In 2019, another Merivale patron got so wasted after being served a dozen drinks that he “removed his penis from his pants and flopped it about for other patrons to view,” according to a notification for a first strike offence against Merivale issued by Liquor and Gaming NSW.

‘FOJ: Friend of Justin’

Inside Merivale, the company had three different classifications: VIP, VIP black, and the highest tier, FOJ: Friend of Justin. Level 6 members had three membership options, ranging from $5500 to $20,000 per year. They could pay at the bar or transfer it directly into a designated account titled “Hemmes Account”.

“Each applicant goes through a vetting process following formal referral,” the internal documents show. “Quality over quantity maintains the exclusivity of the brand.”

The profile for one of its top “black VIPs”, Matthew Palavidis, reveals he would “drink magnums between two guests.”

It warned staff at Felix to “Always have 1 lobster [per] guest available” for when he dined at the hatted restaurant with his puppy. At Queen Chow in Enmore, the restaurant was instructed to have “1 x MUDCRAB on standby always” for the multi-millionaire acoustic engineer.

Across Merivale’s portfolio of restaurants, Palavidis insisted they always have an $800 bottle of 1983 Chateau Leoville-Las Cases Saint Julien and a $700 bottle of 1996 Chateau Lynch Bages on hand.

Over time, it’s alleged he made junior female staff so uneasy that they updated his profile. “Only to be served by male staff or management. Has made multiple female staff uncomfortable,” his profile states. Through his lawyers, Palavidis denies ever making any female staff feel uncomfortable and rejects any allegation strongly.

But Merivale continued to allow him access to its venues, offering him silver service treatment while he spent tens, if not hundreds, of thousands of dollars at its bars and restaurants.

In November, a Merivale waitress took Palavidis to court for allegedly sexually touching her without consent. The court heard Palavidis attempted to undo the waitress’s top while she served him a bump of caviar at two-hatted Mimi’s in Coogee “as a present to himself”.

Palavidis has denied the allegations. Merivale’s lawyers did not respond to questions about whether the 63-year-old was still allowed into its venues.

Palavidis and Hemmes “know each other”, Palavidis’ lawyer Paul McGirr told this masthead in November.

“There is nothing that he cannot get or do within the venues, because they need to protect that whale,” said one former Merivale manager.

“At no stage has our client called himself a whale,” McGirr said. “Where and when our client goes as a private taxpaying citizen is entirely a matter for him.”

‘They created monsters’

The allegations of sexual harassment and exploitation span several of Merivale’s 90 venues, including Level 6 and Hemmesphere in the Ivy precinct.

“Those two spaces are kind of the centre of the universe for all this bad behaviour,” said one former manager.

One former staff member recalled a Merivale executive grabbing her, throwing her on the couch and putting her hand up her dress. “You certainly didn’t feel like you could say anything about it,” she said, citing a fear of repercussions.

An assistant manager at the Ivy Pool Club told a senior manager she had been groped under her skirt by a VIP, but was told not to pursue it further or she would be opening “a can of worms”. When one VIP guest allegedly pushed a staff member into the bathroom to do a line of cocaine and ripped open her top, she was told by her supervisor: “Don’t beat yourself up about it.”

In response, Merivale’s lawyers said: “What do any of these allegations say about the culture at Merivale? They do not say a thing – they are allegations – which does not mean that they are true. Merivale is and has always constantly strived to improve its workplaces and services.”

Suburban venues, including Queen Chow’s in Enmore and the Coogee Pavilion, had a better reputation among employees. But the VIP program meant that over time, cashed-up members would filter into Merivale’s neighbourhood restaurants, expecting the same level of attention they received at the Ivy.

One manager recalls getting a plate for a VIP to do cocaine in a private dining room at a suburban Merivale restaurant. Then they had to console a distraught staff member after a VIP put his hand up her skirt.

A manager who raised concerns about the behaviour of VIPs was allegedly told by a Merivale executive: “They can do whatever they want, and it’s up to us to make sure they have a good time.”

The experience was not the same for all employees. Several long-serving staff said they enjoyed their time at the company.

“There’s a whole bunch of really great professionals who are kind of being indirectly affected by the bad actors within these groups,” said one former Merivale manager.

Shane Blackett, a former VIP host, said she was sad that she no longer works for Merivale. “I’ve met some of my closest friends through staff and patrons that I still hold to this day,” she said.

But the litany of complaints about alleged sexual harassment by VIPs, and the roster of Level 6 members with ties to organised crime pumping cash into Merivale venues, make for an uneasy contrast with Hemmes’ public persona as a philanthropist, entrepreneur and political donor.

