Alex Batarseh's cleaning business collapsed after McDonald's axed his contracts overnight, allegedly breaching a 24-month notice clause. Photo / Supplied
Alex Batarseh's cleaning business collapsed after McDonald's axed his contracts overnight, allegedly breaching a 24-month notice clause. Photo / Supplied
Alex Batarseh was one of the only cleaning contractors working for McDonald's who was "fully compliant" at the time the fast-food giant cut him off with less than 24 hours' notice, destroying his business overnight, internal emails have revealed.
The emails, released by McDonald's to the NSW Supreme Court this week in public examinations called by liquidators of Batarseh's collapsed cleaning business, show executives inside the company admitting some contractors were being paid below award rates and in one case "not being paid at all".
In a tragic irony, out of more than a dozen contract cleaning companies listed in the emails, Mr Batarseh's A2Z Property Maintenance was one of only four acknowledged to be fully compliant with McDonald's internal processes.
"It has once again come to our attention that we have a number of contract cleaners servicing our restaurants that are not set up on Rapid Induct and therefore are not approved to work inside our restaurants," an executive wrote in a May 2016 email marked "URGENT".
"We have recently been informed by the employees of one company that they are not being paid the correct award wage and in one case not being paid at all ... In reviewing the McDonald's Rapid Induct database I can only find four out of the 13 currently set up and only two companies are active with the correct insurance documents."
McDonald's terminated Batarseh's eight cleaning contracts in July 2016, allegedly telling the 29-year-old it was a risk-management decision to remove contractors from McDonald's supply chain in the wake of the 7-Eleven scandal.
Batarseh, who says he has been forced to sell his A$800,000 (NZ$856,600) Blacktown home to fund legal proceedings, claims McDonald's breached a 24-month notice termination clause in his contracts, wiping out his three-year-old business.
His company went into liquidation in July last year part-way through a legal case seeking A$1.5 million (NZ$1.6m) in damages for breach of contract. Batarseh still owes around A$700,000 (NZ$749,500) to the ATO, Commonwealth Bank, suppliers and subcontractors.
The company axed its cleaners in the wake of the 7-Eleven scandal.
A signed and witnessed copy of Batarseh's "master" contract with the Castle Hill store reads: "The client may terminate this agreement without any reason being given by the giving of twenty-four (24) months written notice or payment in accordance with the terms of this agreement in lieu of notice without prejudice to the rights of the parties that may have accrued up to the ending of the agreement."
In an email to Mr Batarseh in September 2016, the executive who sent the termination email said A2Z's "demand for payment of A$1,504,244.88 has no legal basis and is outrageous".
"In your email, you rely on termination provisions of the agreements for payment," she wrote.
"I had not seen these agreements before you sent them to me under cover of your email. There is a serious question as to whether or not the agreements were actually signed by the named McDonald's employees and even if they were, the agreements were not executed with the authority of McDonald's Australia Limited, express or apparent. For this reason alone, payments cannot be demanded.
"Furthermore, and of critical importance, we have investigated this matter and it is evident to us that you were not paying your workers in accordance with your legal obligations which may well amount to criminal breaches of the law and in particular breach of Employment Laws including Fair Work Laws, Superannuation Laws and Immigration Laws.
"If that is correct, that would be a basis for the summary termination of any and all agreements which were of legal effect (which is denied)."
Liquidators Grant Thornton this week questioned seven McDonald's employees in the NSW Supreme Court about their role in the company's collapse, to determine whether to continue the case on the A2Z's behalf.
Liquidator John McInerney said "preliminary investigations indicated that termination by McDonald's of its cleaning contracts with A2Z without reasonable notice caused A2Z to fail, amongst other things".
"The liquidators will continue to pursue the McDonald's claim in so far as it is in the best interests of creditors," Mr McInerney said. "The liquidators are in discussion with litigation funders who are interested in supporting the liquidators pursuit of the McDonald's claim."
The internal emails citing Mr Batarseh as "compliant" appear to contradict McDonald's claims that he had been terminated for noncompliance and underpayment.
During the public examinations, the executive who sent the termination email which said the decision had been taken "after considerable review" conceded that the considerable review consisted of one verbal discussion with one store manager.
But despite the seemingly favourable outcome of the public examinations — which he paid the A$55,000 (NZ$58,900) for out of his own pocket — Mr Batarseh is rapidly running out of time.
This week, the Supreme Court ordered that it be formally advised whether the liquidators would continue the case or not, with a deadline of next Friday 16 March. "We either recommence proceedings or they cancel," he said.
"My case is currently hanging in the air and I am hoping that a litigation funder will rescue me and take this case on board," he said. "It is going to be very expensive to fight this case in a court in our country — hundreds of thousands of dollars or more."
He believes McDonald's is running down the clock. "They knew even after the examinations it's not going to go anywhere because I don't have money," he said. "They're waiting for the dust to settle. It's absolutely disgusting."
McDonald's did not respond to requests for comment.
