GJ Gardner building company franchise Harris Constructions collapses owing $1.8m to tradies, staff

The director has declared personal bankruptcy while staff and creditors are pointing the finger at a major master franchisor with offices across Australia.

EXCLUSIVE

Staff and suppliers have been left fuming after a franchise from a major building chain collapsed, leaving them out of pocket with little hope of recovering any money.

News.com.au can reveal that Harris Constructions Pty Ltd, a building company based in Springfield, is no longer operating.

Harris Constructions was trading under the name GJ Gardner Homes Springfield/Ripley as it was part of the GJ Gardner business, a major building franchisor which has nearly 100 building companies and offices dotted around Australia.

The eponymous director of Harris Constructions, Iain Harris, declared himself bankrupt on August 9. Andrew Aravanis is the appointed trustee overseeing the term of Mr Harris’ three-year bankruptcy.

Mr Harris owes $1.8 million to 46 creditors, including the tax office, tradies and financial institutions, according to a document the trustee sent to creditors. Between 25 to 30 homeowners were impacted from the venture going bust.

Tradesmen and staff are furious as they claim they received multiple assurances from the GJ Gardner Homes master franchisor that they wouldn’t let the Springfield business fold and that debts would be honoured.

A spokesperson for the franchisor denied this, telling news.com.au “At no time did G.J. Gardner Homes head office encourage trades or staff to continue working for the franchise or take on its responsibilities”.

Iain Harris has declared personal bankruptcy over the debacle.

Tom* had held various roles at numerous GJ franchises for nearly a decade and had been at the Springfield branch for three years.

He discovered he was unemployed because his work email was shut down.

“We turned up one day and our emails aren’t working, without even notifying us,” Tom told news.com.au.

Making matters more complicated is the fact that because Harris Constructions has not gone into liquidation, staff were never officially notified of their termination, and nor will they be covered under a last resort government scheme.

“There is nothing we received in writing saying the job is sort of stopped,” he added.

All up, he is owed $25,000 from unpaid wages, including his final pay run.

Tom has lodged a claim with the Fair Work Ombudsman to recover his lost wages.

“I’ve been associated with GJ Gardner for the past eight years, with different franchises. It’s very disappointing,” Tom lamented.

“I have a little daughter, I’m 40. It took a good few months (to find a job). I was in a very bad situation, I’m still coming out of it.”

A GJ Gardner spokesperson confirmed that they had blocked staff out of the database, which was how Tom discovered he was unemployed.

“As the reality of Mr Harris’ financial situation became clear, we removed access to our business systems, including email, as one of a number of mechanisms to prevent further debt being incurred from continuing operation,” they said.

“Ultimately, we terminated his franchise agreement.”

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A display home posted to GJ Gardner’s social media.

The company’s sole director, Mr Harris, was also disappointed to learn that his staff had not been retained within the franchise.

He told news.com.au that he had hoped GJ would have “made their best endeavours to redeploy staff” but instead “they basically said ‘too bad too sad’.”

Midway through last year, Mr Harris said his building licence was suspended as financial requirements could not be met.

Tradies were convinced the business was on the verge of collapse and suspended work.

But then a company called Nexteraenergy Franchising Pty Ltd, part of the GJ Gardner Homes franchisor, became a major shareholder in the company.

Mr Harris poured around $1 million into the business and he said the GJ Gardner head office put even more than that into it.

“In May, they said we’re not going to support the business. I was cut out of everything at that point, they said they would set up a separate entity and take over the customers’ builds, and pay all the subcontractors,” he said.

“I’m absolutely devastated with the final outcome.

“I tried my very best to keep my business afloat, but ultimately I wasn’t able to keep it open. I just want everybody to be aware that I tried my very hardest.”

He didn’t have the funds to appoint a liquidator so the company is still registered on ASIC, but is a “shell company” only as it is non-operational.

A GJ Gardner spokesperson said “We are aware that some trades were told by Mr Harris that head office would take responsibility for payment but this was never the case and is completely false”.

“The Springfield/Ripley Franchise was an independent business operated by Mr Iain Harris,” they added.

GJ Gardner Homes is a major building franchise in Australia

Jordan Purvis, who runs his own airconditioning company, is owed $68,000 from the firm’s demise and said he was blindsided by its collapse.

“Our faith was in the fact that they’re backed by this major franchise,” he told news.com.au. “I thought that was political suicide, if you’re going to pull the rug out on their own company (like that).”

He said he let his debt with Mr Harris’ construction firm grow substantially bigger than he otherwise would have because of assurances from GJ Gardner’s head office.

“It’s awful,” he lamented, saying the loss he has incurred is “pretty devastating”.

As the owner of a small business called Alfa Air Conditioning and Electrical, with 20 other people working under him, every dollar counts.

He claims he was given promises and was further emboldened by the fact that when he checked ASIC records, he could see GJ Gardner had made a substantial investment.

“I don’t expect any of these funds will come back to us,” he added.

*Name withheld for privacy reasons

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Originally published as GJ Gardner building company franchise Harris Constructions collapses owing $1.8m to tradies, staff