“Unconscionable”: Fair Work unleashes on pub chain that avoided paying penalty rates for 22 years

The Fair Work Commission has slammed an “archaic”, “unconscionable” zombie agreement that prevented employees of Queensland’s largest hospitality group from being paid penalty rates, leaving one underpaid $7000 for hours worked.

Commissioner Jennifer Hunt ordered millionaire Godfrey Mantle’s Mantle Group Hospitality (MGH) to terminate the 22-year-old staff services agreement from June 9, calling it a “disgrace”.

MGH runs popular venues in Queensland like the Pig ‘N’ Whistle British pubs and Jimmy’s on the Mall, in Brisbane’s Queen St, as well as key James Squire venues The Charming Squire in Brisbane and The Squire’s Landing at Sydney’s Circular Quay.

Hunt noted that, under the agreement, employees did not receive penalties for working at night, on weekends or on public holidays, and were instead paid the base hourly rate of at least $20.33 for all hours.

That meant casual employees at the hospitality giant lost more than $11 an hour for working on Sunday compared to the award rate, while on public holidays, it was more than $26 an hour lost.

“The effect of employees working without payment of penalty rates is staggering,’’ she said, adding it provided “no benefit to employees at all’’.

“I consider it necessary for a light to be shone on these kinds of archaic arrangements.”

In one instance, an employer of the group paid a worker $28 an hour and two extra dollars an hour on weekends, something the commissioner called “unconscionable”.

“It is difficult to understand how an employer could have, for so many years, knowingly deprived a large number of employees of penalty rates, to which they would have been otherwise been entitled under the relevant award, simply because it lawfully could do so,” Hunt said.

Hunt also slammed MGH for seeking to transfer employees to a different agreement called Hot Wok Food Makers after the case was brought before the commission. Under that agreement, employees were asked to “volunteer” to work weekends, nights, and public holidays at their ordinary rate — that is, without penalty rates.

“It is inconceivable to imagine a [level 3] employee voluntarily agreeing to work for the payment of $28.77 per hour on a public holiday when they would otherwise be entitled to $56.15 per hour,” she said.

The case was brought before Fair Work in March by United Workers Union members Alex Knott, 20, and Henry Thom, 25, who represented nearly 300 of their colleagues. In May, the employer told the commission it no longer opposed it.

Knott was employed by Milano restaurant in Brisbane’s Queen Street Mall for more than 12 months when he complained about his underpayment by as much as $7000, he calculated. His shift promptly disappeared.

“There is a lot of misclassification of roles to keep wages low. My classification meant that I was to have constant supervision and no contact with customers, but I was working as front of house staff in a role that should have attracted $8 an hour more,” Knott said.

“Many Mantle employees know they are being ripped off, but the company uses these hard-to-understand agreements to baffle workers and basically just say ‘take it or leave it’. I can tell you the customers aren’t saving any money, the profits just go straight to the owners.”

Maurice Blackburn principal Giri Sivaraman, the legal representation for the pair, said it was clearly not in the public interest for the Howard-era zombie agreements to continue.

“Awards are the safety nets for employees and collective agreements are meant to provide better conditions, yet here we have the opposite occurring,” Sivaraman said.

“The zombie agreement undermines the award, short changers workers, and gives Mantle group an unfair competitive advantage. It’s time to end this agreement.”

Mantle told the AFR: “We disagree with statements of commissioner Hunt.”

“At all times [Staff Services Pty Ltd] has acted lawfully and in accordance with the Fair Work Act,” he said.