Hemmes and the Liberal ‘love rat’

Hemmes and his companies have donated more than $350,000 to the Liberal Party since 2018, Australian Electoral Commission records show, while hosting fundraisers with prime ministers at his $100 million mansion, the Hermitage.

Internal messages between managers show the company targeted those with political capital for special treatment.

In one exchange, a manager asks for a list of complimentary Level 6 members close to Hemmes, who did not have to pay in the “world-class members-only venue” Level 6.

The list includes Australian Financial Review columnist Joe Aston, LJ Hooker chairman Janusz Hooker, Barrenjoey banker Dyson Bowditch, former realestate.com.au chief executive Jamie Pride, and Rod Bruce, who served as chief of staff to former deputy premier Andrew Stoner. There is no suggestion of wrongdoing from these men.

Bruce, who went on to become an executive at Star Casino, was a “strong contender for biggest prick up there”, one VIP host said, who would “bore the living daylight out of me with the endless drivel of his waffling”.

The list also included Tom Callachor, the former chief of staff to both Stoner and former health minister Jillian Skinner.

Internal messages show Callachor’s privileges were put in doubt as soon as he left government. “[Callachor] might not be any more (as he’s not working in government anymore),” one manager says in the internal messages between Level 6 managers that appear to tie free membership to government access.

Callachor then worked at Sodali, the crisis communications firm that represented Merivale until this year. There is no suggestion of wrongdoing by Bruce or Callachor or that Hemmes personally directed staff to change Callachor’s level of membership after he changed position.

Liberal powerbroker Michael Photios also features prominently as a complementary member.

The former Liberal MP has spent the past decade wielding his influence over the Liberal Party. Photios’ acolytes include Climate Change Authority chair Matt Kean.

Dubbed “the love rat” by The Daily Telegraph in 2007, Photios celebrated his 50th birthday party in 2011 at the Ivy with his now-wife, Kristina Iantchev. The lobbyist continues to host his lavish Premier Christmas Party each year at the Ivy, with a guest list that features state and federal ministers and media identities.

Merivale staff described Photios and Hemmes as “besties” for the regularity with which they were seen drinking together at Hemmes’ venues. Photios did not respond to requests for comment.

One host, then in her early 20s, was told on her first night in 2013 that her job was to take care of Hemmes and Photios. The host shared messages with a friend about the incident.

“I remember being in Hemmesphere, and Justin came in with his bestie. His name’s Michael Photios,” she told the Herald, The Age and 60 Minutes.

“Then my manager said, ‘OK, for the rest of the night, your job is to sit with Justin and drink with him’. I’d never drunk with anyone before, nor had I ever been drunk on the job.

“I just felt really uncomfortable. My managers just kept saying, no, you have to, you have to stay there. That is your job for the rest of the night. I just remember getting really inebriated to the point where I sort of felt like I’ve passed that threshold when you sort of start to panic a little bit.

“And I remember Michael Photios saying, ‘Why don’t you guys just go and have sex?’ ” The host claims Hemmes responded by saying the host was “too innocent” and “too green”.

But the exchange left a lasting impression.

“I felt pretty quickly that women are kind of disposable,” she said.

Lawyers for Hemmes said their “client has no recollection of the alleged events”.

‘Hard to explain the aura’

When Hemmes walks into one of his 90 venues, the first thing he often does is adjust the volume.

“He’s a stickler for sound and lighting,” said one former staff member. “It’s a bit to show he is hands-on, that he knows what ambience is better than anyone else here.”

Hemmes lives like a monk for 300 days a year, but when he lets his hair down, it can spiral.

In 2010, when Pierre Fajloun, the bar manager of Ivy’s Level 6, died in a motorcycle accident at the age of 26, Merivale organised a wake for his family in the Ivy penthouse. “Then the next thing you know, it’s 7am and Justin is there making margaritas,” said one former staff member.

“If our client did mourn as alleged, so what?” Hemmes’ lawyers said.

It’s alleged the wake got so out of control that the staff member was worried it would breach the Ivy’s licence. They called the police to try to get it shut down. The police never arrived.

Hemmes had “a schoolboy kind of love” for young women, the staff member said, that often extended to the people he hired.

Staff would be asked to go back to Hemmes’ harbourside mansion when Level 6 closed. “The girls would be like, ‘Do we have to go?’ and the security guard would be like, ‘Yeah, you have to go’,” the former staff member said.

“He doesn’t want anybody to go home. He doesn’t want the party to finish. But you can’t tell him what to do. You can’t say no to him.”

