MCDONALD’S has taken Alex Batarseh to the cleaners.
The young Sydney man is locked in a David and Goliath battle with the fast-food giant over the collapse of his cleaning business, which went into liquidation last year after his only client cancelled his contracts with less than 24 hours notice.
The 29-year-old, whose mother passed away from cancer in December, has been forced to sell his Blacktown home to fund a desperate legal battle, as liquidators prepare to haul senior McDonald’s employees before the Supreme Court to answer questions about their role in his company’s collapse.
“I sold everything,” Mr Batarseh said. “My house, my car, my hobbies, my personal stuff, my fishing gear. I literally have nothing. It’s just completely destroyed me. I can’t put it into words, to know the company I built from scratch just vanished.”
Five years ago, Mr Batarseh was doing maintenance and cleaning jobs for McDonald’s when he was approached to take on an expanded role. He started his company, A2Z Property Maintenance, with McDonald’s as his sole client.
“From one store they were so happy with the service I ended up with eight,” he said. His contracts covered Sydney’s Castle Towers, Castle Hill, Gregory Hills, Camden, Narellan, Milperra, North Parramatta and Homebush.
“I was working for McDonald’s for three years. My company became super-dependent on them and I invested all my time and effort. Two years ago, McDonald’s decided to just terminate each and every contract for all external cleaners.”
One evening in early July 2016, he received an email from the fast-food chain’s newly appointed senior national director. “I am writing to confirm to you that with regret we no longer require A2Z Property Maintenance Pty Ltd cleaning services in our restaurants,” he wrote.
“After considerable review, McDonald’s Australia Limited has initiated the process of remodelling its current restaurant cleaning procedure. Where possible McDonald’s are hoping to offer more people the opportunity to become a McDonald’s employee. We thank you for your commitment and service to McDonald’s over the past few years.”
Despite the official explanation, Mr Batarseh said he was told in verbal conversations that the change was a risk-management decision to remove contractors from McDonald’s supply chain in the wake of the 7-Eleven wage theft scandal.
“They were afraid of the 457 [visa] scandal,” he said. “Two companies got busted, they were concerned about how 7-Eleven got exposed, they didn’t want McDonald’s to be exposed. I was doing the right thing, but they terminated pretty much with 12 hours’ notice, so a whole company had to wind down.”
Mr Batarseh’s three full-time employees and 18 subcontractors lost their jobs overnight. He alleges McDonald’s knew it was breaching his contract, but also knew he wouldn’t have the money to take them on in court.
“It’s David and Goliath. You cannot go against McDonald’s because they’re too big and too powerful,” he said. “They hired Baker McKenzie, one of the biggest law firms in the world. I was helpless. Even if it gets to court, you can’t get a judgment without spending $300,000-400,000 [in legal fees]. The system was built for the powerful.
“They knew that. I was like, ‘It’s the principle, you cannot do this, it’s not fair.’ They knew my company was super-dependent on them, that’s why I had a 24-month clause. They didn’t even give me a month, a week. They called and said, ‘Don’t send the guys tomorrow morning.’”
That didn’t stop him trying. In April 2017, Mr Batarseh commenced legal proceedings against McDonald’s seeking $1.5 million in damages for breaches of contract. That case stalled when the money ran out, and A2Z was placed into liquidation in July.
“It was really, really hard, because at that time my mum had cancer, I had no time to even think,” he said. “You have to write letters, talk to people all the time about the situation, it was emotionally, physically, full-time stress, [all while] taking my mum for appointments.”
Liquidators Grant Thornton will now determine whether to take up the legal case on the company’s behalf by grilling senior McDonald’s employees under oath in the NSW Supreme Court this week, using powers under section 596B of the Corporations Act.
Information gathered during the public examinations will help the liquidators determine whether the case has merit, and could be used in the lawsuit should they decide to continue the fight to recover money for the company’s creditors.
For Mr Batarseh, proceeds from the sale of his $800,000 home won’t go far after the $500,000 mortgage is paid out.
“The actual claim was $1.5 million for the termination clause, but now the debt is nearly $700,000,” he said. “There is a $200,000 overdraft to Commonwealth Bank, $180,000 for the ATO, for suppliers and stuff like that around $40,000, there’s another credit card of $20,000, the subcontractor needs $100,000, the liquidators want $80,000, [law firm] Piper Alderman $55,000, the previous lawyer is $67,000.”
Mr Batarseh said he hoped McDonald’s would choose to settle. If not, he would need to find a litigation funder. He said the goal of the public examinations was “to show how important this case is, to show their misconduct, to show the world what they did was wrong, that there were contracts in place”.
He said McDonald’s had been “bluffing” in the pre-liquidation court case. “They were saying there was no contract, they said I wasn’t adhering to safe work practices, but there was no evidence of that,” he said.
According to the liquidators’ report filed with the corporate regulator in October, McDonald’s has previously rejected the A2Z’s claims and “have advised that they will vigorously defend the proceedings”.
A McDonald’s spokeswoman said, “We will fully co-operate with liquidators, but while this public examination is before the court it’s not appropriate for us to provide further comment.”
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