Brisbane hospitality king Godfrey Mantle's pub empire is facing a legal challenge by a 21-year-old bartender fighting to kill off a two-decade-old agreement stripping its workers of penalty rates.

Industry figures estimate the Fair Work Commission application by Sydney-based bartender Elijah Blatchford, who works for Brisbane-based Pig 'N' Whistle pub chain owner Mantle Group Hospitality, could drive up the wages bill for the group by millions of dollars a year and open the floodgates to similar challenges by other hospitality workers if it is successful in terminating the so-called zombie agreement.

Mr Blatchford, a casual worker at Mantle Group's busy Mideast-themed Babylon rooftop restaurant and bar in Sydney's CBD, this month applied to Fair Work to terminate the 21-year-old workplace agreement covering hundreds of staff, including at the group's Queensland venues.

The Mantle Group Hospitality empire includes six Pig 'N' Whistle hotels in Queensland, Queen Street Mall institution Jimmy's on the Mall, The Charming Squire at South Bank and several restaurants.

In Sydney, aside from Babylon, it has Squire's Landing at Circular Quay with its sweeping views over Sydney Harbour.

More than 800 staff were working for Mantle Group as of early last year, but the company did not provide an updated figure this week.

The Courier-Mail in late 2019 published claims by former casual staff that they had been exploited by being stripped of overtime and penalty rates under its certified agreement, approved in 2000.

The Pig ’N' Whistle in Brunswick St, Fortitude Valley
The Pig ’N' Whistle in Brunswick St, Fortitude Valley

It revealed many of the workers were paid a minimum flat rate and "not a cent extra" for weekends, public holidays or working into the early hours.

They were hired by Mantle Group's hiring arm under the Staff Services Pty Ltd Certified Agreement - originally set to 'nominally' expire in 2002 and later extended to 2012.

While outdated, it remains in force unless a current employee applies to the Fair Work Commission to have it terminated.

Mantle Group has denied any wrongdoing, telling the newspaper it "pays the proper wages to all staff under the workplace agreement" and had "retained and supported staff through the COVID-19 pandemic," recording a 78 per cent retention rate since September 2020." It is not suggested Mr Mantle has been personally involved in any underpayments.

Mr Blatchford states in his Fair Work application that the "current pay and conditions offered under this agreement are well below the current award rates" and would fail the "better off overall test."

He earned a flat casual introductory rate of $24/hr with no penalty rates, loadings or overtime.

Mr Blatchford said he thought it unusual when told during his job interview late last year that he was not entitled to penalty rates, but said it was "presented... like it was just a really normal thing."

He said he did not realise public holiday penalty rates would also not apply until making the shock discovery he had been paid a flat rate for working Christmas Eve, Boxing Day and New Year's Eve.

It was then he began to research his entitlements, asking for a copy of the workplace agreement.

He said Mantle Group sent its state manager to meet him the next day to assure him everything was aboveboard.

Elijah Blatchford, 21, is spearheading the action. Picture: Toby Zerna
Elijah Blatchford, 21, is spearheading the action. Picture: Toby Zerna

"I thought: 'That sounds really wrong because if a company can just get away with not paying that stuff, why wouldn't everyone be doing it?"

Hospo Voice union member Brett Callander, who is helping Mr Blatchford's Fair Work challenge, said the case would demonstrate Mantle Group workers were being paid less than the minimum base pay rate in the hospitality award when factoring in the loss of overtime, loadings for night work and penalty rates.

While Mr Batchford earned a flat rate of $24/hr, the award sets a base pay of $24-$26hr, weekend penalty rates of $29-$35, public holiday penalty rates of between $48-$52 and extra for overtime.

"If we can get any win hopefully that will be all that it takes for the union to start getting involved in other cases and that would hopefully open the flood gates.

"There's a lot of these zombie agreements out there. Even not what is typically referred to as zombie agreements. Any agreements that have expired, even new EBAs, don't just end. They become the new wave of zombie agreements."

Maurice Blackburn employment law principal Giri Sivaraman said it was hard to kill off the zombie agreements because it needed a current employee to take action, pitching them up against the "might of the company."

He said that could be even more difficult in the current climate with the potential for hospitality companies to capitalise on the financial difficulties created by COVID to argue against pay increases.

"Employers have made money and leached off these substandard agreements for many, many years well before COVID was an issue and having had that benefit for so long it seems unfair that they would now be able to rely upon COVID to keep those agreements going."

Queensland Council of Unions secretary Michael Clifford said the wages safety net was supposed to set the bare minimum pay to ensure a decent living standard.

"For employers that have a business model that rely on outdated agreements that date back 20-odd years knowing they have people on wages and conditions that are less than the minimum in this country, I think that's appalling and we should be ensuring we rip these agreements up.."

The Fair Work case comes after a 2007-approved "zombie agreement" covering about 3000 workers at major pub chain Merivale was axed in 2019 after a union challenge on behalf of two casual workers, which argued staff were being paid below the award by not paying overtime or penalty rates.

Originally published as Pub chain faces multimillion-dollar penalties fight