The power dynamics were complicated in a company that was in the business of partying, and had a leader who was both relatively young, charismatic and insanely rich.

Hemmes, who runs the company with his sister, Bettina, reports only to himself.

“It’s very hard to explain the aura that is around a person who is inherently very charismatic, and has always been, to me, personally, unfailingly nice,” one staff member said. “You are all-powerful. People are terrified of you and also look up to you.”

Former associates say that while Hemmes was brash with women, some would fawn over him because of his status and charm. “And it’s hard to separate in this environment, what is appropriate, what is not appropriate,” one said. “People would just melt.”

Managers would send messages updating one another on Hemmes’ whereabouts. “Justin had baby,” one manager wrote. “2 days before he was wasted at L6 surrounded by floozeys.”

Hemmes’ lawyers described the claims as “uncorroborated scuttlebutt”.

In 2009, a woman filed a police report after Hemmes allegedly pushed her in the chest at his club Hemmesphere. The police report has never previously been revealed.

Hemmes allegedly forcibly grabbed the arm of the woman on the dance floor and then wrestled her partner to the ground after putting him in a headlock. The woman and her partner were asked to leave. When the woman went to collect her bag, she called Hemmes “a pig”.

“Then he shoved me with enough force that I would have fallen to the ground if there hadn’t been a security person behind me,” she said. “We were so shocked that we went immediately to the police.”

The woman considered pressing assault charges but changed her mind after she claimed police warned her that the case would attract a lot of attention.

“The stress of it all was too much,” she said.

Hemmes’ lawyers claimed the woman had spat on Hemmes and behaved aggressively towards him with her male friend. “[CCTV] footage completely vindicated our client, and showed that the allegations were plainly false,” they said. “Because of that, it did not go any further.”

The woman denied Merivale’s allegations. “This is absolutely untrue,” she said.

‘Do you know who the f--- I am?’

NSW Police have had a topsy-turvy relationship with the billionaire, who first came to their attention when he crashed his Scarab class 12-metre speedboat in 1998. The crash threw a dozen passengers into the ocean and sank the $400,000 boat registered in the name of “IJUSTIN”. The same year, the then-26-year-old reportedly lost his licence for driving his Ferrari under the influence.

But it was his $66 million gamble on the Ivy that really catapulted him into the crosshairs of police.

In 2010, he allegedly ordered the strip-search of an employee, Danny Luu, after he was suspected of stealing thousands of dollars from the Establishment in Sydney.

“Do you know who the f--- I am?” Hemmes allegedly demanded of his employee as he was strip-searched, according to court documents obtained by The Daily Telegraph. Luu sued Hemmes for false ­imprisonment, assault and trespassing. Hemmes later settled the case.

A year later, 19-year-old Nicholas Barsoum was punched, kicked, gagged and hauled down the stairs into Ivy’s basement by four bouncers, including trained cage fighter Emmanouil Ntaras. Barsoum was bashed after he confronted bouncers with a group of friends after being kicked out of the club.

NSW Police were “deliberately diverted” from discovering the bashed teenager, and a Merivale cleaner removed forensic evidence from the basement, according to police facts first reported by The Australian.

Ntaras was jailed for 27 months over that attack, but Merivale needed an enforcer to continue monitoring the organised crime figures that would pile into its venues.

They turned to Chris Bakis, a boxer respected by Hemmes and the bikies and drug dealers who would turn up at the Ivy. That included Mostafa Baluch, who was caught hiding in a truck in 2021 after cutting off his ankle bracelet while attempting to flee Australia over a 900-kilogram cocaine bust.

Hemmes and Bakis became so close that Bakis was put in charge of Hemmes’ personal security, including for his own office. Perched high above Merivale’s sprawling Ivy compound on George Street, with a table worth hundreds of thousands of dollars surrounded by Eames chairs, it was where the most intimate of Hemmes’ parties were held.

Bakis, who trained Australian boxer George Kambosos Jr, died in 2023. Merivale’s lawyers said Bakis was an operations manager at Coogee Pavilion.

“The more ruthless the crew, the better,” said one former staff member. “They served as muscle at the Ivy, intervening in situations beyond the regular security guards’ capabilities, particularly when dealing with suspected gang members and affiliates. They were Chris’ ‘boys’ roaming around inside the venue while Chris was stationed at the entrance of Ivy.”

Bakis made police uneasy. One assault charge was withdrawn by consent after Bakis died in 2023.

“Lovely guy, though quite scary,” said another former staff member. “He was an affiliate, but wasn’t a gang member himself. A very valuable person for the company.”

