Ace Breaking News – Update – The ABC has also found Australia’s industrial watchdog has received at least 30 requests for help from Genius workers.
Administrators have taken control of the majority of childcare centres run by teetering empire Genius.
Nicholas Charlwood, Alan Walker, and Glenn Livingstone of WLP Restructuring took control of 12 centres on Wednesday, bringing the total they control to 25.
The ABC can also reveal that dozens of workers at Genius have lodged formal complaints about wage underpayment since 2016.
Documents obtained under Freedom of Information (FOI) laws show Australia’s industrial watchdog has received at least 30 requests for help from workers at Genius, which is run by Melbourne businessman Darren Misquitta.
The Fair Work Ombudsman (FWO) is investigating the group, a spokesperson told the ABC, as more employees face uncertainty in the wake of the collapses.
Genius’s financial woes come as the childcare industry is in the spotlight following a Four Corners investigation on Monday that raised concerns about child safety and revealed the sector is plagued by poor regulation and high staff turnover.
Until recently, Genius was a rapidly-expanding childcare empire with at least 28 centres across the country and another 17 in development.
But yesterday WLP’s partners were appointed administrators of subsidiary Abacus 49, which runs 12 centres in Queensland, New South Wales, the ACT, Victoria and Western Australia.
The administrators said they will continue to run the centres as usual while “urgently assessing the financial affairs of Abacus 49”.
Finexia, a Gold Coast-based finance group that runs childcare funds, appointed the same administrators last week to take control of another Genius subsidiary, Vertical 4.
The administrators are continuing to run 11 centres owned by Vertical 4.
Shutdowns across the country
The new collapses add to the sudden shut down of centres in Adelaide, Canberra and Sydney which are in various states of collapse due to staff walkouts because of unpaid wages, landlord disputes and suspensions by state regulators for repeated child health and safety breaches.
Another company in the Genius group, Horizontal 1, collapsed in December owing $9.6m.
In a report to creditors last month, liquidator Paul Vartelas said Horizontal 1, which was formerly known as Genius Education, “did not have sufficient realisable current assets available to meet its short-term liabilities at any time” since June 30, 2020.
Genius Childcare owner Darren Misquitta is accused of systematically and deliberately failing to pay superannuation to employees and paying wages late.(LinkedIn)normal
Other woes of the Genius group include a lawsuit by former employees who allege they haven’t been paid their entitlements.
Jodie Henderson told the ABC she is owed at least $36,000 in unpaid redundancy entitlements and hundreds of annual leave hours, after the centre she managed in Granville, Queensland, closed abruptly last month.
It was ousted by centre landlords, who changed the locks without staff knowledge, owing thousands of dollars in unpaid rent and weeks of pay to 19 now-redundant educators.
“I’ve got educators who have defaulted on loan payments, mortgage payments … I’ve got educators going to food banks and to churches to get support with feeding their families,” Ms Henderson said.
Jodie Henderson says Genius Childcare owes her thousands of dollars. (Supplied: Jodie Henderson)normal
Ms Henderson said Genius had failed to issue redundant staff with separation certificates making it difficult for them to claim urgent unemployment benefits.
“Between my team and myself, I’m going to estimate we’ve sent at least 40 to 50 emails to payroll requesting them, [asking] ‘can you tell us what’s happening?’” she said.
“And none of us have had responses.”
She said staff and children had personal and medical belongings locked inside the centre, including epipens and asthma puffers.
“This is most definitely the lowest of the low,” she said.
“It’s left a lot of people with a very bad view of working in the early childhood sector.”
Historical worker complaints come to light
Documents provided by the FWO under FOI laws show Genius workers have complained that the company hasn’t paid their full wages, given them incorrect payslips, failed to pay them for up to six weeks and failed to pay leave entitlements and superannuation.
“They are ignoring me,” one former worker, who claimed Genius hadn’t paid their final wages plus annual and long service leave, told the ombudsman in a November 2016 request for assistance.
Concerns about the group’s financial state were raised as early as November 2017, when a fired worker complained that she had not received her last two weeks pay and her entitlements.
“They dismissed two other EEs (employees) at the same time so they may be in financial difficulties,” the worker alleged in her complaint, according to a file note.
Another worker alleged she was fired from Genius after raising problems with her pay.
Complaints against Genius Childcare were filed as early as 2016. (Supplied)normal
In a 2021 complaint, a worker said that because their centre was understaffed they had to work large amounts of unpaid overtime in order to comply with minimum staff to child ratios.
“The overtime I worked was due to not having enough staff therefore in the afternoons we would have to stay back until the ratio dropped enough that we could go home,” the worker said in an email to the FWO.
In November last year, multiple staff complained that the company was paying wages late.
One Genius worker said that “no staff have been paid, pay is late from everyone”, according to a file note made by an officer at the ombudsman.
“Staff are calling management but have not heard back.”
A second worker told the FWO “the entirety of the company have experienced late pay” for the past year.
“She believes she was paid because the staff did not show up to work on Monday and told the business they had other job interviews lined up and they were paid within 20 minutes,” an FWO officer said in a file note.
Centres to continue to operate
Vertical 4, which was formerly known as Genius Learning, was also embroiled in a legal stoush with global fund management giant Blackrock over unpaid rent.
Court documents show a property fund run by Blackrock claims to be owed more than $1.4m in rent from centres in Granville (Queensland), Corinda (Queensland), Christie Downs (South Australia) and Cranbourne West (Victoria).
The administrators have plans to sell some centres and operate others in the meantime. (ABC News: Joel Wilson)normal
Mr Charlwood, Mr Livingstone and Mr Walker said that of the 11 Vertical 4 centres they are running, there were agreements in place to immediately sell five — in Mont Albert (Victoria), Beaumaris (Victoria), Reservoir (Victoria), Kenmore (Queensland) and Gowrie (ACT).
Six of the centres — in Hamilton Hill (Western Australia), Lakelands (WA), Mandurah (WA), Newcomb (Victoria), Castle Hill (NSW) and Pyrmont (NSW) — will continue to be operated by the administrators for the time being.
Two additional centres, in Eumemmerring (Victoria) and Cranbourne West (Victoria), have yet to open.
Mr Misquitta did not respond to requests for comment.
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