'It just proved how many flaws there are' Lovanitasign Veeraragoo was awarded $8000 in compensation from the company and $20,000 from The Local Shack's general manager at the time after the Federal Court found she was unfairly sacked while on a 457 visa in 2017. She said The Local Shack management were obstructive and avoided going to court in relation to her unfair dismissal claim, which slowed down the process. "We had a couple of hearings where they wouldn't answer their phone because they provided the wrong phone number," she said. "There was a lot of stress. It was a traumatic period for me.

Loading "Being on a 457 visa, I wasn't allowed to take any jobs unless I was sponsored by them so it took me a few months to find a job that was compatible with my visa. I didn't have any income, and I had my baby to support and myself. I wasn't eligible for any Centrelink or anything." A year on from her court win Ms Veeraragoo has not seen any of the money she is owed. Ms Veeraragoo's lawyer David Scaife said he had tried many avenues to make The Local Shack pay what they owe their former employee, but he too had been unsuccessful. Jessica McCormack was another former employee who successfully took The Local Shack to the Fair Work Commission after she was let go from her job in December 2017.

She was awarded $8167 by the Commission. Soon after Ms McCormack was awarded her payout, she got a letter stating the company had gone into administration and she was unlikely to see any of the money owed. "I honestly have pushed and pushed. I have contacted the administration company, and they've just told me there's not enough funds there," she said. "I can't be bothered anymore, it's taken up too much of my time. It just proves how many flaws there are in our systems in Australia, to be honest. I don't think [The Local Shack] realises how many lives they're really affecting, it's just disgusting. I'm gobsmacked." The Local Shack owed the City of Stirling more than $31,000 for Food Act violations in 2016 at the Scarborough store but the debt was written off by the council when the parent company was wound up.

The spider web The Local Shack has continued operating through a web of companies with connections to the same Perth family. The restaurant chain has operated under three companies – Wright Hospitality Pty Ltd, Goldbreak Holdings Pty Ltd and The Local Shack Holdings Australasia Pty Ltd – since 2013. The unfair dismissals occurred under Goldbreak Holdings while the City of Stirling fine was issued to Wright Hospitality. Hospitality union United Voice WA has since flagged it is looking into the structure of The Local Shack business after ex-employees raised concerns about how it was run at a meeting earlier this month.

United Voice WA cannot itself lay charges but can provide information to regulatory or prosecuting authorities who could take action. "The information we have received in the meeting gives us concerns about the structure of the business," assistant secretary Karma Lord said. "United Voice will investigate further so that the workers know what their legal and industrial options are in seeking justice." Mr Scaife also said the situation was "farcical", and called for regulators to crack down on the complex web of companies operating The Local Shack.

"When businesses like the various companies that operate The Local Shack and its management behave like this, it exploits workers and undercuts law-abiding businesses," he said. WAtoday received separate but similar responses from the three companies responding to the former employees and union concerns. A Local Shack Australasia Holdings spokeswoman said there was a legitimate reason for the complex web of parent companies that owned The Local Shack. "It is not unusual to separate management and operation activities among different companies," she said. "For example, the franchising business of [The] Local Shack - which has yet to be realised and shows much potential - is a vastly different operation to that of employing staff which in turn is also different to the activity of negotiating premises rental with landlords, as is creating the product sold by each of the outlets.

"This is normal practice amongst most large food and beverage, restaurant, cafe chains." Both the Wright Hospitality and Goldbreak Holdings spokesmen also stressed there was a strong difference between the businesses, and said there were separate reasons for each of their failures. Former Local Shack employee Emilee Sugars, 24, spoke to WAtoday about her time with the business as a venue manager, calling it one of the worst periods of her life. Credit:Marta Pascual Juanola A Wright Hospitality representative said a bookkeeper had embezzled more than $300,000 from the business. "The bookkeeper in question was indicating on bank statements that money was being transferred to ATO PAYG, super and [business activity statement], when in fact it was going to her private bank account," he said.

Loading The representative provided no further details regarding the alleged embezzling, and it is not known whether that matter is being investigated by authorities or whether the company is seeking to recover the money. A Goldbreak Holdings representative blamed a dispute with a landlord for the business' failure. "Goldbreak Holdings believes the misleading and deceptive information provided by the landlord caused The Local Shack to be commercially unviable at the shopping centre," he said. He said Goldbreak Holdings was "enticed to lease by a landlord providing turnover trading information", and she was later found guilty of misleading and deceptive conduct.

However, a copy of the judgment stated Goldbreak Holdings were unsuccessful in trying to prosecute the shopping centre over the failed business. A State Administrative Tribunal member noted Goldbreak's director often made decisions after discussions with the former director of Wright Hospitality. Fines likely to remain unpaid Responding to the businesses' failure to pay debts owed to ex-employees and the City of Stirling, The Local Shack Australasia Holdings Pty Ltd said it was not a party to the proceedings. Goldbreak Holdings, the company against which the unfair dismissal claims were made, did not respond directly to the question.

Instead, a representative said that when it went under, all employees voted in favour of entering a deed of company arrangement. This allowed The Local Shack to continue trading as normal and debts to be paid at a reduced rate. A Wright Hospitality representative denied the company had ever been fined by the City of Stirling. A spokesman said before The Local Shack had ever been realised, the business in Scarborough was known as "The Local Shack 2". "The Local Shack 2 has no connection to The Local Shack," he said. He said to correlate the two would equate to "misleading and deceptive conduct", and would only ruin the reputation of the new The Local Shack.