Selected cases

Supreme Court of New South Wales · [2026] NSWSC 646

Apollo Kitchens true employer directions

A NSW Supreme Court liquidation case about whether workers formally employed by a related entity could be treated as Apollo Kitchens employees.

Supreme Court of New South Wales5 June 2026

Plain-English explainers, not legal advice. Use the linked official source for section-level detail, and get advice for your situation.

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Quick read

  • Related-entity payroll structures should be documented properly.
  • A NSW Supreme Court liquidation case about whether workers formally employed by a related entity could be treated as Apollo Kitchens employees.

Use this to check

  • A payroll or services company should have written arrangements explaining what it does for the trading entity.
  • Funding wages through a related company can become evidence in an employer-status dispute.
  • Liquidation can expose unclear employment structures because employee priority claims affect creditor recoveries.

Decision snapshot

  1. What happened

    • Apollo Kitchens was a custom joinery business that had been wound up.
    • It operated with related entities, including Brownlen, which was said to provide finance and IT and was the employer of record for 27 people.
    • The Apollo Kitchens liquidators sought directions about whether those people could be treated as Apollo Kitchens employees in the winding up.
    • Brownlen had no assets to meet employee liabilities, while Apollo Kitchens had assets but not enough to pay all creditors.

  2. What the court had to decide

    • The Court considered whether liquidators were justified in treating 27 people, nominally employed by a related entity, as employees of Apollo Kitchens for the purposes of priority claims in the winding up, including whether the related entity operated as agent for an undisclosed principal.

  3. What the court decided

    • The NSW Supreme Court gave a direction under s 90-15 that the liquidators were justified in treating the relevant people as employees of Apollo Kitchens in the winding up.
    • The Court did not make the broader declaration sought, but accepted that it was more likely than not that Brownlen had acted as agent for Apollo Kitchens as undisclosed principal.

Practical impact

Practical read

  • Related-entity payroll structures should be documented properly.
  • If one company is named as employer but another company funds wages and receives the labour, liquidators, employees and creditors may later fight about who the real employer was.

Useful next steps

  • A payroll or services company should have written arrangements explaining what it does for the trading entity.
  • Funding wages through a related company can become evidence in an employer-status dispute.
  • Liquidation can expose unclear employment structures because employee priority claims affect creditor recoveries.
  • Fairness to employees matters, but the legal employer question is still decided by objective evidence.
  • Put intercompany labour, payroll and services arrangements in writing.

Practical read

This case is about a structure many business groups use in some form: one entity trades, another entity employs staff, and money moves around the group to make payroll happen. That can be legitimate, but it needs documents and behaviour that match the intended structure.

The Court did not simply say the fairest outcome for employees decides who the employer is. It looked at objective legal principles. On the evidence, Brownlen was likely operating as agent for an undisclosed principal, Apollo Kitchens, for the relevant employees. The liquidators were given a direction that they were justified in treating those people as Apollo Kitchens employees for the winding up.

For businesses, the point is not to avoid group structures. The point is to make them real. Employment contracts, service agreements, payroll funding, workers compensation, HR policies and internal accounting should all tell the same story.

Checks to run

Key points

  • Put intercompany labour, payroll and services arrangements in writing.
  • Make employment contracts, payroll funding, HR policies and workers compensation records consistent.
  • Avoid treating the employing entity as a shell with no real role or records.
  • Review group employment structures before a sale, restructure or insolvency risk period.
  • Keep evidence showing which entity directs work, receives services and pays employment costs.

Key takeaways

  • A payroll or services company should have written arrangements explaining what it does for the trading entity.
  • Funding wages through a related company can become evidence in an employer-status dispute.
  • Liquidation can expose unclear employment structures because employee priority claims affect creditor recoveries.
  • Fairness to employees matters, but the legal employer question is still decided by objective evidence.

Related topics

Employment & WorkplaceCompanies & StartupsInsolvency & Restructuring

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