Mr Setter was denied a redundancy payout after he declined two offers to relocate to Melbourne. When Mr Setter engaged lawyers, the stoush escalated into a full-blown legal dispute.
In the defence filed in the Federal Court in May, Mr Benn and Ms Wild dispute that Mr Setter was not given written notice of his employment terminating. They claim Mr Setter was “orally advised” and the restaurant’s closure was “a matter of notoriety”.
They also claim that Mr Setter must have read an article published by Good Food outlining the restaurant’s closure because he was mentioned three times in the article, and because he followed the restaurant’s Twitter account, which retweeted the article.
It’s a bizarre defence, an outlandish defence, a very disappointing defence.
Rodney Setter’s lawyer Josh Bornstein
Mr Setter’s high-profile lawyer, Maurice Blackburn’s Josh Bornstein said this defence is “unprecedented”.
“We now have a test case whether an article published in a newspaper constitutes notification of termination of employment. It’s a bizarre defence, an outlandish defence, a very disappointing defence.”
In Mr Setter’s claim for underpayment, he says was paid to work 40 hours a week, but in fact averaged 59.5 hours for most of his tenure. The defendants put the figure at 50 hours.
Mr Bornstein said the potential implications in this case are significant. “There’s an expectation in a number of industries that people can work very long hours without breaching the Fair Work Act.”
“We’re going to have a test case unlike any other payment case we’ve seen because they will argue that up to 60 hours per week is not unreasonable.”
As part of its defence against Mr Setter’s claim for unpaid overtime, Mr Benn and Ms Wild say he received tips and gratuities up to $36,000 per annum on top of his gross annual salary of $90,480.
Mr Bornstein described that defence as “nonsense on stilts”.
“A tip does not satisfy an employer’s obligation to pay proper award wages – that’s unchartered territory,” he said. “It does sound like an attempt to introduce a US workplace culture in the hospitality industry in Australia, which is most regrettable.”
This latest dispute comes after the Sun-Herald and Sunday Age have uncovered numerous underpayment scandals in the hospitality sector, including at Neil Perry’s Rockpool Dining Group, Bistro Guillaume and Heston Blumenthal’s Melbourne restaurant.
The legal stoush is a sad ending to a long relationship between Mr Benn, Ms Wild and Mr Setter. A month before Sepia’s closure, Ms Wild paid tribute to Mr Setter as a key plank in the restaurant’s success.
“[H]e has saved my arse on so many occasions. He’s really loyal, intelligent guy. It’s people like that, and you look back and just think, how were we so lucky to get him?” Ms Wild said.
Mr Bornstein says Mr Setter was “shattered” and hasn’t worked since he lost his job.
“He’s bitterly disappointed about their treatment of him after his employment was terminated.”
After filing his claim in April, Mr Setter was paid his redundancy entitlement in May, but major disputes still remain. The case goes to mediation on Monday, and if that fails, the Federal Court hearing begins in Melbourne on July 24.
Mr Benn and Ms Wild, through their lawyer, declined to comment.
Josh Dye is a news reporter with The Sydney Morning Herald.