Bakis struck fear into both patrons and staff, making it clear that he was between Hemmes and everybody else.

“If a bikie turned up at the door, then the presence of Chris there, he commanded enough respect that he could say no,” a former staff member said. “A lot of bouncers would be afraid to because their lives would be threatened.”

But there was a problem: Bakis had no licence to be a security guard. NSW Police questioned why he was running security operations for Australia’s largest hospitality company.

In a meeting with Merivale, NSW Police quickly backed down when Merivale told them that they would be calling the police to handle the situation every time a group of bikies turned up.

While Bakis became the point man for criminals, Hemmes needed a political operator to smooth over relations with the state government after NSW Police began naming and shaming the state’s most violent venues. The Ivy was consistently at the top of the list. On a busy Saturday night, the Ivy could have more than 100 police walk through the site. “It was full-on,” a former staff member said. “It was unreasonable.”

The then-NSW police commissioner Andrew Scipione launched a crackdown on Sydney’s largest hospitality company as the state government introduced lockout laws following the fatal alcohol-fuelled bashings of teenagers Thomas Kelly and Daniel Christie in 2012 and 2013.

Hemmes turned to Photios, the former Liberal MP turned Merivale VIP and lobbyist, to convince the Liberal government and eventually police that, because of its size, the scrutiny on Merivale was unjustified, cementing a relationship that has continued to pay political dividends.

‘They create their own rules’

Ministerial diaries show the former state Liberal government had 20 meetings with Merivale between 2019 and 2023, involving the premier, police minister, transport minister, and treasurer. NSW Labor Premier Chris Minns has had two meetings with Merivale since being elected in 2023.

In 2021, Merivale secured one of the biggest government catering contracts in the state: a six-year multimillion-dollar deal under a competitive tender by the Liberal government to provide food and drinks at two of Sydney’s largest stadiums, the SCG and Allianz.

“The quality and high standards of Merivale’s food and catering services are unmatched,” Merivale’s lawyers said in a statement. “This is an incontrovertible, publicly acknowledged fact.”

The family company, Hemmes Trading Pty Ltd, run by Hemmes, his sister, Bettina, and their mother, Merivale, donated $300,000 to the federal Liberal Party that year. Hemmes and Bettina have a net worth of $1.56 billion.

The contract was awarded while Merivale was in the midst of a multimillion-dollar scandal involving allegations it had systematically underpaid some of its lowest-paid employees.

In November 2024, Merivale agreed to settle the $19.5 million underpayment class action without admitting fault. “Merivale defended the claims in the litigation, at all times vigorously denying that any underpayment occurred,” the company said.

But new documents show Merivale, which has more than 5000 employees, is still forcing some staff to work more than full-time hours.

Internal emails reveal that in the middle of the underpayment negotiations, Merivale executives were allegedly forcing full-time staff to work 45 hours per week.

The maximum weekly hours for a full-time employee are 38 hours per week, according to the Fair Work Ombudsman and Merivale’s contracts with its employees. It is common for staff in many industries to work more than 38 hours voluntarily, but they cannot be forced to do so.

Merivale’s policies are that “overtime applies after 46 hours worked in one week”, meaning the company is effectively forcing staff to work a free day of work per week under a company-wide policy initiated from at least 1 July 2024.

“It seems like the message is not getting through,” an executive wrote to staff in September 2024. “All full-timers are required to work 45 hours. Snr management are pulling lists of staff members that are not hitting these hours.”

Hemmes’ top lieutenant, Merivale’s group general manager Frank Roberts, and one of its executive chefs reiterated the warning in October.

“All full-timers must work to a minimum 45 hrs per week, again [sic] again no exceptions,” they said.

On Monday, eight migrant chefs from Mexico alleged they were overworked, underpaid and racially discriminated against while working up to 60 hours a week for the hospitality group, which owns property worth an estimated $3 billion.

Merivale denied these claims, stating its “employees receive pay that meets or exceeds the relevant award entitlements”.

Fair Work is investigating the company.

NSW Legislative Council member Dr Sarah Kaine, the state government’s chair of committees, said the wage underpayment scandal, ongoing claims of exploitation of employees, allegations of sexual harassment and Merivale’s political and criminal links were “deeply, deeply concerning”.

“We don’t want a situation where any worker in NSW faces those kinds of conditions, but we particularly don’t want that with our young workforce. We don’t want that to shape how they experience what’s acceptable at work, or indeed for them to bear scars of that into the future,” the Labor MP said.

