Six Darrell Lea workers may be denied $400,000 in redundancy entitlements after a shell company employing them was put into liquidation.
Administrators took control of Darrell Lea in 2012 to try and save it from ruin, and it was sold to Australia’s largest manufacturer of fresh chilled pet-food, the Quinn family.
The deal saw 400 workers lose their jobs, but more than 80 jobs were saved.
Part of their restructure was to move the factory from Kogarah in Sydney's south to Ingleburn on the city's outer south-western fringes. That move has been the source of a fresh employment dispute, ABC News reports.
"Most of the workforce were happy to go. A small number of the employees, this half a dozen, they're unable to travel to Ingleburn for a range of personal, family reasons," said Lucy Saunders, a legal officer with the Australian Manufacturing Workers' Union (AMWU), which is representing the six staff.
The union took the employer to the Fair Work Commission arguing that eight workers were entitled to redundancy payments, as they were not being offered suitable alternative employment by being asked to travel to Ingleburn.
The commission found that six of the eight were entitled to redundancies because of their personal circumstances, and the wording of the enterprise agreement.
The employer appealed to the full bench of Fair Work, but the original decision was upheld.
On January 28, the Fair Work Commission gave the employer 14 days to pay the six staff a total of around $400,000 in entitlements that they were owed.
The individual entitlements ranged from more than $50,000 to almost $90,000.
The problem for the workers is that their employer was a labour hire firm, a shell company, called DL Employment.
In the days after the Fair Work decision, a range of corporate actions took place.
"On the 29th of January the Quinns created a new company, it's called KQ Employment Pty Ltd, it's ultimately owned by Klark Quinn, who manages the Darrell Lea site," Saunders said.
"Then on the 30th of January Sinclair Quinn, who is the sole shareholder of DL Employment, placed the company into a voluntary winding up.
"So DL Employment is the company the orders are made against, it's the one that technically owes the money.
"The Darrell Lea business has indicated to us that they will not be paying the redundancies that the Fair Work Commission has ordered."
The ABC spoke with the liquidator of DL Employment, Jason Bettles from the Gold Coast office of insolvency firm Worrells.
He said DL Employment has no physical assets, and that its sole director, Sinclair Quinn, told him that there was no money in any of its bank accounts.
Saunders says that leaves the former employees in limbo.
"The six employees are left with a company with no assets, no hope of recovery in the normal course," she said.
The liquidator told the ABC that he is an independent party whose role is to maximise the return for creditors, including by pursuing directors personally if they have breached their duties.
In this case the main creditors are the six employees, and the union says it is considering Federal Court action if the entitlements are not forthcoming.