this.

The  FWC Annual Wage Review 2016-17 (C2017/l) is being conducted by:

JUSTICE ROSS, PRESIDENT

VICE PRESIDENT HATCHER

DEPUTY PRESIDENT ASBURY

COMMISSIONER HAMPTON

MR COLE

PROFESSOR RICHARDSON

MR GIBBS,

MELBOURNE, 7 APRIL 2017

The 2017 final minimum wage decision will be handed down in sometime in June coming into effect on 1 July.

Here is the preliminary hearing dealing with transitional instruments and relevant to annual wage reviews and existing arrangements for employees with disability DECISION.

Shorter version of this decision is:

go away little low-skilled people and don’t expect a minimum wage rise larger than that which we gave you in 2013, 2014, 2015 or 2016 - if you are lucky it will be somewhere between 41-50 cents an hour for an estimated 196,300 low-paid workers;

as for workers with a significant disability - too hard, we’ll pass the buck.

Of course if Justice Iain Ross, Adam Hatcher et al listen to the business sector this year then these 196,300 workers will only receive about a 20 cents an hour increase.

Tossing a silver coin in the air right now……….

Dear Malcolm, Barnaby, Scott, Peter, Julie, Alan and friends - before you put that federal budget to bed in May let me tell you about those living in relative poverty

As the Coalition Government approaches yet another cost cutting budget – the fourth since your political parties regained federal government – I’ve noticed how financially comfortable all six of you are in comparison to a great many of other Australians.

It must be satisfying to see your names listed against family homes, rural properties and investments:

8 March 2017	Turnbull, The Hon Malcolm, Member for Wentworth, NSW
13 January 2017	Bishop, The Hon Julie, Member for Curtin, WA
13 February 2017	Dutton, The Hon Peter, Member for Dickson, QLD
15 February 2017	Joyce, The Hon Barnaby, Member for New England, NSW
28 November 2016	Morrison, The Hon Scott, Member for Cook, NSW
16 December 2016	Tudge, The Hon Alan, Member for Aston, VIC

However, before your red pens slash across currently funded government programs covering health, education, training, community legal services and various forms of income support, you need to remove those ideological blinkers from your eyes and really look at the people you have been labelling welfare cheats, leaners, lazy bludgers and worse for the last four years.

They are not an anonymous horde harbouring a vile intent to drain money from the pockets of your family, friends and business acquaintances.

These ordinary people are not your enemy.

They are two parents with three young children but only one low-paying casual job bringing in a weekly wage.

The single mother at the bus stop who has to scrimp and save for months to buy her children new school shoes because her rent is too high and her part-time wage too small to allow her to buy all necessities easily.

The old man living alone in a rented flat who goes without meals to pay the veterinary bill for his only companion – his faithful old dog.

It is the grandmother with arthritis who gets up at 5am every weekday so she can travel to her son’s house to babysit her grandchildren so both he and his wife can work to cover the normal bills of a growing family.

A 23 year-old permanently confined to a wheelchair who is determined to live a full life and is out there job hunting every week.

Or the 17 year-old on the street selling The Big Issue to get extra money towards a boarding house bed and meals, because growing up in care left him without a support network.

It’s every middle aged person holding down three separate 8 hour-jobs each week to make ends meet in the face of widespread employer age discrimination and not enough job vacancies.

And so many volunteers in every town or village who spend their few spare pension dollars getting back and forth to the unpaid jobs that keep community alive.

These are people who deserve the certainty of an adequate universal welfare safety net – they are also the voters you will have to face in 2018.