“I think Sydneysiders, Melburnians, anyone would be really distressed to think that going into what is branded as a high-end hospitality experience, that that might be off the back of workers who are being mistreated.”

Kaine accused the former Liberal government of failing to do its due diligence on Merivale when it was awarded the multimillion-dollar state government contract.

“I think the pub test, that one might not pass,” she said.

Party boy millionaire to political billionaire

The wage underpayment scandal, claims of sexual harassment, exploitation of female employees and Merivale’s links to VIPs with serious drug and tax fraud convictions have not dented Hemmes’ reputation among the Liberal political elite.

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In Canberra, Hemmes was ringside for three of then-treasurer Josh Frydenberg’s budgets between 2019 and 2022, flying in on his private plane to take his seat in the parliamentary gallery alongside his “rat pack” of Seven boss Ryan Stokes and Aussie Home Loans boss James Symond as Frydenberg handed down more than $88 billion in JobKeeper payments. Frydenberg, Symond and Stokes are not accused of any wrongdoing.

On a podcast hosted by Liberal senator Andrew Bragg, Hemmes said the JobKeeper payment was “one of the most fantastic incentives the government could have done” after it kept thousands of workers on Merivale’s books during the pandemic. Bragg described his podcast with Hemmes as a “very exciting day”.

Hemmes “sponsored” Bragg’s Christmas party at the Ivy in 2023, according to the senator’s declaration of interest. In May, Bragg was appointed to Liberal leader Sussan Ley’s cabinet as the opposition minister for housing, productivity and deregulation. Bragg was contacted for comment.

In March, five months after this masthead revealed claims of staff being sexually harrassed and exploited, and four months after Merivale agreed to settle the wage underpayment scandal, Hemmes hosted former Liberal leader Peter Dutton at the Hermitage after the then-opposition leader jetted in from flood-ravaged Queensland for the night.

The Victorian gothic mansion in Vaucluse is the same venue where Hemmes hosted the Sydney Children’s Hospitals Foundation’s Silver Party for 300 guests in May.

Dutton’s soiree followed a $13,000-a-head private dinner for Scott Morrison in 2019 and a $10,000-per-ticket fundraiser with Malcolm Turnbull in 2016.

It is also the same $100 million mansion where Level 6 staff were allegedly asked to come back to continue Hemmes’ private parties after a night of serving VIPs with political and criminal links.

Staff say they have a complicated relationship with the 52-year-old. Hemmes is respected for pioneering Sydney nightlife, but he has made his fortune through a company that has repeatedly allegedly exploited their labour.

‘They’ll murder it down there’

Hemmes now cuts an increasingly private and anxious figure. Senior staff and even junior chefs have been forced to sign non-disclosure agreements as a condition of receiving payouts.

The impact on his VIP business has been significant. Sydney’s corporate high-flyers now head to rival venues that can offer a more discreet service after the revelations in this masthead in October.

Merivale’s venues have also changed, perhaps none more so than the Ivy. The Ivy Pool Bar is now Jimmy’s rooftop, named after the more family-friendly Jimmy’s Falafel chain. Hemmes has shifted his businesses away from after midnight to the daytime crowd. His appetite for property, including a $55 million redevelopment of a car park in Melbourne, shows no signs of slowing down.

“They’ll murder it down there,” said one former staff member. “They’ll build those two sites and take over the CBD.”

But regulators in NSW are now paying attention. SafeWork NSW has been investigating both Merivale and Sydney’s other major hospitality player, Swillhouse, following earlier claims of sexual assault and exploitation in both of their venues. Merivale resigned from the board of the Australian Restaurant and Cafe Association in October after Hemmes told staff he was “devastated by the claims”.

Kaine said “questions need to be answered” as the state government considers changes to its $40 billion-a-year procurement budget, which could see contracts shortened and awarded only to businesses that provide good outcomes for their employees.

“It’s not the 1950s. Get with the program. I don’t care how long it’s been going on; it’s unacceptable,” she said. “We should make sure that we do everything we can to keep workers safe, particularly young women workers who are vulnerable to exploitation in these circumstances.”

But there is a bigger threat looming. Jacqueline Munro, the NSW Liberal shadow assistant minister for the 24-hour economy, asked the NSW deputy secretary of hospitality and racing, Tarek Barakat, in September if Merivale and Swillhouse were putting their licences at risk.

“If allegations are proven,” Barakat responded, “the authority may determine, based on that advice, that that individual is not a fit and proper person to be associated with a liquor licence in NSW, and they can ban them for a period of time or for life from operating in the industry.”

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