Heston restaurant owners blame ‘partner’ Crown for underpayment scandal


“As the financial effect became clearer, including the discovery that there were also significant overpayments of superannuation to some staff, Tipsy Cake tried to discuss constructively with Crown, to work together to find a solution which would be in the best interests of staff.

“Regrettably Crown has not engaged with us or agreed to any proposal which was tabled in order to remediate the employees,” the statement says.

“This is a complex issue and one that has affected a large number of industries and companies across Australia.”

Tipsy Cake, which based in the Caribbean tax haven of Nevis, said it did not have the resources to pay its employees what it owes them. Blumenthal is no longer a shareholder in the business and restaurants that bear his name, though the company itself says he remains linked as chef patron and is “integral” to their operation. He is paid by another part of the empire, the UK-based Fat Duck Group.

The company’s insistence that Crown was a “partner” in the business rather than just a landlord reflects comments made in a creditors report by BRI Ferrier, which revealed Crown had offered a range of financial and administrative support to Dinner by Heston. BRI Ferrier said the arrangement was “best described as a joint venture”.

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A Crown spokeswoman disputed the claims, saying Tipsy Cake, trading as Dinner by Heston, was “a tenant of Crown. It was responsible for its own operations and employed its own staff”.

“Tipsy Cake has asked the court to appoint a liquidator, on the basis that it is insolvent. In these circumstances, Crown has taken steps to bring the tenancy to an end.”

Crown was charging the restaurant owner just $1 a year in rent while paying £1m pounds ($A1.97m) a year in license fees to an obscure Irish entity that is related to a sprawling global network of companies that own the Blumenthal-fronted restaurants.

The problems for Dinner by Heston emerged after a Sunday Age investigation in late 2018 showed the Melbourne eatery had been significantly – and unlawfully – under paying their staff, many of whom were working 20 to 30 hours a week unpaid.

What appears to have hastened the end of Dinner by Heston’s Australian experiment was a subsequent investigation by the Fair Work Ombudsman and demands the restaurant repay staff.

Just before Christmas the company appointed BRI Ferrier. When Crown recently said it would terminate the restaurant’s lease there was no way for it to trade on.

“Our main concern, now that the restaurant will have to cease trading, is our employees, and The Fat Duck group and Heston Blumenthal are actively involved in discussions with us to find a positive solution for them,” Tipsy Cake’s statement said.

The dispute could result in legal action with recent changes to the Corporations Act allowing landlords such as Crown to be included in any clawing back of employee entitlements, according to a legal expert.

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The new laws targeted transactions that attempted to prevent, avoid or reduce payments of employee entitlements, said Natasha McHattan, legal director at the Australian Restructuring Insolvency & Turnaround Association.

The changes were primarily designed to target illegal phoenix activity, but there is potential that they could be applied to third parties such as landlords, she said.

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